For decades, the shareholder proposal process has served as a cost-effective way for corporate management and boards to gain a better understanding of shareholder concerns, particularly those of longer-term shareholders concerned about the sustainability of the companies they own. 

Engagement by members of the Interfaith Center on Corporate Responsibility (ICCR) and other shareholders has served as a crucial early warning system that helps companies identify emerging risks. 

For example, as problems mounted in the housing market in 2007, members filed resolutions at financial institutions asking for disclosure of risks associated with the mortgage securities crisis. The SEC staff deemed the subject—evaluation of risk—to be ordinary business, yet the ensuing financial crisis confirmed that risks associated with subprime lending had not been fully priced into those securities, nor had those risks been appreciated by organizations hired to rate those securities. 

ICCR members were again among the first shareholders—as early as 1991—to flag climate change as a risk for companies. Although initial proposals received low levels of support, as awareness has grown of the potentially catastrophic impact of climate change, proposals seeking climate-related disclosure have received majority support and companies as a result are increasingly managing these risks. 

Our members’ engagements on human trafficking and forced labor in global supply chains have resulted in enhanced recruitment policies and supplier codes at companies in the agricultural, food and beverage, tech, and apparel sectors. And, as a result of focused engagements with the pharmaceutical sector, HIV/AIDS medicines are available for generic manufacture, exponentially increasing accessibility for millions of patients. 

The history of ICCR contains hundreds of examples of companies changing their ESG practices after productive engagement with shareowners. 

Recent examples of such change include:

• Bank of America, BNP, JPMorgan Chase (Investor Advocates for Social Justice), PNC (Trillium), SunTrust (United Church Funds), and Wells Fargo (Sisters of St. Francis and SEIU) announced they would stop financing private prisons;

• Biogen acknowledged that its high drug prices are a clear business risk (Mercy Investment Services);

• A resolution filed by the Midwest Capuchins led Kraft Heinz to commit to publish a global human rights policy and assess its related risks;

• A 2019 Trillium Asset Management resolution moved EOG Resources to set both qualitative and quantitative methane emissions reduction targets;

• Boston Common persuaded Verizon to increase its disclosure of its lobbying policies and procedures, and;

• Twelve companies, including Endo and Cardinal Health, published reports on oversight of risks related to the opioid crisis following receipt of shareholder proposals from ICCR members and Investors for Opioid and Pharmaceutical Accountability.

From the ramifications of new technology on data privacy, immigrant rights, and child sexual exploitation, to the importance of proxy voting support for climate-related proposals by major funds like BlackRock, JPMorgan Chase, T. Rowe Price, and Vanguard Funds, ICCR member proposals provide continued evidence of our members’ foresight in identifying critical emerging risks and opportunities for both corporations and the investment community.

Josh Zinner
CEO, Interfaith Center on Corporate Responsibility