Investing in Change

Perhaps Climate Change is the Next Thing Chevron Will Drill Into
Graphic by FI Creative for Green America

Shareholder activism is a powerful tool that gives shareholders the opportunity to initiate change within companies.

By dialoguing with companies and voting on proxy ballots, shareholders can influence corporate decisions. A “shareholder” is a person or institution that owns company stock, that is, a portion of a company’s capital. Any shareholder who owns at least $2,000 worth of stock for at least a year can file a resolution. Often, shareholders come together in coalition to file shareholder resolutions. 

In 2018, the UN Intergovernmental Panel on Climate Change released a report that found that the global community has approximately 12 years to prevent irreversible climate-caused damages to the planet. And today, as that 2030 deadline approaches and the Trump Administration continues to roll back protections for both people and planet, the role of economic action in an age of government inaction and corporate irresponsibility is ever more important.

Shareholders as Changemakers 

The Trump administration has ushered in another era of rampant deregulation in United States history. After withdrawing the US from the Paris Climate Agreement in 2017, the administration rolled out several environmental policies , including repealing the Clean Power Plan, and reversing multiple Obama-era rules concerning how companies report emissions, how refineries monitor pollution in their surrounding communities, and how much pollution new power plants can emit.

For shareholders, harnessing the power of a resolution—a 500-word formal request to corporate management—can voice investors’ values against environmentally and socially destructive policies. 

“We’ve seen a shift from just being shareholder-centric to being stakeholder-centric,” says As You Sow CEO, Andrew Behar. “We want companies to demonstrate their values not only to shareholders but to customers, employees, and to the planet and larger society. All of these groups have a stake in a corporation’s success, so companies have an obligation to them all.”

It’s important to understand that shareholder resolutions do not need to receive majority support in order to be effective. In fact, it is rare for votes on social and environmental issues to receive majority support—especially since corporate management typically urges investors, in writing on the ballot, to oppose such resolutions. Resolutions receiving double-digit support, however, are enough to send a solid message to management about investor concerns.

“One thing the companies always say is that the vote lost if it got under a 50 percent vote in support but there really is no win or loss,” says As You Sow president, Danielle Fugere. “These resolutions are really discussions with upper management, and we’ve had companies take action at three percent of the vote. It just matters whether they’re sufficiently listening to you.”

2019 Victories and Trends 

Socially responsible advocacy groups and investment agencies are continuing to guide investors through the filing process and produce victories. Climate change continues to be a major issue brought forth by shareholders and more are advocating for company policies that align with the Paris Agreement. 

The nonprofit foundation As You Sow filed three resolutions at Chevron that asked the energy giant to 1) report on how it can reduce its greenhouse gas (GHG) emissions in compliance with the Paris Agreement goal of keeping global warming below 2 degrees Celsius, 2) disclose short, medium and long term GHG reduction targets, and 3) create a board committee dedicated to supervising the company’s strategy and response to climate change.

Chevron agreed to all three proposals. And in another major win for the climate, Emerson Electric agreed to a resolution filed by the Interfaith Center for Corporate Responsibility (ICCR) to establish GHG reduction targets with a 39 percent vote in support.  

As You Sow also filed resolutions at Chevron, Exxon, Phillips 66, and Dow Dupont Chemical concerning “nurdles”—tiny pellets of plastic used in that manufacturing of larger plastic products. Nurdles range from about 1mm-5mm in size but they have a large-scale impact on the environment as plastic pellets not only contain toxic chemicals themselves but also absorb other chemicals, are accidentally eaten by wildlife, and never break down. In exchange for the proposals being withdrawn, each of the companies agreed to issue reports on the amount of nurdles their facilities are releasing to the environment and to assess the effectiveness of their current policies for mitigating this kind of contamination.

Diversity continues to be a keen shareholder issue this proxy season. As You Sow filed and successfully withdrew resolutions at Caesar’s Entertainment, Eastman Kodak, New Media and Sketchers calling on board members to produce reports detailing the steps companies are taking to enhance diversity at the board level in terms of gender, race and ethnicity.

This Pride month (June 2019), the Corvel Corporation, which provides health administration and workers’ compensation, faced a resolution on sexual orientation and gender identity. The resolution, introduced by the Boston-based SRI firm Walden Asset Management, asks the company to investigate the risk of omitting “sexual orientation” and “gender identity” from the company’s Equal Employment Opportunity (EEO) statement.  

Climate Change

While climate change remains a dominant issue within the shareholder community, efforts to garner support from companies to embrace climate resolutions are countered by other forces. President Trump has voiced skepticism about the extent to which human beings cause climate change and the Securities and Exchange Commission (SEC) has issued “no-action” letters on climate resolutions, meaning the resolutions will not appear on the proxy ballots. Still, proposals concerning plans to address climate change accounted for 21 percent of those filed during this year’s proxy season and they focused on GHG management, carbon asset risks, and becoming Paris-compliant.

“On climate change, what we’re seeing is that companies are being challenged on getting serious about becoming Paris-compliant,” says Behar. “Up to now, there were a lot of questions around greenhouse gas emissions in general, but shareholders are paying more attention to Scope 3 emissions, which are indirect emissions coming from a company’s value chain and an important distinction.” 

In January 2019, the NYC Pension Funds, announced a settlement with the aerospace manufacturing company TransDigm Group, that allowed a resolution asking for TransDigm to establish time-bound, GHG management goals that had previously been blocked by the SEC. In March 2019, the resolution received 33 percent vote in favor.

As You Sow is also elevating the issue of climate change by questioning the carbon-reducing and Paris-aligning plans of five energy companies: Anadarko Petroleum, Chevron, ExxonMobil, Hess and Cooper Cos. The resolution to issue reports on how each company can reduce their carbon footprints in alignment with the Paris Agreement has been blocked by the SEC at Hess and Exxon, and has yet to go to vote at Anadarko and Cooper Cos. It earned a 33 percent vote in support from Chevron. 

Clean Energy

In 2012, Apple, Facebook, and Google made pledges to transition to 100 percent clean energy to power their data centers. Two years later, Amazon committed to a similar pledge. The former tech giants have all since made significant strides in achieving their climate goals; however, Amazon’s renewable energy promises have fallen flat.

Despite its rapid expansion, Amazon has not announced new investments in clean energy and refuses to produce an annual sustainability report, unlike its peers. Additionally, in 2017, Amazon Web Services aggressively courted the fossil fuel industry by pitching its services to accelerate the location and extraction of fossil fuels at a company event.

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Amazon employees haven’t taken CEO Jeff Bezos’ clean energy complacency lightly. In 2019, employees in the group Amazon Employees for Climate Justice, launched a public campaign demanding that the company take serious action against climate change. 

Though the company opposed the resolution, it achieved significant shareholder support at 31 percent, a strong showing for an environmental or social resolution. The resolution was also endorsed by 7,600 Amazon employees.

“I want Amazon to do more on the climate crisis because I think it is unacceptable for one of the richest companies in the world to continue to take half-actions as the consequences of its emissions put so many lives of the global poor at risk,” Rajit Iftikhar, an Amazon software engineer, said to the Seattle Times. 

In 2018, Green America joined the movement to #BoycottAmazon with our “Pass On Prime Day” campaign to inspire purchasing from local green businesses. Green America and Greenpeace are continuing to pressure Amazon to weigh human and environmental concerns in their bottom line. Green America calls on Amazon to fulfill its promise of 100 percent renewable energy by cleaning up its cloud computing services—one of the largest and dirtiest in the industry. Visit to learn more and sign the petition.

Amazon, AT&T, and Verizon are examples of how consumer advocates and shareholder advocates putting pressure on a company independently can have more impact than if just consumers or investors acted alone. 

Workplace Diversity and Gender Pay Equality

Since the beginning of the Trump presidency in 2017, the administration has received criticism for its lack of diversity in its presidential cabinet and White House staff, but shareholders are continuing to amplify the need for diversity, equity and inclusion at the companies people work for and buy from every day.

“We’re seeing a lot of activity around shareholders expressing to companies how beneficial it is to have an ethnic- and gender-diverse board,” says Behar. “It gives the companies more points of views and protects them from risks. It defines their culture and attracts the best and the brightest talent, there’s nothing but upsides to diversifying the boards.”

Access to demographic data is key to understanding the severe need for greater diversity in corporate leadership, but many companies don’t report it. In 2017, only 16 of the Fortune 500 companies shared in-depth demographic information about their employees. At those 16 companies, 72 percent of the executive staff were white men. 

Zevin Asset Management filed a resolution in 2018 at Google’s parent company, Alphabet, calling on the company to make the diversity metrics of senior staff a factor when evaluating the performance and compensation plans for the CEO. Zevin Asset management came back again this year to file a similar resolution with the support of Google employees. The resolution earned 9.7 percent of votes in support. In 2018, women accounted for 30 percent of Google’s workforce, African Americans made up 2.5 percent, and Latin Americans made up 3.6 percent, according to Google metrics. 

Trillium Asset Management  also filed resolutions at Borg Warner, Carter’s, BNY Mellon, Marathon Petroleum, and Newell Brands asking for an assessment of the company’s current senior leadership diversity and concrete plans to expand diversity in respect to gender, race and sexual orientation. At Skecher USA (the shoe brand Skechers), As You Sow and Amalgamated Bank filed a resolution asking for a formal commitment to enhancing diversity in respect to gender, race and sexual orientation at the board level, in part by including diverse candidates for its board nominee selection process. The resolution was well received with a 26 percent vote in support. This May, Skechers welcomed Katherine Blair to its board, the first woman to be appointed to the position in over 20 years. 

In terms of equity and fairness, Arjuna Capital filed resolutions asking for a report on the global median pay gap at Alphabet, Amazon, Bank of America, Facebook, JPMorgan Chase and Mastercard, and a report on the risks associated with emerging government policies addressing the gender pay gap at Adobe Systems, American Express, Bank of New York Mellon, Citigroup, Intel and Wells Fargo.

Northstar Asset Management , also filed its Give Each Share an Equal Vote at Alphabet, a resolution it has filed every year since 2015, calling on Alphabet, Facebook and the manufacturing company A.O. Smith to switch to a one-vote-per-share system. This proposal promotes shareholder equality, as in the current policy, shares owned by insider shareholders can have many votes per share while ordinary investors get one vote per share. This inequality means that votes cast by the corporate insiders will win.

Corporate Spending on Elections

Shareholders filed 93 resolutions on corporate political activity during the 2019 proxy season, which is up from 80 resolutions filed in 2018. In 2019, As You Sow alone filed 54 resolutions focused on corporate spending and influence on elections—twice that of the year before and a record number. As the 2020 presidential election gets underway, companies are paying closer attention to the risks associated with supporting candidates or taking a side on hot-button political topics. 

According to Market Watch, the Center for Political Accountability is filing resolutions at 57 companies asking them to report on their political contributions and expenditures. These resolutions also request information on the identity of contribution recipients, the contribution amount, and identity and title of the decision-maker for approving political contributions.

One of the companies that received the resolution was General Electric, which agreed to disclose contributions made to trade associations and social welfare organizations that may be used for election-related activities.

The American Federation of State, County and Municipal Employees and Walden Asset Management filed resolutions at 31 companies that privately lobby against policies they claim to support in public. The resolutions request annual reports that disclose payments made by the the company for lobbying purposes and disclosure of membership in organizations that write and endorse legislation. For example, AT&T has public goals to reduce carbon emissions but is a member of the American Legislative Exchange Council, an organization that drafts legislation that consistently opposes climate change regulation. 

Private Prisons and Detention Centers 

In March 2019, JP Morgan Chase announced that it would no longer lend to private prison operators Core Civic and GEO Group, following a landmark resolution filed by the Interfaith Center on Corporate Responsibility ICCR. Wells Fargo agreed to issue a report on the human rights risks to the banks that are related to the Trump Administration’s immigration and family separation policies, in response to a resolution filed by the SEIU Master Trust. Bank of America had agreed to the same, but at the end of June 2019, the company announced it would be exiting the detention industry completely, after bank officials toured a privately owned detention center for children outside of Miami.

As the Trump Administration continues to detain asylum-seekers and migrants in crowded facilities, and shows no sign of changing those policies, shareholders are also focusing on detainee rights and conditions. The Jesuit Conference filed a resolution with GEO Group asking for a report on how the company implements its policy on respect for all inmates and detainees, metrics for assessing human rights performance, and remedies for inadequate performance.