Winter’s chill lingers in many parts of the U.S., but spring’s right around the corner. That means proxy season is about to heat up, and many shareholder activists are announcing their intentions to put important proposals up for shareholder votes at well-known companies.
Votes against environmental degradation
Climate change hasn’t gotten far in policy making, but many huge companies see the writing on the wall and are taking action on their own. Recent findings from Ceres, Calvert Investments, and World Wildlife Federation showed that 60% of Fortune 100 and Global 100 companies have crafted renewable energy and/or greenhouse gas reduction goals.
Given the risks of climate change going forward, investors should be aware of whether their companies are behind the times on working on their carbon footprints and pushing their energy use into cleaner methods.
That’s why activists like CalSTRS, Calvert Investments, and Green Century Capital Management have filed climate-change-related resolutions at 13 companies including Electronic Arts Inc. (NASDAQ:EA), Equity Residential (NYSE:EQR), and Roper Industries, Inc. (NYSE:ROP).
Activists’ efforts have already panned out; resolutions have been dropped at International Business Machines Corp. (NYSE:IBM) and Public Storage (NYSE:PSA) because both agreed to increase their disclosure of clean energy performance. Granted, this may represent little skin off IBM’s metaphorical nose, given its No. 1 ranking on Newsweek‘s top green companies list released late last year.
This is just the tip of the iceberg when it comes to shareholder resolutions for investors to vote on. Ceres has announced that affiliated investors have filed 91 resolutions with 78 companies for the 2013 proxy season so far, all focused on climate and sustainability risks.
Votes against corporate imperialism
The problems in the financial industry continue, not least of which is “too big to fail,” which not only hasn’t been resolved but has also become worse. Many of us would say business as usual just isn’t good.
The AFSCME Employees Pension Plan has filed a variety of shareholder resolutions targeting “Too Big to Fail and Imperial CEOs.” It’s got 25 shareholder proposals submitted for shareholders to ponder at annual meetings this spring. Most seek to increase accountability and transparency at major firms, and run the gamut from corporate governance issues like separating the CEO and board chairman positions to major political issues like corporate lobbying.
Bank of America Corp (NYSE:BAC) is on the list, and subject to current news this week that’s of importance to corporate-governance-minded shareholders. CEO Brian Moynihan received a 73% pay increase last year in the form of stock grants worth $12 million. Meanwhile, rumor has it that the financial giant will increase Moynihan’s base salary in 2013 . Maybe Moynihan deserves some credit for some better performance at the banking company, but given financials’ risks, the longer-term performance may still be in question.
AFSCME is asking giant banks like Bank of America, Citigroup Inc. (NYSE:C), and Morgan Stanley (NYSE:MS) to perform reviews related to strategic options. Bank of America’s board may think Moynihan’s a valuable commodity, but apparently AFSCME doesn’t see investments in some in its industry as all that valuable to its investors after all.
Corporate lobbying continues to be an outrageous concern for shareholders and the public at large, particularly after the Supreme Court’s Citizens United ruling. AFSCME has filed proposals demanding disclosure of direct and indirect lobbying at five companies. These include Chevron Corporation (NYSE:CVX), which last year gained the dubious distinction of having made the largest corporate donation to a Super PAC in history: $2.5 million.
Votes for positive change and sustainable returns
Investors who shrug off proposals they have the power to vote on are missing the big picture. For example, the repercussions from climate change could devastate businesses (and, obviously, investment returns).
Rethinking renewable energy and waste helps companies save money and become more profitable over the long haul. That’s capitalism’s innovative spirit and efficiency at work, after all.
Meanwhile, corporate governance problems add up to big risks for shareholders, and political expenditures by public companies not only siphon money from shareholders, but also may lean completely opposite from many shareholders’ own political beliefs.
Given the fact that most Americans actually do own stocks, even passively through mutual funds, issues like these actually do impact just about all of us.
So let’s use our shareholder votes for positive change and positive returns over the long haul. More and more shareholder activists are filing proposals that deserve our full attention when it comes to risk versus reward.
Check back at Fool.com for more of Alyce Lomax’s columns on environmental, social, and governance issues.
The article Rally for Positive Change and Positive Returns originally appeared on Fool.com and is written by Alyce Lomax.
Alyce Lomax has no position in any stocks mentioned. The Motley Fool recommends Chevron. The Motley Fool owns shares of Bank of America, Citigroup Inc , and International Business Machines (NYSE:IBM)..
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