“One of the biggest drivers right now is the potential for decreasing demand,” says Danielle Fugere, president and chief counsel of As You Sow, the nonprofit that wrote both reports. “And that’s driven by climate change… We’re in a decarbonizing economy. That’s one of the flags for companies–are they adjusting to that?”
Read MoreShareholder resolutions filed at Southern Company by an advocacy group, As You Sow, and faith-based investor coalition, the Tri-State Coalition for Responsible Investment (“Tri-State CRI”) sent Southern Company’s Board and management a strong message: to reduce carbon asset risk and align its business with a “2 degrees” climate scenario, according to a press release.
One resolution, by As You Sow, would have required Southern Company to quantify and disclose its “carbon asset risk,” or the potential losses to shareholders from coal operations.
Read More“Folks perceive them to be a leader in the fight against addressing climate change,” said Danielle Fugere, president of the As You Sow nonprofit group, one of several that submitted resolutions to Exxon.
“They are the face of the anti-climate movement. And I think that’s why we see so many resolutions against Exxon,” Fugere said.
Read More“In a carbon-constrained world, what’s going to happen with these companies?” asked Danielle Fugere, president and chief counsel of the activist group As You Sow. “Traditionally, they’ve had to replace their reserves, or the market penalizes them. So how do they make this transition that we think is necessary?”
Chevron’s corporate board, however, has recommended shareholders reject the proposal, calling it unnecessary and confusing. As You Sow, based in Oakland, has presented the same proposal to ExxonMobil shareholders for their annual meeting on Wednesday, with Exxon’s board also opposing the change.
“It would be making a statement that Big Oil is really Big Energy,” said Andrew Behar, As You Sow’s chief executive officer. “When we have conversations with them, they keep saying, ‘No, no, we’re an energy company.’ And we say, ‘But you report in oil.’ You are what you measure.”
As You Sow’s proposal would expand that notion of comparing one resource to another, measuring all of an oil company’s reserves or energy-generating assets in BTUs. (One BTU represents the amount of heat required to increase the temperature of 1 pound of water by 1 degree Fahrenheit.)
Read MoreStill, they vote with boards on executive pay 97 percent of the time, according to As You Sow, an advocacy group that has received financial support from Silberstein. That record conflicts with popular sentiment. About 74 percent of those surveyed in a nationwide poll in February don’t believe chief executive officers are paid appropriately relative to workers, and 62 percent say there should be caps on their pay. The survey, conducted by Stanford University’s Rock Center for Corporate Governance, found those views are held across the political spectrum, and despite respondents underestimating how much CEOs actually earn.
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As You Sow’s Carbon Asset Transition, or “CAT” resolution, requesting that oil companies’ energy resources be accounted for, by category, in resource-neutral energy units as well as barrels of oil, could have profound implications for the future. It allows oil and gas companies to decouple their asset base from a sole focus on fossil fuel reserves and incentivizes their transition into becoming energy companies ready to thrive in a low carbon economy.
Recognizing that an orderly transition to a clean energy future must be facilitated, As You Sow’s Carbon Asset Transition proposal is a crucial first step: by decoupling traditional oil and gas company value from a sole focus on carbon-based asset replacement, companies will have an opportunity and incentive to become truly diversified energy companies providing large-scale clean energy. In addition to directly engaging companies with this resolution and working with other energy companies on voluntarily reporting in BTUs, As You Sow will also file a petition with the SEC. The petition will request the SEC add an energy-neutral metric to its current reporting requirement for oil and gas companies. Such a change would help free these companies from their oilcentric focus, which made sense historically but whose time is now past.
Read MoreA report published in February by As You Sow, a US non-profit group, reinforced the view that investors do not want to take a tough stance on executive pay.
As You Sow highlighted BlackRock, the world’s largest asset manager, and Vanguard, the second largest, as two of the fund companies most likely to approve “excessive compensation for CEOs” routinely.
“The 100 most overpaid CEOs deserve more scrutiny than they are getting today from mutual funds and pension funds,” says Rosanna Landis Weaver, corporate pay expert at As You Sow.
Read MoreA 2016 report from As You Sow, an organization that promotes environmental and social corporate responsibility through shareholder advocacy, identified BlackRock’s CEO, Laurence D. Fink, as the 51st most overpaid CEO in the S&P. Fink’s pay was raised 8 percent last year (to $25.8 million a year), nearly three times the 2.7 percent profit posted by the company — and at a time when BlackRock shares fell nearly 5 percent in value during the year.
That, As You Sow’s executive compensation analyst Rosanna Landis Weaver told Capital & Main, means that “BlackRock is a complete outlier in terms of votes. … Of the largest money managers, funds that have a lot of assets, Fidelity voted against [CEO pay packages] 21 percent; American Funds voted against 32 percent; Schwaab voted against 35 percent; and BlackRock voted against 3 percent from the ones that we looked at.”
Read MoreShareholder advocacy group As You Sow has tracked mutual fund voting at the 100 firms whose CEOs the group has deemed “most overpaid,” based on various performance indicators. Although these firms all claim to care about carefully aligning the interests of CEOs and shareholders, As You Sow found 10 funds that rubber stamp pay packages at phenomenal rates. The giant Vanguard mutual-fund family, for example, gave bloated CEO pay packages the thumbs up 97 percent of the time last year. The firm has also come under fire for its North Korean Parliament–style voting on another set of inequality-related shareholder proposals, those that ask corporations to disclose their political spending.
The data from As You Sow raise a deeper question: In the end, can we really rely on shareholders to fix our broken CEO pay system?
Read MoreThe pressure on pharma is not likely to die down. Recently, a non-profit “As You Sow” launched a campaign to push pharma companies to pay for take-back programs. The nonprofit sent a letter to the heads of ten pharmaceutical firms asking the companies to issue policy statements, notes STAT. It also placed shareholder resolutions calling on three drug makers to review their policies on take-back programs.
Read More“It’s outrageous. This is a man who has helped drive not only a company but maybe the world over a cliff,” said Rosanna Landis Weaver, an executive compensation specialist with As You Sow, a group that promotes social and environmental corporate responsibility and who believes Exxon should move into renewable energy. She said his compensation cut was “a largely symbolic reduction on a package that was exorbitant.”
Read MoreAs You Sow recently sent a letter to the heads of ten pharmaceutical firms on behalf of the funds asking the companies to issue policy statements on drug take back programs. These programs are designed to reduce environmental contamination and lower the risk of prescription drug abuse from unused drugs.
The non-profit As You Sow is building on this local interest and hopes to force companies to address the disposal problem. In its letter, the group asks for companies to develop policies on the take back of unused drugs.
In addition, As You Sow has proposed shareholder resolutions requiring that Merck, Johnson & Johnson and AbbVie pay for the take-back programs. The reception from the three companies has been relatively cold, with all three drugmakers recommending shareholders vote against the proposals, according to Stat.
Read MoreAs You Sow, a nonprofit organization that promotes shareholder advocacy, disagrees. In a recent study, it concluded that Mr. Fink was the 39th-most-overpaid chief executive among 100 large companies.
Read MoreShareholders have filed 94 proposals tied to climate change as of February, a 15 percent bump from the 82 proposals filed in 2015, according to a recent report by the groups As You Sow, Proxy Impact and Sustainable Investments Institute.
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“This is a massive public health crisis,” said Austin Wilson, who works with As You Sow, a Bay Area nonprofit that, among other corporate citizenship initiatives, urges shareholders of the major movie studios to demand R-ratings for films that feature smoking.
Read MoreCome May 18, at the company's annual meeting in suburban Lincolnshire, Mondelez shareholders will vote on a proposal introduced by As You Sow, a California-based nonprofit that challenges corporations on social and environmental issues. The group has brought similar proposals to Mondelez investors for the last three years, receiving about 28 percent support last year.
"We are sending a message here that's slowly catching on," said Conrad MacKerron, senior vice president of As You Sow. "We'll see what happens."
Oreo and Chips Ahoy cookies are "increasingly packaged in flexible film or other plastic packaging, such as pouches, that are not recyclable," according to As You Sow's proposal.
As You Sow is requesting a report that would assess the environmental impact and financial risks of using nonrecyclable packaging and set a timeline for phasing out such materials.
As You Sow doesn't typically buy shares of a given company directly, instead partnering with like-minded shareholders who sign off on the group representing their interests, MacKerron said.
"Over the years, McDonald's has engaged in constructive dialogue with As You Sow on a variety of topics, such as a multistakeholder project to address supply chain working conditions in Chinese toy factories and general conversations with updates on McDonald's packaging," McDonald's spokeswoman Lisa McComb said in an email.
The proposals are intended to "forestall harm, create value for the company or hopefully both," said Danielle Fugere, president and chief counsel of As You Sow. And even shareholder proposals that receive very little support can start a conversation within a company.
"It's an important process no matter what the outcome is in a given year," Fugere said.
Read MoreOne resolution, supported by the Oakland-based nonprofit advocacy group As You Sow, requested that the company report its energy resources in terms of BTUs, a scientifically-recognized measurement of energy, rather than in terms of “barrels of oil equivalent.” What this does is level the playing field by treating all forms of energy, including renewables, as essentially interchangeable.
Danielle Fugere, As You Sow’s president and chief counsel, pleased with the SEC ruling, said: “Exxon must allow shareholders to vote on this first step on the path toward clean energy. Broad support will give management the latitude to develop a diverse and profitable low-carbon business plan, while maintaining 100 percent BTU energy replacements.”
As You Sow also filed a petition with the SEC to change this metric for the entire industry.
Read MoreTesting commissioned by As You Sow, and conducted at independent laboratories, indicates that the chocolate products contain lead and/or cadmium, and they fail to provide the legally required warning to consumers.
“Lead exposure is associated with neurological impairment, such as learning disabilities and decreased IQ, even at very low levels. In fact, there is no safe level of lead for children," said Eleanne van Vliet, MPH, As You Sow's environmental health consultant.
As You Sow has filed legal notices against chocolate manufacturers, including Trader Joe's, Hershey's, Green and Black's, Lindt, Whole Foods, Kroger, Godiva, See's Candies, Mars, Theo Chocolate, Equal Exchange, Ghirardelli, Earth Circle Organics and more, for failure to warn of lead and/or cadmium in their chocolate products.
Recent revelations of lead contamination in water in Flint, Michigan raised awareness that lead is irrefutably linked to neurological impacts in children. Since 1992, As You Sow has led enforcement actions resulting in removal of lead from children's jewelry and formaldehyde from portable classrooms.
“Lead and cadmium accumulate in the body, so avoiding exposure is important, especially for children," explained Danielle Fugere, As You Sow president. “Our goal is to work with chocolate manufacturers to find ways to avoid these metals in their products."
Read More“We are pleased the SEC sided with shareholders concerned with climate risk," said Danielle Fugere, As You Sow's president and chief counsel. “Exxon must allow shareholders to vote on this first step on the path toward clean energy. Broad support will give management the latitude to develop a diverse and profitable low carbon business plan, while maintaining 100 percent BTU energy replacements."
In response to Exxon's SEC bid to stop the resolution from being voted on by shareholders, As You Sow successfully argued that, “... in a rapidly decarbonizing economy, fossil fuel companies must develop climate change-responsive business models" and one possible path is to transition into energy companies not dependent on carbon intense, climate damaging commodities.
Exxon currently accounts for its energy assets in “barrels of oil equivalent." As You Sow noted in its SEC reply that this accounting measure discourages a low carbon transition by linking the calculation of a company's assets, and therefore its value, to carbon based-metrics.
As You Sow is simultaneously filing a petition with the SEC to change its reporting requirements to an energy neutral metric, which will free the oil industry as a whole from oil-dependent financial valuation.
Read MoreShareholder Advocate, As You Sow, Defeats Exxon on Push for Climate-Friendly Accounting
Exxon currently accounts for its energy assets in "barrels of oil equivalent." As You Sow noted in its SEC reply, that this accounting measure discourages a low carbon transition by linking the calculation of a company's assets, and therefore its value, to carbon based-metrics. The resolution proposes reporting company energy resources neutrally, by category, so that all resources – including solar, wind, biofuels, geothermal, and other renewables -- will be accounted for as BTUs and valued. This metric decouples Exxon and its shareholders from oil's declining profitability, its escalating climate damage, and Exxon's decreasing ability to economically replace its oil reserves.
As You Sow is simultaneously filing a petition with the Security and Exchange Commission (SEC) to change its reporting requirements to an energy neutral metric, which will free the oil industry as a whole from oil-dependent financial valuation.
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