Climate change poses growing risk to the individual companies in which shareholders invest and, significantly, to shareholders’ broader portfolios. As climate related harm accelerates, economy-wide losses are increasing and hurting portfolios. A 2018 analysis in Nature suggests that keeping global temperature rise below 1.5 degrees instead of 2 degrees can prevent over $30 trillion in economic damage.
Read moreFossil Fuel Industry Sees Plastic As Saving Grace, But Demand May Plummet
Plastics and other petrochemical goods are set to overtake the transport sector as the largest driver of global oil demand. Oil and chemical companies have invested a whopping $180 billion in new and projected plastics facilities, largely due to the fracking boom. But calls by governments and a variety of stakeholders to reduce single use plastics raise questions about whether projected demand for plastic products may slump, resulting in stranded petrochemical assets. Furthermore, extreme weather is creating new risks from flooding that exacerbate plastics pollution risks from petrochemical plants.
Read moreShareholders Play Key Role In Reducing Deforestation And Climate Risk
As investors analyze the climate resiliency of their portfolios, they should consider risks associated with the agricultural sector and especially the conversion of forests and peatlands to crop and pasture land. The burning and razing of forests is one of the largest contributors to global greenhouse gas emissions. Deforestation contributes as many greenhouse gas emissions as the global transportation sector, with commodity-driven deforestation itself responsible for two-thirds of tropical forest loss.
Read moreShareholder Majority Calls On Gun Makers To Help End Gun Violence
Gun-related deaths in the U.S. are at a 20-year high. In fact, data from the Centers for Disease Control and Prevention (CDC) show the number of deaths from gunfire to be nearly 40,000 in 2017 – the equivalent of 12 deaths per 100,000, and the highest rate since 1996.
Read moreCounting Women Counts: Mixing Genders On Boards Is Good Business
Board diversity is not a new topic for investors and governance professionals; it is a topic resonating with a new audience: state legislators.
Read moreInvestors Determine Materiality
We are at a crucial moment in the history and future of our securities laws. I am delighted to have a chance to share my thoughts on the critical work that Proxy Preview is doing to help investors hold American corporations accountable to ordinary American investors.
Read moreNew Report Benchmarks Integrated & Sustainability Reporting For The S&P 500
Requests for sustainability reports are evergreen in proxy season; investors have filed more than 300 proposals since 2010. These requests for companies to provide quantified, comparable metrics about their performance on key environmental and social impacts earn substantial, sustained support from investors, with eight majority votes this decade. Most companies are responding in some fashion, providing the metrics mainstream Wall Street analysts want to assess performance.
Read moreChild Sexual Exploitation Online—a Growing Risk For The Technology Sector
While Information and Communications Technology (ICT) companies are now widely-held components of many investor portfolios, they are also at the center of an escalating trend in children being sexually exploited and abused online. The technology used in sex crimes against children is ubiquitous, from smartphones to gaming consoles, and through various apps, text messaging, social media sites, cloud storage, and more. And yet, ICT companies rarely disclose how they are combating these growing risks, from identifying and blocking child sex images, to investing in new solutions to stay ahead of the abusers.
Read moreSASB Addresses Growing Demand For Sustainability Disclosure
U.S. public companies spend less time communicating with investors about ESG issues than their global peers. They also disclose less. U.S. investors, in turn, fall below the global average when incorporating ESG factors into their strategies, and have less influence over responsible business behavior. This aversion to transparency isn’t surprising, due to the treatment of “materiality” within U.S. securities law.
Read moreDiversity In The C-Suite: Why It’s Time To Shine A Light On Executive Leadership
As a growing number of companies acknowledge the strengths of a truly diverse workforce, an area too often overlooked is executive team diversity.
Read moreSocial Cost And Material Loss: The Dakota Access Pipeline
For 25 years shareholders have been raising concerns over corporate infringement on Indigenous Peoples’ Rights. Indigenous Peoples have helped to raise international awareness about how pipelines such as the Dakota Access, Keystone, and Trans Mountain projects harm local communities. Companies often minimize the social cost of public protests, even as investors contend that grassroots opposition can impose significant financial and brand risks.
Read moreMicromanagement And Executive Compensation Challenges Under New Sec Staff Bulletin
New interpretations by the SEC of the Shareholder Proposal Rule (14a-8) in 2017 led to an increase in omissions of climate proposals last year. There is reason for concern that the number of omissions could increase further in 2019, depending on how the SEC applies its latest SEC Staff Legal Bulletin 14J, issued on October 23, 2018.
Read moreChange In Proxy Voting As Major Asset Owners Accept ESG As Part Of Fiduciary Duty
Each year, investors file approximately 800 shareholder resolutions. In 2018, more than 450 proposals focused on environmental and social issues. For a significant portion of these resolutions, companies and proponents reached agreements and the proponents withdrew. But nearly 180 proposals went to a vote.
Read moreGender Pay Gap Is More Than Just Salary – It Is Also About Opportunity
Numerous studies show women are paid less than their male counterparts. This is a key challenge for companies as they face reputational risk, consumer backlash, new legislation and governmental and employee lawsuits. Just the perception of a gender pay gap can make it hard to recruit or keep top talent.
Read moreProxy Vote Data Complements Fund Ratings On Sustainability
Recent Morningstar research shows that the number and size of U.S. sustainability funds continues to grow. Notable recent additions include sustainable exchange traded funds (ETFs). Within this universe is a wide variation in strategies and commitment—from considering environmental, social and governance (ESG) alongside other factors, to integrating ESG in the investment process, to impact and green economy-focused funds.
Read moreYour Investments, Your Voice – New Tool For Individual Shareholder Advocacy
Imagine only 11 percent of people vote in an election. Imagine the perverse incentives that society would create. Now realize that, for the largest corporations that drive our economy, that is exactly what is happening.
Read moreScandal Plagued Facebook Needs Independent Board Chair
Mark Zuckerberg is both the CEO and Chairman of the Board at Facebook and because of his 60 percent voting power, he is, for all intents and purposes, accountable only to himself. Corporate governance experts and the Council of Institutional Investors have argued for years that an independent chair is vastly superior because that person is free of conflicts created by a chair who can excessively influence the rest of the board and its agenda. An independent chair is better able to monitor the management of the company on behalf of its shareholders and we see the structure virtually everywhere. For example, the percentage of S&P 500 companies with a unified CEO/chairman is at a decadal low of 45.6 percent. Leading technology companies like Apple, Alphabet, Autodesk, Microsoft and Intel all have independent chairmen.
Read moreThe Link Between Higher Drug Prices And Executive Pay
Prescription drug expenditures make up nearly 20 percent of all health care costs, and spending for prescription drugs is growing faster than any other part of the health care dollar. A Kaiser Health Tracking Poll in early 2018 found that one out of four patients have a difficult time affording their medicines. December 2018 POLITICO poll showed the public’s top priority for the 116th Congress is taking action to lower prescription drug prices.
Read moreMajority Support For Disclosure Of Opioid Financial Risk
Since mid-2017, Investors for Opioid Accountability (IOA), a coalition founded by Mercy Investment Services and the UAW Retirees Medical Benefits Trust, has become the leading shareholder force in the fight against the opioid epidemic ravaging the United States. It now represents 54 investors with more than $3.5 trillion in assets under management. In 2017, more than 70,000 Americans died from drug overdoses, the most ever in a single year. Of the 700,000 American deaths from drug overdoses since 1999, more than two-thirds were from opioids and many involved prescription opioids.
Read moreThe Growing Regulatory Risk Of Modern Slavery In Global Supply Chains
Globally, it is estimated that over 40 million people living in situations of modern slavery. Approximately 16 million people are in forced labor in the private economy, in mines, factories and fields harvesting raw materials and manufacturing products for global supply chains. Over the past few years, revelations of modern slavery conditions have been traced to the supply chains of major corporations, from smartphones produced with forced child labor in the DRC, to seafood caught by trafficked migrant workers in Thailand.
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