Between The Lines Issue #3

Proxy Ballot Preview

The U.S. Securities and Exchange Commission (SEC), under Chair Gary Gensler, is taking on one of the largest regulatory agendas in recent memory, and Environmental, Social, and Governance (ESG) concerns are expected to dominate the 2022 Proxy Season.

Topics expected to be taken up:

  • Climate change rules intended to increase disclosures around climate-related risks and opportunities
  • Rules that would increase transparency into the diversity of board members and nominees
  • Bring focus on how companies manage their workforce

Company worth watching

The Walt Disney Co. The Walt Disney Company has six shareholder proposals, a few of which are: requested reports on pay equity and pay gaps; transparency around lobbying; a deeper look into the company’s impact on human rights; and a workforce non-discrimination audit.

Vote worth watching

Apple has proposals from shareholders on a number of ESG concerns, including transparency reports that would include government requested app removals; the possibility of reincorporating to become a social purpose corporation. One particularly interesting proposal put out by undisclosed shareholders asks for a report on Apple’s Concealment Clause.

  • The Concealment Clause is any employment or post-employment agreement, that Apple can ask employees or contractors to sign which would limit their ability to discuss unlawful acts in the workplace, including harassment and discrimination.
  • Apple’s proxy statement. Stay tuned for the March 4th meeting!

An early-season result

A voting item on Costco’s ballot, put forth by Green Century Capital Management (a socially responsible investing fund) received 69.95% support asking the superstore to adopt GHG Emissions Reduction Targets and publicly disclose these targets to investors at least 180 days prior to the next annual meeting.

Costco’s absolute Scope 1 and 2 emissions have increased in each reported year since 2016

The bottom line – Get involved

It’s not just advocacy organizations submitting proposals. Shareholders are now coming around to this idea. They want to ensure the companies they’re invested in reflect their values. We now see unions, state comptrollers, retirement fund managers, foundations, and even religious organizations using the power of their shares to tell corporations what’s important to them.