Getting the messages through: Danielle Fugere of As You Sow on ESG investor proposals

Jun 16, 2022
Danielle Fugere, president and chief counsel of shareholder advocacy group As You Sow, talks about a record year for ESG investor proposals and trends in engagement with companies

What have been some of As You Sow’s priorities for the 2022 proxy season?

We continue to work on climate [change] as one of the most important issues facing investors and people generally. We are focusing on ocean plastics and petrochemical risk – those two go together in the sense that oil and gas companies are becoming more reliant on producing plastics as the world transitions away from fossil fuels at the same time as the world moves away from single-use plastics.

We are also working on diversity and social justice. We’re looking to companies not just to say they are doing these things [to improve diversity and social justice] but also to demonstrate how they are doing that and how successful their programs are, if they already have them.


Danielle Fugere,
As You Sow

Overall, it’s been a record year in terms of the number of ESG-related shareholder proposals filed. Is it also a record year for As You Sow?

Yes. We are filing more proposals this year because we have added a team to work on our say-on-climate initiative. It’s in the same vein as what is happening with say on climate in Europe, but it’s focused differently here. In the US we are asking companies to set net-zero targets in line with the [Climate Action 100+] benchmark and to set interim targets to measure and disclose their emissions – essentially, to get on with the task of reducing their climate impact and creating plans and targets.

We did a few of those proposals last year but many more this year, and it’s been quite a successful initiative. When we speak with companies, for the most part they have been looking at what they’re going to do on climate and in many cases the companies have said that… our knocking on the door made it occur more quickly. So far, the majority of those companies have agreed to set targets but it depends where they’re at.

Last year saw the emergence of several shareholder proposals asking companies to conduct racial equity audits. Has that influenced your work on diversity, equity and inclusion (DE&I) matters?

The focus on social justice was prompted by what had happened here in the US – the killing of George Floyd and the big protest movement that followed – and many groups were focusing on those issues. We did some social justice work last year and have continued that work.

We’ve had a social justice scorecard for the past two or three years. We continue to work with companies, especially those that say they have social justice programs to ensure that they actually do, as well as with laggard companies that are not working yet to promote social justice and DE&I within their organization.

A big potential change for this proxy season was the SEC’s guidance in late 2021 about how it decides whether to grant companies relief to exclude shareholder proposals. The expectation was that its revised approach would lead to more ESG proposals ending up going to votes at AGMs. Is that what you’ve seen so far?

Yes, it has had an impact. What the SEC’s division of corporation finance did was in essence move back to rule interpretations that had been in place before the Trump administration. What we saw with guidance under the Trump administration was a dramatic narrowing of the ability to bring shareholder proposals because they were found to be ‘substantially implemented’ if you were too broad in your description of the issue. Then if you tightened up the description you found yourself in ‘micro-management’ territory.

There was almost no way to craft a proposal that wouldn’t get caught on one or the other of those shoals. The new guidance took us back to a reasonable approach to shareholder proposals and allowed us to continue to raise important issues with companies – as we should be able to and as had always been the case.

This is an extract of a feature from the summer 2022 issue of IR Magazine. Click here to read the full article.

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