It’s Earth Month, a time of year when many of us think even more about reducing emissions and pollution, cherishing beautiful places, and taking action to make our communities more healthy and vibrant.
April also marks the start of Annual General Meetings (AGM) season, when many of the world’s largest companies face votes from shareholders on their board of directors, concerns about sustainability, and other important issues. That’s why, in addition to Earth Month activities, we’re focused on strengthening shareholders’ voting practices to hold corporate polluters accountable and protect workers’ savings for the long-term.
How shareholders choose to vote can have huge impacts on how companies behave. Investor support for climate action is instrumental in determining if we achieve our global climate goals and a just transition to clean energy — or face ever-growing climate disasters, environmental injustices, and a diminished economy.
In his seminal book Rules for Radicals, Saul Alinksy promoted the idea of “tactic proxy”: organizing community members to leverage their shares to attend, speak up, and vote on key concerns at a company’s annual meeting. When Alinksy wrote about “tactic proxy” in 1971, a large portion of most publicly traded companies’ shares were held directly by individuals. That meant everyday people could have a more direct say in corporate practices, but voting power was more diffuse and difficult to leverage. In the decades since the investment landscape has undergone a massive transformation.
Today, corporate shares are largely concentrated in the hands of institutional investors, such as pension funds and asset managers, like BlackRock and Vanguard. Those shares are still ultimately owned by and managed for institutions’ clients and beneficiaries. But these institutions are usually given the “proxy” power to vote and engage with companies as they see fit. This means that the people running pension funds and asset management firms, not the individuals whose retirement savings they’re managing, are often who determine the outcomes of shareholder elections and influence corporate practices.
That’s why the millions of people who have their savings managed by institutional investors — and all of us who live in the world that they shape — must demand they use that proxy voting power to address the climate crisis and other sustainability risks that will make our future less safe, stable, and prosperous.
The Sierra Club, and our millions of members and supporters, have participated in shareholder advocacy for decades to elevate community and environmental risk concerns with investors. In recent years, we’ve particularly focused on shareholder efforts to move major financial firms, like the biggest Wall Street banks that fund the expansion of fossil fuels, to be more transparent about their climate risks and to stop their destructive activities.
Read more about the role of state pension funds’ shareholder votes here.
This month, the Sierra Club and partners delivered thousands of signatures to public pension funds across the country, asking them to support a slate of key climate votes this AGM season. Public pensions collectively manage trillions of dollars in retirement savings belonging to public school teachers, firefighters, and other public employees. Pension funds have a critical responsibility to vote the right way on climate and other sustainability issues, and support a thriving economy for decades to come.
There are many important votes coming up at companies that are critical to accelerating climate progress. The Sierra Club and partners are urging pension funds, asset managers, and other shareholders to support the following votes across these key themes this AGM season:
Investors are holding corporate directors accountable at key companies for failing to guide their companies towards a clean energy economy. Recommendations include voting against the entire board at ExxonMobil, ConocoPhillips, and Occidental Petroleum, and voting against targeted directors at additional oil and gas companies, utilities, and financial institutions that have failed to adopt 1.5 degree aligned business plans.
There are several resolutions this year that call on companies to address business risks related to inequity and human rights. The Sierra Club Foundation filed a new resolution at Goldman Sachs requesting the bank to assess the environmental justice impacts of its energy and power sector financing. Other resolutions ask JPMorgan Chase, Citigroup, Wells Fargo, and Travelers to assess their policies on Indigenous people’s Free, Prior, and Informed Consent (FPIC).
Many major asset managers not only vote at companies in their portfolios on behalf of clients, they are also publicly traded companies that have their own shareholders. Investors are asking asset managers to review and disclose their proxy voting practices as they relate to climate, diversity, systemic risk, and/or client preferences. Key resolutions on these issues can be found at BlackRock, Citigroup, State Street, JPMorgan, and Goldman Sachs this year.
Shareholders have filed various resolutions asking companies to disclose their greenhouse gas emissions, the ratio of clean energy to fossil fuel financing, and the emissions associated with underwriting at major banks and insurance companies. These disclosures are critical for understanding the credibility of banks’ and insurance companies’ climate plans. Such resolutions were filed at Citigroup, Goldman Sachs, Wells Fargo, JPMorgan Chase, Morgan Stanley, Chubb, and Travelers.
Investors continue this year to request high-emitting companies like utilities set medium or long-term emissions reduction targets and adopt credible transition plans. Critical resolutions will be voted on at insurance and utility companies, including AIG, DTE Energy, Southern Company, Berkshire Hathaway, and CenterPoint Energy.
Companies have a major influence on climate policy through their lobbying activities. Disclosure of companies’ lobbying remains a priority for investors, with resolutions being voted on at Edison International, American Express, Capital One, Morgan Stanley, Goldman Sachs, Wells Fargo, Bank of New York Mellon, and Bank of America. We’ll be watching closely how shareholders vote on these critical issues throughout the AGM season. Stay tuned for updates from the Fossil-Free Finance campaign to share with your networks. |