The voice of responsible investors is heard loud and clear

As dynamic as ever, the members of the Interfaith Center on Corporate Responsibility (ICCR) successfully pursued several shareholder initiatives in 2023, to encourage companies to improve their social and environmental risk management, as well as their governance practices. Of the 454 proposals they submitted, 122 (27%) were withdrawn thanks to satisfactory agreements with the companies concerned. In addition, 7 of the proposals voted on received a majority of votes.

Reflecting the main concerns of responsible investors, this year's proposals focus on the climate crisis (123), diversity, equity and inclusion (DEI) and racial justice (99), human and workers' rights (84), and corporate governance (53). It's worth noting in passing that the majority of proposals withdrawn following a fruitful dialogue focused on DEI (40) and climate change (37). In fact, 63% of the proposals asking companies to provide more information on DEI were withdrawn, as were 51% of those concerning climate transition plans and greenhouse gas emission reduction targets.

Thanks to the agreements negotiated by ICCR members, many companies will resort to better environmental, social and corporate governance (ESG) practices or increase their transparency in this area, which can only be beneficial for all stakeholders, including investors. More effective management of ESG risks and issues should also contribute to enhancing the long-term value of companies.

For example, ICCR members persuaded Keurig and Colgate to step up their efforts to tackle plastic pollution, and reached agreements with ADM, Ameren, Chewy, Morgan Stanley, Norfolk Southern, Nucor, UPS and XPO on their response to the climate crisis.

Other companies have agreed to modify certain governance practices. For example, Lantheus Holdings will implement majority voting in uncontested director elections, while Axon, Discover, Illumina, NVIDIA, Redfin, Repligen, Salesforce, Tractor Supply and Upwork have made strong commitments to improve the fairness of contested board elections.

On the social front, Albertson's, Bank of New York Mellon, Baxter, Biogen, Charter Communications, eBay, Electronic Arts, Estee Lauder, Ford, Honeywell, Philip Morris, Simon Property Group, Southern Company, Target, Texas Instruments, Thermo Fisher Scientific, T-Mobile USA, Victoria's Secret and Walt Disney have agreed to disclose additional information and quantitative data on diversity and inclusion.

For their part, Netflix and NextEra will disclose their median gender pay gaps for their U.S. and global workforces, while Amalgamated Financial, BlackRock, Thermo Fisher Scientific and Visa have committed to reporting their gross and adjusted gender and race gaps, which is best practice for pay equity reporting. In March 2023, Arjuna Capital reported that over forty companies had adopted this best practice.

Among other successes for ICCR members, Maple Leaf Foods agreed to SHARE's request for an independent human rights impact assessment that would define and measure the actual and potential impact of the company's activities and supply chain in Canada on the human rights of migrant workers. It is important to note that SHARE submitted a similar proposal to Metro Inc. in January 2023, which received a high approval rate of 28.7%. Let's hope that the fact that a significant proportion of its shareholder base supported the proposal will convince Metro to follow in Maple Leaf's footsteps and exercise greater due diligence when it comes to human rights, particularly with regard to migrant workers, who play a major role in the Canadian food system.

Sources: Interfaith Center on Corporate Responsibility, Catalyzing corporate change: 2023 Proxy Season Recap, September, 2023, ref. October 16, 2023, Our Impact - Interfaith Center on Corporate Responsibility (iccr.org) ; Arjuna Capital, Ahead of Equal Pay Day and release of 6th annual Racial and Gender Pay Scorecard, investors report more companies committing to pay gap transparency, March 10, 2023, ref. October 16, 2023, Press Release: Arjuna Capital: AHEAD OF EQUAL PAY DAY AND RELEASE OF 6th ANNUAL RACIAL AND GENDER PAY SCORECARD, INVESTORS REPORT MORE COMPANIES COMMITTING TO PAY GAP TRANSPARENCY — Arjuna Capital - Enlightened Investing (arjuna-capital.com)