Let’s talk: sustainability, Issue 2

2014 preview of environmental and social shareholder proposals

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A preview of environmental and social shareholder proposals

Environmental and social topics continue to be the dominant category of shareholder proposals based on the number of proposals submitted – more than half to date.

They also represent the leading area for proposals withdrawn in connection with successful company-investor engagement and agreement prior to the proposal going to a vote. This agreement may include implementation of the proposal in part or full, providing additional disclosure, or a commitment to ongoing dialogue on the topic.

Three of the 10 most commonly submitted shareholder proposals – across all topics – focus exclusively on sustainability:

  1. Requests for first time or enhanced sustainability reporting is the most heavily filed sustainability proposal to date, with a growing number asking for reports on the sustainability performance of suppliers or to require significant suppliers to issue sustainability reports.
  2. Investors are also showing renewed interest in greenhouse gas (GHG) emissions cuts, asking companies to disclose quantitative goals. GHG proposals more than quadrupled from the same period in 2013.
  3. Investors also seek a review of and reporting on global labor practices and human rights, and include new proposals on risk assessments across a company’s global supply chain. These proposals are up about 20% from the same period last year.

Top 10 most common shareholder proposals in 2014

Publicly disclosed through March 21

EY chart – Top 10 shareholder proposals in 2014

The top 10 list includes two other proposals that share an overlapping focus on sustainability topics: proposals requesting increased disclosure and oversight of political and lobbying spending.

At least 25% of these proposals focus on whether corporate expenditures align with a company’s stated policies and practices on environmental sustainability. An even greater portion are likely driven by environmental sustainability interests based on a review of the investors submitting the proposals.

Top 10 most common shareholder proposals in 2014

Publicly disclosed through March 21

EY chart – Top 10 shareholder proposals in 2014
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