A hazy picture for shareholders

Presented by American Beverage Association:

Jun 08, 2023 View in browser   By Allison Prang Presented by THE BIG IDEA This year's proxy season hasn't been kind to environmental proposals so far. Shareholder proposals dealing with environmental issues have garnered significantly less support this year than last, according to numbers compiled by the Sustainable Investments Institute. We're about three-quarters of the way through proxy season, and a few trends are becoming apparent. Seventy-two environmental resolutions that received shareholder votes this year got an average of 21.3 percent support through June 1, SII said, compared with 33.8 percent last year. That includes proposals like one calling on UPS to adopt science-based greenhouse gas reduction targets, which received 28 percent support this year and 20.4 percent in 2022. One bright spot was resolutions calling on banks to detail how they're going to meet their emissions targets. Proposals at Bank of America, Wells Fargo and Goldman Sachs calling on the firms to report on climate transition planning got 28.5 percent, 31 percent and 29.9 percent support respectively, according to As You Sow, an advocacy group. At JPMorgan, a similar proposal received 35 percent support. But proposals calling on JPMorgan, Bank of America, Citigroup and Wells Fargo to phase out fossil-fuel financing got no more than 10 percent support, according to the Sierra Club. Kate Monahan, director of shareholder advocacy at Trillium Asset Management, which put forth the fossil-fuel proposal at Bank of America, said this year’s version got less support than than the firm’s 2022 proposal even though it was less prescriptive. She said she thinks that could be in part because of “larger asset managers backtracking in terms of their votes on climate.” Meanwhile, support for all types of ESG proposals also saw a drop. The 626 proposals on environmental, social and governance issues that SII tracked received 21.5 percent support, compared with 29.3 percent last year. Sustainable investing advocates blamed the results on the anti-ESG movement. Republican pressure that has ratched up on asset managers and financial firms that conservatives accuse of being hostile to fossil-fuel interests has weighed on shareholder proposal outcomes, according to shareholder advocacy experts. “I think there's been much more caution from some of the big institutional investors about sticking their neck out on some of the ESG claims where there isn't a proven business case,” said Witold Henisz, faculty director of the ESG Initiative at the University of Pennsylvania’s Wharton School. “And there's a higher evidentiary bar people don't want to seem like they're leading on this issue.”   A message from American Beverage Association: At America’s beverage companies, we are committed to reducing our plastic footprint. That’s why we’re carefully designing our plastic bottles to be 100% recyclable, including the caps. Our goal is for every bottle to become a new one, so they don’t end up in nature. Learn more at EveryBottleBack.org.   –The war in Ukraine has also weighed on support for certain ESG proposals, shareholder advocates say, with Russia’s invasion forcing a shift in focus to near-term energy demands. “You have a set of factors, a perfect storm, for suppressing the vote,” said Sanford Lewis, director of the Shareholder Rights Group. On the anti-ESG side, proposals proliferated but did as poorly as previous years. Of the 79 anti-ESG shareholder proposals that SII tallied, up from 45 in 2022, support stayed steady at roughly 3 percent. –The number of abortion-related proposals rose this year in the wake of the Supreme Court’s reversal of Roe v. Wade, but they generally fared poorly. At American Express, for example, a shareholder proposal calling on the company to report on risks related to providing information about customers for the enforcement of state laws criminalizing abortion got a vote of 11.6 percent, according to Shelley Alpern, director of corporate engagement at Rhia Ventures, which advised some of the firms that put forward reproductive health-related proposals. Alpern said votes on abortion-related proposals were lower this year, which she attributed to pressure from Republican state officials on asset managers.   A message from American Beverage Association:   YOU TELL US GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability. Team Sustainability is editor Greg Mott, deputy editor Debra Kahn and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, dkahn@politico.com, jwolman@politico.com and aprang@politico.com. Want more? Don’t we all. Sign up for the Long Game. Four days a week and still free!   GET READY FOR GLOBAL TECH DAY: Join POLITICO Live as we launch our first Global Tech Day alongside London Tech Week on Thursday, June 15. Register now for continuing updates and to be a part of this momentous and program-packed day! From the blockchain, to AI, and autonomous vehicles, technology is changing how power is exercised around the world, so who will write the rules? REGISTER HERE.     WHAT WE'RE CLICKING — Solving the plastic pollution crisis is going to require substitutes for the ubiquitous material that have proven hard to come by, the Washington Post reports. — The Biden administration is backing union efforts to ensure that a major California port's green transition doesn't eliminate jobs, according to Reuters. — Bloomberg reports that new data could help steer natural gas investors and buyers away from producers with high levels of methane emissions.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       A message from American Beverage Association: America’s leading beverage companies - The Coca-Cola Company, Keurig Dr Pepper and PepsiCo - are working together to reduce our industry’s plastic footprint through our Every Bottle Back initiative. We’re investing in efforts to get our bottles back so we can remake them into new bottles and use less new plastic.  Together, we’re:  Designing 100% recyclable plastic bottles – we’re making our bottles from PET that’s strong, lightweight and easy to recycle.    Investing in community recycling – we’re marshalling the equivalent of nearly a half-billion dollars with The Recycling Partnership and Closed Loop Partners to support community recycling programs where we can have the greatest impact.  Raising awareness – we’re adding on-pack reminders to encourage consumers to recycle our plastic bottles and caps.      Our bottles are made to be remade. Please help us get Every Bottle Back.     Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Jordan Wolman @jordanwolman Allison Prang @AllisonPrang   Follow us

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