As financial markets increasingly take into consideration growing climate change-related risks to businesses, investors have seen their shareholder resolutions on that issue receive more support. At the same time, some common ground has emerged about how companies can respond to increasing risks and opportunities connected to our changing world; this has pushed the number of withdrawn proposals higher. In 2020, activists have offered 64 climate proposals so far. A further 29 resolutions about a variety of environmental management issues address agriculture (including farm animal welfare concerns), water, hazardous materials and waste.

LAWSUITS

In addition to revising proposal requests about GHG goals, proponents also have sued, seeking court decisions that would supersede any SEC no-action letter.

2019: The New York City pension funds went to court in December 2018 after TransDigm challenged its resolution seeking “time-bound, quantitative, company-wide goals for managing green-house gas (GHG) emissions, taking into account the objectives of the Paris Climate Agreement,” and a progress report. TransDigm initially reiterated an argument used in 2018 by EOG Resources to successfully challenge a GHG goals proposal in its challenge to TransDigm. But the NYC funds filed suit seeking a federal court injunction to require inclusion of the proposal. TransDigm ultimately agreed to include the proposal and the case was closed, as the Comptroller’s Office noted in a January 2019 press release.

2020: This year, another proponent, attorney Tom Tosdal of Montana, has a similar lawsuit. His proposal is much more detailed than the NYC version, however, and asks Northwestern to end coal use and start using renewables (see p. 20 ). On Dec. 17, the company contended at the SEC that the proposal concerns ordinary business and is false and misleading. But five days later Tosdal filed suit, seeking an injunction from the U.S. District Court in Montana to require inclusion of the proposal. On Jan. 9, the SEC said it would not respond to the company’s complaint given the pending litigation. (The proposal, the company’s response, the lawsuit and the SEC’s response are available here.) The court threw out the suit and denied the injunction as Proxy Preview went to press.

(The section on Sustainable Governance, p. 57, examines related reporting proposals, which also request more transparency from companies about environmental management at their own operations and in their supply chains, in conjunction with reporting on social issues and related ties to executive compensation as well as board oversight.)