With the 2024-2025 proxy season underway, we are in the midst of decision making by companies with whom we’ve filed shareholder resolutions. Some engagements have already resulted in agreements for the withdrawal of our resolutions, while other resolutions are on course to be included in company proxies, to be voted on by fellow shareholders at 2025 annual meetings. This proxy season we have thus far engaged 57 companies, filing a total of 18 proposals, 10 as lead filer.
Environmental Engagements
We continue to engage companies on important environmental issues, including climate transition planning and emissions targets, climate finance, climate lobbying, and just transition. This proxy season we’ve filed a resolution at Truist Financial Corporation asking the company to set interim sectoral targets for its financed emissions, specifically those related to the bank’s highest emitting sectors. Financing high-emitting activities poses systemic risks to the global economy and risks to banks’ own operations. Research has also shown that reported financed emissions are on average over 750 times larger than reported operational emissions for financial institutions, meaning that any targets set without considering financed emissions are not meaningful. Several banks have already disclosed their financed emissions and set the interim targets we are seeking from Truist to better understand their approach to decarbonization.
We have also co-filed a proposal at the Bank of Montreal (BMO) seeking disclosure of the bank’s climate lobbying, as BMO itself has noted that it needs legislative support to reach its climate goals. We continue to engage Eversource on its efforts to support a just transition, taking into consideration impacts on community members and workers.
Human Rights Engagements
We are part of a number of human rights-related engagements, and have co-filed proposals on issues including the development of human rights policies, AI governance, and freedom of association. We continue to lead engagements with tech companies including semiconductor manufacturer Texas Instruments (TI). Following the Russian invasion of Ukraine. US-made semiconductor chips continue to be found in Russian weapons systems recovered from the battlefield. For multiple years we’ve engaged Texas Instruments to request the company conduct a third-party human rights and “know your customer” due diligence assessment, which would help ensure the company has the proper policies and practices in place to better interrupt the flow of its products to the Russian military. After meeting with the company several times during this engagement, we have finally reached a withdrawal agreement in which Texas Instruments has agreed to develop a global human rights policy as well as enhance disclosures on its due diligence processes.
Working with the ICCR health equity team, we have also led a resolution asking for the pharmaceutical company AbbVie to conduct a human rights impact assessment. The pharmaceutical sector lags other sectors in the assessment and disclosure of human rights due diligence processes. A human rights impact assessment would allow AbbVie to identify the company’s actual or potential adverse human rights impacts, particularly downstream impacts on stakeholder access to affordable medicines. By identifying these adverse impacts, pharma companies can both enhance their due diligence and integrate findings and considerations into their operations and decision-making around patents and pricing. This engagement is currently ongoing as we try to work towards an agreement with the company.
Diversity, Equity and Inclusion
This proxy season we also filed proposals at five companies requesting disclosure of their EEO-1 workforce diversity reporting, as well as increased disclosures on hiring, retention, and promotion data broken out by gender and race/ethnicity. EEO-1 reports are useful in providing a snapshot of a company’s current workforce diversity, while hiring, retention and promotion data provide greater quantitative information to investors to better understand the effectiveness of company human capital management and impacts over time.
Through our diversity work we have also identified two companies Friends Fiduciary holds that do not have at least one person of color on their boards. We were only able to file a resolution at one of the companies due to the length of time we’ve held shares. Our resolution asks for the establishment of an inclusive board refreshment policy to increase the likelihood of a diverse hire to the company’s board.
Governance
In addition to our board diversity and governance-related proposals, we have lead filed a proposal at State Street Corporation asking for a separate and independent Chair of the Board of Directors. The current Chair position is held by State Street’s CEO, raising concerns of potential conflicts of interest since the board’s role is to oversee management and the CEO. Like many other investors, Friends Fiduciary believes having a separate and independent Chair is simply a good governance best practice.
Closing
As always, we witness to Quaker values through our active shareholder engagement not only to inspire positive change in the companies we own, but because we believe this witness will support long-term shareholder value in our investments.