Stewardship | March 16, 2022

Emboldened shareholders ready fights with management on human rights, climate and political spending

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha, March 16 – Grab some popcorn and pull up a chair. This year’s annual general meetings season, when corporations face off with their shareholders, is shaping up to be a blockbuster. 

Emboldened by a series of big wins last year, capped by Engine No. 1’s takedown of ExxonMobil, investors are readying a bumper crop of proposals for votes at this year’s shareholder meeting. Momentum for action on racial equity, climate action and political spending has spread beyond big investors to include activists, customers, employees and other stakeholders who are joining forces to hold companies accountable. 

Even Carl Icahn is on board. The financier better known for corporate raiding is agitating for McDonald’s and its suppliers to stop confining pregnant pigs to crates. For the fast food giant’s board of directors, Icahn is pushing Leslie Samuelrich, head of impact investor Green Century Capital Management, and Maisie Ganzler of Bon Appétit as outside directors. 

Proponents are being helped by a more investor-friendly U.S. Securities and Exchange Commission, which rolled back Trump-era rules aimed at squelching shareholders’ voices. The new standards “will increase not only the quantity of shareholder proposals that appear on ballots, but also the specificity of what the proposal requests of the company,” the asset manager Nuveen writes in its proxy season preview. 

“Directors should be prepared for more issues to go to a vote in the 2022 proxy season,” adds The Conference Board’s Merel Spierings.

One early signal of shareholder unrest: At Apple Computer’s general meeting this month, investors approved resolutions calling for a third-party civil rights audit and a report on its use of nondisclosure agreements. Less than two-thirds of shareholders voted for Apple chief Tim Cook’s $99 million pay package. 

Shareholder resolutions are non-binding, but can put significant pressure on management and signal broader shifts in corporate norms and regulations.

Eli Kasargod-Staub of Majority Action said last year’s record number of shareholder wins is likely to be exceeded this year. The critical question, he says: “How should shareholders respond when boards fail to heed these majority votes and actually address significant environmental, social and governance risks?” 

Companies, including Chevron and Wendy’s, have ignored shareholder majorities. “The time has come for shareholders to hold these boards accountable,” he told ImpactAlpha. 

Some 34 environmental, social and governance proposals received majority votes last year, shattering 2020’s record of 21 such votes, according to Proxy Preview, which is hosting a, well, preview on Thursday.  

Some of the trends and issues we’re watching:

Beyond disclosure on climate

The series of dire climate assessments by the Intergovernmental Panel on Climate Change have warned of the consequences of inaction and failure to limit global temperature rise to 1.5 degrees. Investors are stepping up their pressure on corporations to go beyond reporting and far-off goals to transition plans and action. 

The expectation of mandatory climate disclosure may also put boards in a more amenable mood. The looming question: whether regulators will include in the mandate so-called “Scope 3” emissions that cover a company’s entire value chain. The SEC is expected to propose new rules for mandatory climate disclosure next week.

ClimateAction 100+ has flagged for special attention: a request that Berkshire Hathaway report on physical and transitional climate-related risks and opportunities (a similar proposal filed last year won a significant majority of non-insider votes); that Valero Energy adopt near- and long-term greenhouse gas reduction targets aligned with the Paris Agreement goals; and a halt to oil and gas exploration and new development by Imperial Oil.

The proposals “carry a clear message from investors: companies must act immediately and take ambitious, necessary climate action,” said Mindy Lubber,  Ceres CEO and President and a member of the global steering committee for Climate Action 100+.

Holding directors accountable

Investors are getting personal. They are increasingly willing to vote against board directors that do not heed their calls for better environmental, social and governance performance. Investors themselves must increasingly contend with their own transparency, accountability and impact when it comes to stakeholder expectations,” writes Nuveen. “Votes against boards based on unmet E&S expectations may be the new frontier of active ownership.” Unlike resolutions, votes on board of directors are binding on companies.

At Chevron, nearly two-thirds shareholders last year approved a measure asking the oil company to substantially reduce the “Scope 3” greenhouse gas emissions from the use of its products. Chevron’s response, to reduce its carbon intensity by just 5% by 2028, infuriated investors.  

“Five percent is disappointing tokenism, not a serious attempt to confront the climate crisis,” said Mark van Baal of shareholder group Follow This, which filed the proposal. 

Chevron is one of 27 companies at which Majority Action is urging shareholders to vote against the board chair and/or lead independent director. Investors including CalPERS, the New York State Common Retirement Fund, and the Illinois and Vermont state treasurers are among those using director votes to hold companies accountable. 

Human capital management

From racial equity to civil rights audits, corporations’ treatment of employees is on the ballot this year. 

The vote at Apple to press for a third-party audit of Apple’s policies and recommendations for improvements in its performance on civil rights was “a huge message from investors saying that they really care about human capital management,” Nia Impact Capital’s Kristin Hull told CNBC. 

Pfizer, Walmart and Amazon are among the companies facing similar resolutions. “I have never witnessed such energy for any kind of shareholder proposal in my life as I have for the filing of racial equity audit and shareholder proposals for the 2022 season,” Kasargod-Staub told ImpactAlpha

Political spending

The Jan. 6, 2021 attack on the U.S. Capitol catapulted political spending to the top of investor agendas. The threat to the U.S. democratic system has become a material risk for corporations, sparking a wave of resolutions asking companies including Twitter, DISH Network and Royal Caribbean Cruises to report on their contributions to elected officials and political groups.

“Political spending has an effect on the foundation of long term value creation itself, which is a stable and inclusive democracy,” says Kasargod-Staub of Majority Action. Political spending resolutions garnered an average 48% vote last year, up from 41% in 2019. 

Investors also continue to scrutinize corporate funding of groups that lobby against or disseminate disinformation about climate change. 

“Expect a collision between companies and both shareholder activists and the broader shareholder base in three areas: political contributions, climate-related lobbying, and traditional lobbying,” writes the Conference Board in its 2022 proxy season preview. “Investors are increasingly calling out companies for actual or perceived tension between their political activity and stated positions on [environmental and social] issues.


Many proposals this year are being withdrawn before they even come to a vote, underscoring the value of engagement, also known as stewardship. “Stewardship has become an essential tool in the responsible investing toolkit ─ a way for shareholders to push for real change,” said Nuveen’s Peter Reali. 

“Boards should judge success during this proxy season based on whether the company has maintained constructive, ongoing dialogues with their major investors,” says The Conference Board’s Spierings. “This is more important than any vote on a precatory shareholder proposal.”

Multi-movement engine

Institutional investors have traditionally led shareholder campaigns. But a popular movement is growing to bring together workers, customers and communities in coordinated campaigns to hold corporations – and the big asset managers that are their largest shareholders – accountable. “There is enormous opportunity for truly intersectional campaigning,” says Kasargod-Staub. 

Startups such as Tulipshare and Troop have launched platforms that make it easy for retail investors to weigh on director votes and proposals before corporate boards. Tulipshare engaged with Apple last year on the right to repair issue. This year, it filed resolutions with Johnson & Johnson to end sales of cancer-causing products, at Amazon calling for fair and safe work environments, and for racial diversity at Salesforce.  

“It’s a very, very exciting cornerstone year, this 2022 AGM season,” Tulipshare’s Antoine Argouges told ImpactAlpha. “We can feel it in the market. We can feel it when we’re engaging with shareholder advocacy groups and institutional investors.”