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ICCR Publishes 2013 Proxy Resolutions and Voting Guide

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ICCR Publishes 2013 Proxy Resolutions and Voting Guide

From Sustainablity Investment News
by Robert Kropp

The Interfaith Center on Corporate Responsibility reports that its members have filed 180 shareowner resolutions and engaged in 225 corporate dialogues this proxy season. — Last year’s Proxy Resolutions and Voting Guide from the Interfaith Center on Corporate Responsibility (ICCR) represented a significant milestone in the history of corporate engagement by sustainable investors. For the first time, ICCR members—who had, in years past, filed as many as 650 shareowner resolutions in a single proxy season—engaged in more corporate dialogues than the number of resolutions filed; at the time of the Guide’s publication, members had filed 160 resolutions and engaged in 170 dialogues. 

“The business case for sustainability has become more specific,” ICCR Executive Director Laura Berry explained last year. “It’s become more useful for companies, and they’re starting to get the point. It no longer requires a belief system, because it’s become meaningful for companies’ business practices.” 

ICCR recently published its 2013 Proxy Resolutions and Voting Guide, which indicates that the organization’s emphasis on corporate dialogue continues to evolve. Again, ICCR members report more dialogues than resolutions: 225 of the former, and 180 of the latter. “Corporate dialogues…are generally confidential and based on a mutual trust that is frequently the result of decades-long relationships and a shared commitment to sustainable operations and good performance,” the Guide states. 

Which is not to report that the more confrontational practice of submitting shareowner resolutions is going away anytime soon. The inadequate global response to climate change, unsustainable overconsumption, and persistent wealth inequality all portray a world in danger of hurtling into crisis, and corporations are complicit in many of the causes. And while many corporations have improved their environmental, social, and corporate governance (ESG) performance—thanks in large part to the efforts of ICCR and other sustainable investment organizations—the stakes must continuously be raised. Publishing a sustainability report, for instance, is a laudable first step; but it is only a first step on a long path to genuinely sustainable performance. 

And so the task of filing shareowner resolutions continues. It can be a challenging task, requiring considerable time and expense as well as the formation of coalitions to meet Securities and Exchange Commission (SEC) requirements for filing. 

The Guide states, “While some resolutions represent ongoing requests to management, often re-filed over several years with increasing shareholder support, others are a direct response to a company’s ‘irresponsibility’ on a specific issue, or other emerging events.” 

Much of the slight increase in the number of resolutions files thus far this year—ICCR points out that the resolutions included in the Guide were filed before January 10th, and that the texts of resolutions filed afterward can be found on its website—can be attributed to last year’s Presidential election, the most expensive in the nation’s history. ICCR members have filed 52 resolutions addressing corporate political spending and lobbying expenditures. “In a system where one person, one vote is the supposed rule, American corporations are granted undue influence over our legislative process by virtue of their financial weight and, in the wake of the Citizen United ruling, this balance of power has tilted even further in favor of corporations,” the Guide states. 

Resolutions addressing political spending, lobbying expenditures, and payments to trade associations were filed by ICCR members with many of the nation’s largest corporations. At the time of the Guide’s publication, very few had been withdrawn due to successful engagement. A resolution addressing lobbying expenditures by AT&T, for example, was withdrawn by its filer, the Needmor Fund; however, a resolution on the telecommunications giant’s political spending remains of this year’s proxy ballot. 

Chevron is another corporation facing separate shareowner resolutions on political spending and lobbying expenditures. The quality of the oil and gas company’s corporate governance can be further discerned by the fact that a total of nine resolutions have been filed with it this season. One resolution, filed by the Needmor Fund and Zevin Asset Management, requests that Chevron report on the rationale behind the subpoenas filed by the company’s lawyers targeting its own shareowners. The subpoenas were issued to “investors whose only ‘sin’ was challenging the company regarding its environmental damages in the Ecuadorian Amazon rainforest and the impact on investors of the $18 billion legal action against Chevron,” Daniel Stranahan, Chair of the Finance Committee of the Needmor Fund, said. 

“We believe this is an unprecedented intrusion into investor communications related to an issue that has a distinct and negative impact on shareholder value,” the resolution states. “This is seen by many investors as an unwarranted and irresponsible attack on private investor communications and if successful would establish a horrendous precedent opening the door for companies to sue investors who disagreed with them.” 

Chevron has requested that the SEC to disallow the resolution from the proxy statement. In a letter to the SEC, Timothy Smith of Walden Asset Management and Sonia Kowal of Zevin urged the Commission to deny Chevron’s request. 

“We believe strongly that investors have the right to convene meetings to share ideas and strategies, discuss corporate performance, and, ultimately, to join together to challenge a company if they believe its governance or environmental record raises significant questions about its long-term prospects,” the letter states. “Granting Chevron its No Action request could be seen as opening a door to a potential flood of subpoenas by companies that disagree strongly with collaborative investor engagement on topics they oppose.” 

Chevron also faces a resolution requesting that it report on the management of risks associated with the controversial practice of hydraulic fracturing. Three other oil gas companies face resolutions addressing fugitive methane emissions from natural gas development, and shareowners have requested that Continental Resources reduce natural gas flaring in its operations in North Dakota. In all, ICCR members filed 36 environmental health resolutions on a range of issues. 

Members also filed 14 human rights resolutions, five of which ask companies to develop human rights policies that align with the Guiding Principles on Business and Human Rights.

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