Also, Danielle Fugure, president of California nonprofit As You Sow, said last month it withdrew a shareholder resolution calling for a climate risk report from Anadarko Petroleum Corp. In return, she said, the Texas company agreed to continue to work with her group and others to develop methods for reporting on climate risks that would be practical for the company but still convey to investors the full extent of the risks it could face.
Read MoreMeanwhile, carbon asset risk is still on the agenda for Chevron's shareholders this month: the proposal on transition to a low-carbon economy filed by As You Sow will go forward to a vote. As UCS closely monitors Chevron's and ExxonMobil's communications and engagement with concerned shareholders over its climate-related positions and actions, our experts and supporters will be stepping up the pressure on both companies in the lead-up to their annual meetings at the end of May.
Read MoreRosanna Landis Weaver, corporate pay expert at As You Sow, a pressure group that campaigns for responsible investment, is visibly frustrated by the situation. “Vanguard is growing and growing. Its size in the market gives it a huge responsibility. I think passive investment and low fees definitely have a place, but passive investment should not mean that voting [by asset managers] is passive as well.” As You Sow compiles an annual list of what it considers to be the 100 most overpaid chief executive in the US, based on metrics including total shareholder return versus increases in bonus payments and share awards.
According to As You Sow’s latest report, released in February, Vanguard voted against nine of the 100 most overpaid chief executives last year, which the campaign group described as a “shockingly low number” and “way below almost every other fund manager’s [record]”.
There is an additional business incentive for Vanguard to take a tougher stance. Ms Landis Weaver says she used to invest in one of the company’s funds, but recently sold out due to Vanguard’s voting record.
I strongly suspect other clients — both large institutions and individuals — would also like to see firmer action by the fund house to tackle the widening gap in earnings between company executives and average workers. And what is there to lose? Such action would only improve the company’s public image even further.
Read MoreFossil Free Funds scorecards investment companies for carbon contamination. It informs us, for example, that the Vanguard Health Care sector fund (VHT) is relatively innocent, accounting for 8 tons a year of carbon dioxide, or the equivalent in other greenhouse gases, per $1 million salted away. VHT is clean because Pfizer and Merck don’t own steel foundries. With an index fund you'd be looking at 155 tons.
Read MoreAndrew Behar, author of The Shareholder Action Guide, stresses the importance of small shareholders to guide corporate America to make better decisions on behalf of both the companies and the public at large. “For 70 years the shareholder proposal rule has been an effective tool to support the ownership interests of all shareholders,” notes Behar. “The process gives us an essential tool to engage with boards and management to reduce risk and improve governance. Bottom line, shareholders provide a new and objective perspective to help make companies better in the long-term.”
Read MoreQ5: How should sustainable investors react to 2016's political events?
"In the U.S., we need to defend against any efforts to weaken our ability to engage and file shareholder proposals with companies. Small and medium-sized shareholders, like those of many SRI firms, have often been the early warning system to companies on business risk. It is often passionate smaller investors who educate companies first on issues that could blow up eventually into big crises, like toxic ingredients, air and water pollution and waste, and supply chain labor rights. In many instances, these are brought initially to investors’ attention by committed social and religious investors."
Read MorePolystyrene foam used for direct-to-consumer packing materials is rarely recycled, As You Sow says. “More than 100 U.S. cities or counties and nine countries have banned or restricted foam packaging in various forms,” states the group.
“We are pleased that Target has committed to work with corporate partners and peers to press for alternatives to environmentally harmful foam,” says Conrad MacKerron, As You Sow senior vice president.
Read MoreAs You Sow, an environmental health watchdog group, and members of the Interfaith Center on Corporate Responsibility (ICCR), recently withdrew the proposal following “productive discussions” with the restaurant company.
“This policy is good news for modern medicine and for long-term shareholder value,” said Austin Wilson, environmental health program manager at As You Sow.
Read MoreThe decision by Duke Energy, the largest utility in the US, to switch to a virtual meeting this year, was criticised by As You Sow, a shareholder group that has put a resolution on the agenda demanding information on pollution from its coal-fired power plants.
“They do not want to face the folks they have harmed,” said Danielle Fugere, president of As You Sow. “Our goal is to make the board understand how important these issues are but, if you are so many voices on a webinar, you lose the impact of the message. It feels like they are running away from their shareholders.”
Read More“In many cases, I think businesses disagree with the administration,” said Danielle Fugere, president of As You Sow, a nonprofit group that uses shareholder resolutions to advocate for greater corporate environmental and social responsibility.
Read More“They got less cash, but they could end up making more money than they did the prior year,” Rosanna Weaver, a program manager following executive compensation for corporate responsibility group As You Sow, told The Post.
Read More"Many companies, especially leaders on environmental and social issues and good corporate governance, are not leaping to end transparency, halt engagements and block shareholder input," said As You Sow CEO Andrew Behar in the report. "Instead, they look to investor advocates to uncover win-win situations that benefit all stakeholders."
In 2017, As You Sow submitted a shareholder proposal for Amazon.com and Target to issue a report about the environmental impacts of foam packing materials. This included "quantifying the amount that could reach the environment, the potential for increased risk of adverse health effects to marine animals and humans."
A similar proposal was made to McDonald’s, which has swapped "polystyrene foam beverage cups" for "foam packing."
As You Sow said on its website that it uses resolutions as a way to leverage the power of stock ownership in publicly traded companies to promote environmental, social and governance change from within.
Resolutions are placed on the company’s proxy, and any shareholder owning at least 1 percent, or $2,000 worth of stock, for at least a year is allowed to bring up a shareholder proposal.
Read MoreAndrew Behar, CEO of As You Sow, emphasized that shareholder proponents remain committed to “protecting hard-won gains” that form from their relationships with corporations -- especially since the new administration is “bent on cutting government regulations and rolling back legislation on everything from financial reform to healthcare and the environment,” he said.
Read MoreAs You Sow flagged as "overpaid" a number of chief executive officers known for high compensation despite the mixed performance of their companies' shares over the period.
The Oakland, California nonprofit found the average returns for the 100 S&P 500 companies it had previously identified as having the most questionable pay went on to underperform the index by 2.9 percentage points over a roughly two-year period ended on Jan. 31.
Study lead author Rosanna Landis Weaver said investors could have used the findings of a similar report from 2015 to short the shares of companies giving their CEOs outsized rewards.
"If you have a CEO whose primary interest is increasing his own wealth, that's not going to be good for shareholders," she said in an interview.
As You Sow made a financial prediction of what each CEO might have been paid based on shareholder returns. Companies with the most red flags and biggest gaps between their actual and predicted compensation were judged the most overpaid.
Read MoreThe proposal was brought about by As You Sow, a group that promotes corporate accountability on the environment, on behalf of the Gun Denhart Living Trust and other investors.
Read MoreThe non-binding proposal submitted by activist group As You Sow on behalf of the Gun Denhart Living Trust and other investors received the support of 30 percent of votes cast, Sanderson Chief Financial Officer Mike Cockrell told Reuters.
Read MorePatricia Jurewicz, director of the Responsible Sourcing Network and creator of initiative Yarn Ethically and Sustainably Sourced (YESS) working in spinning mills, said the cotton supply chain remained tainted despite initiatives to clean it up.
“There are improvements little by little and the most where brands get involved in production as they don’t want to be linked to abuse,” she said. “But there’s a long way to go”.
Read MorePhasing out the use of polystyrene has been a priority of As You Sow's for years. Based on a 2011 shareholder resolution they encouraged McDonald's to try a pilot program that eventually resulted in the company making a full switch to paper in 2013. Though the company has yet to do this outside of the U.S. and Dunkin' Donuts hasn't followed up on a similar promise. Resolutions have also been filed with Amazon and Target, which mainly use the material for shipping.
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