February 07, 2013
ICCR Publishes 2013 Proxy Resolutions and Voting Guide
by Robert Kropp
The Interfaith Center on Corporate Responsibility reports that its members have filed 180
shareowner resolutions and engaged in 225 corporate dialogues this proxy season.
Last year's Proxy Resolutions and Voting Guide from the Interfaith Center on Corporate Responsibility (ICCR) represented a
significant milestone in the history of corporate engagement by sustainable investors. For the
first time, ICCR members—who had, in years past, filed as many as 650 shareowner resolutions in a
single proxy season—engaged in more corporate dialogues than the number of resolutions filed; at
the time of the Guide's publication, members had filed 160 resolutions and engaged in 170
"The business case for sustainability has become more specific," ICCR Executive
Director Laura Berry explained last year. "It's become more useful for companies, and they're
starting to get the point. It no longer requires a belief system, because it's become meaningful
for companies' business practices."
ICCR recently published its 2013 Proxy
Resolutions and Voting Guide, which indicates that the organization's emphasis on corporate
dialogue continues to evolve. Again, ICCR members report more dialogues than resolutions: 225 of
the former, and 180 of the latter. "Corporate dialogues…are generally confidential and based on a
mutual trust that is frequently the result of decades-long relationships and a shared commitment to
sustainable operations and good performance," the Guide states.
Which is not to report
that the more confrontational practice of submitting shareowner resolutions is going away anytime
soon. The inadequate global response to climate change, unsustainable overconsumption, and
persistent wealth inequality all portray a world in danger of hurtling into crisis, and
corporations are complicit in many of the causes. And while many corporations have improved their
environmental, social, and corporate governance (ESG) performance—thanks in large part to the
efforts of ICCR and other sustainable investment organizations—the stakes must continuously be
raised. Publishing a sustainability report, for instance, is a laudable first step; but it is only
a first step on a long path to genuinely sustainable performance.
And so the task of
filing shareowner resolutions continues. It can be a challenging task, requiring considerable time
and expense as well as the formation of coalitions to meet Securities and Exchange Commission (SEC)
requirements for filing.
The Guide states, "While some resolutions represent ongoing
requests to management, often re-filed over several years with increasing shareholder support,
others are a direct response to a company's 'irresponsibility' on a specific issue, or other
Much of the slight increase in the number of resolutions files thus far
this year—ICCR points out that the resolutions included in the Guide were filed before January
10th, and that the texts of resolutions filed afterward can be found on its website—can be
attributed to last year's Presidential election, the most expensive in the nation's history. ICCR
members have filed 52 resolutions addressing corporate political spending and lobbying
expenditures. "In a system where one person, one vote is the supposed rule, American corporations
are granted undue influence over our legislative process by virtue of their financial weight and,
in the wake of the Citizen United ruling, this balance of power has tilted even further in favor of
corporations," the Guide states.
Resolutions addressing political spending, lobbying
expenditures, and payments to trade associations were filed by ICCR members with many of the
nation's largest corporations. At the time of the Guide's publication, very few had been withdrawn
due to successful engagement. A resolution addressing lobbying expenditures by AT&T, for example,
was withdrawn by its filer, the Needmor Fund; however, a resolution on the telecommunications
giant's political spending remains of this year's proxy ballot.
Chevron is another
corporation facing separate shareowner resolutions on political spending and lobbying expenditures.
The quality of the oil and gas company's corporate governance can be further discerned by the fact
that a total of nine resolutions have been filed with it this season. One resolution, filed by the
Needmor Fund and Zevin Asset Management,
requests that Chevron report on the rationale behind the subpoenas filed by the company's lawyers
targeting its own shareowners. The subpoenas were issued to "investors whose only 'sin' was
challenging the company regarding its environmental damages in the Ecuadorian Amazon rainforest and
the impact on investors of the $18 billion legal action against Chevron," Daniel Stranahan, Chair
of the Finance Committee of the Needmor Fund, said.
"We believe this is an unprecedented
intrusion into investor communications related to an issue that has a distinct and negative impact
on shareholder value," the resolution states. "This is seen by many investors as an unwarranted and
irresponsible attack on private investor communications and if successful would establish a
horrendous precedent opening the door for companies to sue investors who disagreed with them."
Chevron has requested that the SEC to disallow the resolution from the proxy statement. In a letter to the SEC, Timothy Smith of Walden Asset Management and Sonia Kowal of Zevin urged
the Commission to deny Chevron's request.
"We believe strongly that investors have the
right to convene meetings to share ideas and strategies, discuss corporate performance, and,
ultimately, to join together to challenge a company if they believe its governance or environmental
record raises significant questions about its long-term prospects," the letter states. "Granting
Chevron its No Action request could be seen as opening a door to a potential flood of subpoenas by
companies that disagree strongly with collaborative investor engagement on topics they oppose."
Chevron also faces a resolution requesting that it report on the management of risks
associated with the controversial practice of hydraulic fracturing. Three other oil gas companies
face resolutions addressing fugitive methane emissions from natural gas development, and
shareowners have requested that Continental Resources reduce natural gas flaring in its operations
in North Dakota. In all, ICCR members filed 36 environmental health resolutions on a range of
Members also filed 14 human rights resolutions, five of which ask companies to
develop human rights policies that align with the Guiding Principles on Business and Human Rights.