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February 09, 2015
ICCR Publishes 2015 Proxy Resolutions and Voting Guide
    by Robert Kropp

Climate change and wealth inequality lead members of the the Interfaith Center on Corporate Responsibility to increase for the third year in a row the number of shareowner resolutions filed. Second of a two-part series.


In its introduction to the recently published 2015 Proxy Resolutions and Voting Guide, the Interfaith Center on Corporate Responsibility (ICCR) states, “The number of filings for any given year can be an important indicator of the level of corporate resistance to, or acceptance of, the changes beings sought by ICCR members; fewer resolutions may mean that real progress is being made in dialogues obviating the need for the broader involvement of other investors via the proxy statement.”

In 2015, the “changes beings sought by ICCR members” primarily address two issues that threaten to become full-blown crises imminently, if they do not do so already: climate change and wealth inequality. This year, ICCR members have filed 227 shareowner resolution thus far, a number up sharply from the 193 filed by the time the 2014 Guide was published; in 2013, the number was 180.

Almost one-third of the resolutions filed this year by ICCR members address climate change. “What this underscores is the priority climate change has become for our community due to the urgency of the climate change crisis,” the Guide states. In keeping with current awareness of the concept of stranded assets, major oil companies like BP face resolutions requesting that they assess portfolio resistance “to post-2035 scenarios”; in other words, how do oil majors respond when a meaningful regulatory regime addressing climate change is finally put in place?

At ConocoPhillips, shareowners seek to embed long-term environmental considerations into the compensation awarded to the company's top executives. “We believe that incentive compensation metrics should promote the creation of sustainable value,” the resolution states. “We are concerned that basing senior executive incentive compensation on reserves may encourage the addition of reserves that are so costly to access that projects may be canceled if prices fall.” The resolution further points out that ConocoPhillips itself is aware of this risk; “significant future price changes could have a material effect on the quantity and present value of our proved reserves,” the company has stated.

But climate change is not the only crisis threatening the sustainability of the social order. In fact, ever-increasing wealth inequality might well rouse to action the 99% of earth's inhabitants excluded from prosperity first. (Although, in a world of increasing resource scarcity, differences between crises do seem to narrow.) It may seem a dicey proposition for capitalists (i.e., investors) to take on wealth inequality from within the capital market; but sustainable investors such as those affiliated with ICCR have been doing so for decades. While they can't persuade obscenely overpaid corporate executives to share their ATM passwords, they can and do address the systemic conditions that allow inequality to flourish.

One way of allowing inequality to flourish is by pouring money into the political system, and ICCR members have filed a record 54 resolutions requesting transparency in corporate political contributions and lobbying expenditures. “ICCR is concerned that political expenditures may be diverted to groups advancing agendas contrary to the stated missions of companies on environmental, social and governance matters, posing potential conflicts of interest and exposing companies to unnecessary reputational risk,” the Guide states.

Most of the companies targeted by ICCR resolutions this year spend heavily on lobbying activities and do not disclose their expenditures; in addition, their payments to controversial industry trade associations remain undisclosed as well. While the connection between wealth inequality and corporate political expenditures may seem indirect, the implication is clear: there are elements of some national governments that are effectively for sale to the highest bidder. If such transactions must go on, then transparency is the least that investors and the greater society should expect.

ICCR members also filed 12 shareowner resolutions addressing increasing pay disparities between senior executives and the corporate rank and file.

Ever since its origins in the 1970s, ICCR has been at the forefront of such human rights issues as inclusiveness and human trafficking. Its members continue to file numerous resolutions addressing these and other human rights issues; corporate boardrooms ignore the organization's well-earned reputation at their own peril.

The Guide, which is over 200 pages in length, can be downloaded for free from ICCR's website. I recommend that you download it and read it. Then vote your proxies.

 

 
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