2024 ESG Proxy Vote Alerts

Biodiversity – Drug Patents – Attack on Shareholder Rights

WELCOME TO WEEK 2 (April 22-26, 2024) OF PROXY PREVIEW’S ESG PROXY VOTE ALERTS.

Our two featured resolutions this week include a new resolution on biodiversity risk – an existential threat that is just as much a crisis as climate risk but does not get the same attention; and a look at resubmitted proposals at Big Pharma seeking a report on how the patent process may affect access to care. We also provide updates on SEC rules, a controversial case pending before SCOTUS, and a lawsuit supported by the National Association for Manufacturers that aims to significantly limit investors’ ability to file shareholder resolutions.

Biodiversity Risk

Over half of the world’s economic output – US$44 trillion of economic value generation – is moderately or highly dependent on nature. Yet we are destroying nature and ourselves through products with toxic ingredients, plastic pollution, deforestation and habitat destruction that has already resulted in the extinction of thousands of species. The recently released Task Force on Nature Related Financial Disclosure recommendations build on existing financial reporting standards. As in recent climate risk resolutions, shareholders now have a framework for companies to report on how they track and integrate biodiversity risk into their planning. Shareholders are asking PepsiCo and Home Depot to “complete a material biodiversity dependency and impact assessment and issue a corresponding public report to identify the extent to which the company's supply chains and operations are vulnerable to risks associated with biodiversity loss.”

Drug Patent Extensions

High drug prices are a common complaint in the United States and the federal government now can set prices for a few Medicare drugs, changing the context somewhat. When drug patents expire, generic or biosimilar manufacturers can offer competing medicines at lower prices. Pharmaceutical companies often file new patents, for new indications, yet critics contend this blocks competition and keeps prices high. AbbVie has been under fire for the anti-inflammatory drug Humira, which has seen steep price hikes and many additional patents. Eli Lilly has been pressured about its prices for insulin, which people with diabetes need to live but many cannot afford—though it has moderated prices recently. After engagements, only two of six resolutions filed this year will see votes. Those pending are from faith-based shareholders and ask AbbVie and Eli Lilly to report on the impact of patent exclusivities on access to drugs.

Attack on Shareholder Rights

An unprecedented political attack on shareholder rights continues, with direct challenges to specific proposals and broader legal challenges and proposed legislation that would curtail longstanding practices investors use to engage with the companies they own.

Expert insight from:

Luke Morgan, Attorney, As You Sow
Luke Morgan is an attorney with As You Sow. Prior to that he clerked for the United States District Court and the Second Circuit Court of Appeals and worked in the General Counsel’s office at the North Carolina Department of Justice. He has published multiple law review articles focusing on constitutional doctrine and the First and Second Amendments. 

Expert insight from:

Josh Zinner, Chief Executive Officer, ICCR
Josh Zinner has served as ICCR’s CEO since 2016. He has more than 25 years’ experience as a non-profit leader, coalition-builder and policy advocate. Josh is also a long-time public interest lawyer who has spent his career working to promote social and economic justice and corporate accountability. For eight years prior to coming to ICCR, Josh co-directed the New Economy Project, which works with community groups on economic justice and fights locally and nationally against discriminatory financial practices.

Tim Smith, Senior Policy Advisor, ICCR
Tim Smith currently serves as a senior policy advisor to ICCR. He previously served as ICCR staff for 30 years including 24 years as its Executive Director. In 2000, Tim joined Boston Trust Walden where he led the organization’s shareholder engagement efforts for 22 years. In 2007, 2012 and 2013, Tim was named one of the “Top 100 Most Influential People in Business Ethics” by Ethisphere Institute. In 2010, he received the Bavaria Award for Impact at the third annual Joan Bavaria Awards for Building Sustainability into the Capital Markets. In 2011 and 2012, he was named one of the most influential people in corporate governance by the National Association of Corporate Directors, and in 2016 Tim received ICCR’s Legacy Award for his enduring record of demonstrated influence on corporate policies.  

Expert insight from:

Sanford Lewis, Director and General Counsel of the Shareholder Rights Group
Sanford Lewis leads the Shareholder Rights Group and is an attorney with 35 years of experience in environmental law and policy. His clients include institutional investors, social investment firms and nonprofit organizations. His practice focuses on shareholder proposals, shareholder rights and improving SEC corporate environmental and social policy disclosure requirements. Sanford was co-author of “Fooling Investors and Fooling Themselves: How Aggressive Corporate Accounting and Asset Management Tactics Can Lead to Environmental Accounting Fraud.”

 

Reminder: The VOTING DEADLINE for all U.S. companies is midnight Eastern Time on the DAY BEFORE the AGM.
Look for our Proxy Vote Alerts every week. Have a great proxy season!