Shareholders Overwhelming Support FFC Proposal with Norfolk SouthernMay 21, 2021
Friends Fiduciary Corporation’s (“FFC”) shareholder proposal filed with Norfolk Southern Corporation (“NSC”) received an eye-popping vote percentage in support of FFC’s request for a report on if and how the company’s lobbying activities (direct and through trade associations) align with the goals of the Paris Climate Agreement.
At NSC’s May 13th Annual Shareholders Meeting, FFC’s proposal received approval from 76.4% of the votes cast. This FOR vote resulted in the proposal overwhelmingly passing and indicates significant investor concern for NSC’s current lack of accountability in its lobbying activities. The results were released by NSC on May 14th.
FFC’s proposal was part of a broader investor effort with the Interfaith Center on Corporate Responsibility’s Climate Lobbying Initiative. In their letter to NSC shareholders in support of the proposal Friends Fiduciary made the business case that climate change and the result extreme weather events pose materials risks to NSC’s infrastructure and operations as well as that of their clients. The proposal identified that NSC’s direct and indirect lobbying, through trade or other associations, has not satisfactorily demonstrated to stakeholders that it supports the Paris Agreement despite the risk climate change poses to the company. FFC also pointed to lack of clarity around board oversight to ensure accountability on lobbying misalignments.
Friends Fiduciary pointed to Norfolk Southern’s membership in organizations that have lobbied against Paris-aligned climate policy and which have worked to discredit or deny climate science and stated that this remains of great concern for shareholders. This includes membership in the Association of American Railroads, America’s Power, and the National Association of Manufacturers. FFC was clear that it is not NSC’s spending of corporate funds for lobbying, but the lack of disclosure and transparency about its climate-related policy activities, and that of its trade and other association memberships, that raises alarm for shareholders about possible risk to company reputation.
In speaking about the vote results, Jeff Perkins, Executive Director of Friends Fiduciary noted:
“The vote outcome for FFC’s proposal indicates strong institutional shareholder support and demonstrates shareholder concern for lobbying misalignment with stated company positions on sustainability and climate risk. Such a high percentage vote has set a precedent and shows companies that the systemic and material risk of climate change remains at the forefront of shareholder concerns.”