Investors achieved noteworthy victories during this year’s shareholder proxy season, with a near record 110 shareholder resolutions filed with 94 U.S. companies on corporate sustainability challenges such as climate change, supply chain issues and water-related risks.

Shareholders achieved numerous successes within the energy sector, as described in a previous press release issued two weeks ago. Among resolutions filed with other major U.S. manufacturers, consumer brands and service providers, many investors requested board oversight of corporate sustainability issues and comprehensive disclosure via sustainability reports. Overall, investors withdrew more than 40 of the 110 resolutions after the companies responded affirmatively to their specific requests.

A full listing of Ceres-tracked resolutions, including information on lead filers, votes and complete resolution text, is available at www.ceres.org/investor-network/resolutions. Highlights of the 2013 proxy season include:

• Dunkin Brands, Kroger and Starbucks agreed to source 100 percent certified sustainable palm oil to reduce greenhouse gas (GHG) emissions and protect workers, rainforests and species.
• Home improvement giant Lowe’s as well as oil and gas companies Denbury Resources and Range Resources, and also United Parcel Service (UPS) committed to board oversight of environmental and social matters.
• Bed Bath & Beyond, Best Buy, EMC, Gap, Kohls, Nike, Texas Instruments, Target and Xerox agreed to encourage or require sustainability reporting by their suppliers.
• Coach Inc, Ralph Lauren, Starwood Hotels and Resorts and nine other companies agreed to issue comprehensive sustainability reports.
• Stryker, a large medical equipment manufacturer, agreed to set greenhouse gas reduction goals

“Investors are ever more mindful of escalating environmental and social risks and want answers on how companies are dealing with them,” said Mindy S. Lubber, president of Ceres, which helped coordinate the shareholder filings. “This year’s proxy results showed strong progress on wide-ranging sustainability challenges such as water availability risks, supply chain vulnerabilities and greenhouse gas emissions.”

Filers of the resolutions include some of the nation’s largest public pension funds, such as the California State Teachers Retirement System (CalSTRS) and the New York State and New York City Comptrollers’ Offices; socially responsible investors such as Calvert Investments, Trillium Asset Management and Walden Asset Management; and religious, labor and other institutional investors, who collectively manage more than $500 billion in assets.

A recent analysis by Ernst & Young shows that environmental and social shareholder proposals account for about 40 percent of all resolutions filed with U.S. companies. Just three years ago, environmental and social resolutions made up only 30 percent of proposals.

During the 2013 season, Ceres-tracked resolutions achieved results in several key areas:

Responsible Sourcing: Palm Oil and GHGs

In 2013, investors continued to focus attention on a rapidly growing source of greenhouse gas emissions – palm oil – that is used in about 50 percent of all packaged food products in supermarkets today. Oil palm trees are cultivated primarily on plantations in Indonesia and Malaysia, as well as other countries with tropical forests, by clear-cutting and burning carbon-storing rainforest and peat lands. According to the World Wildlife Foundation (WWF), palm oil accounted for 65 percent of produced and traded vegetable oils globally by 2006. As this statistic continues to rise, palm oil cultivation results in significant emissions of greenhouse gases and endangers rare species such as orangutans.

After filing a shareholder resolution, the New York State Comptroller’s Office successfully negotiated a commitment by Dunkin Brands to source 100 percent certified sustainable palm oil for its products. In addition, Kroger (among the top five largest grocery chains in the U.S.) committed to purchase 100 percent of palm oil from suppliers certified by the Roundtable on Sustainable Palm Oil (RSPO) by 2015, for use in company-owned brands. Starbuck’s made a similar commitment earlier this year. These resolutions were filed separately by the New York State Comptroller’s Office, the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen SD and Green Century Capital Management.

Sustainable Supply Chains

Against the backdrop of a disastrous fire and building collapse in Bangladesh, which claimed the lives of more than 1,200 workers, New York City Comptroller John C. Liu’s Office moved The Gap, Nike and Target to commit to make their supply chain more sustainable by working with key suppliers to issue sustainability reports, including worker safety issues. Technology giants EMC and Texas Instruments made similar commitments in response to resolutions by Liu's office. Kohl's also made a commitment on this topic to the Laborer's International Union of North America (LIUNA), as did Bed Bath & Beyond, Best Buy and Xerox in response to resolutions filed by the New York State Comptroller's Office.

“We’re encouraged that more companies agreed to increase the sustainability and transparency of their suppliers as we expanded our efforts beyond the technology sector to include major retailers,” Comptroller John C. Liu said. “The risk they face from suppliers’ human and worker rights abuses was made clear by the tragedies in Bangladesh. More needs to be done, particularly in Bangladesh, but sustainability reporting is an important component.”

Corporate Sustainability Reporting

Companies in numerous sectors agreed to issue comprehensive sustainability reports in response to resolutions tracked by Ceres (lead filers are listed in parenthesis): Cameron International (Calvert), Coach, Inc. (Unitarian Universalist Association), Coherent (Walden Asset Management), Cousins Properties Incorporated (Laborer’s International Union North America), Lifepoint Hospitals (Calvert), Molycorp (Mercy Investment Services), Ralph Lauren (New York State Comptroller’s Office), SL Green (NY City Comptroller’s Office), Starwood Hotels and Resorts (Trillium Asset Management), Kimco Realty (NYC), Roper Industries (Presbyterian Church USA), Wabtec (Walden). In addition to company-wide reviews of policies, governance structures, and goals related to ESG performance, several of these resolutions request information on how companies are mitigating the risks of water scarcity and/or water pollution.

A record-breaking 67 percent of shareholders voted for a sustainability report request filed by the Presbyterian Church USA with CF Industries, a major fertilizer manufacturer. This industry suffered a recent calamity when a nitrogen fertilizer plant exploded in Texas in April, killing at least 15 people and causing as much as $100 million in damage to a small town. CF itself made news in June when an explosion killed one person and injured others at its fertilizer plant in Louisiana.

Board Oversight of Environmental and Social Matters

Calvert Investments secured agreements for board oversight of environmental and social matters from Lowe’s, Denbury Resources, Range Resources and United Parcel Service (UPS).

Greenhouse Gas Reduction Goals

Walden withdrew its shareholder resolution from Stryker after an agreement by the company to gather data on its greenhouse gas emissions and begin setting goals to reduce them.

“We believe it is critical for all companies to be able to measure and manage their Greenhouse Gas emissions by setting specific reduction goals and a clear plan to meet them,” said Timothy Smith, Senior Vice President and Director of Environmental Social and Governance Shareowner Engagement at Walden Asset Management.

This is the second press release in a series of two covering the 110 resolutions. Further detail on the subset of resolutions focusing on the energy sector can be found at: www.ceres.org/press/press-releases/110-shareholder-resolutions-related-to-climate-change-and-fossil-fuel-use-yield-strong-results-during-2013-proxy-season.

About Ceres
Ceres is a nonprofit organization mobilizing business and investor leadership on climate change, water risks and other sustainability challenges. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $11 trillion. For more information, visit www.ceres.org.

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Our Mission: Ceres is transforming the economy to build a just and sustainable future for people and the planet. 

Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies, and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews. 

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