DuPont Investors Pass Pollution & Diversity Proposals (Newsletter 5/7)

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Proxy Season Briefing

BlackRock Votes, Yet More to Come

BlackRock has supported 12 of the 16 E&S proposals thus far this proxy season, with a slew of votes left to cast. For details on the institution’s Q1 voting, see the Q1 Stewardship Report.

According to Proxy Insight, in April BlackRock also supported a civil rights audit report at Johnson & Johnson, which received 34% support, and voted to approve Moody’s decarbonization plan, recommended by management.

BlackRock and Vanguard voted in support of Tyson Foods creating a human rights report. In BlackRock’s rationale, the institution noted the food processing company had a similar shareholder proposal the previous year, which received 15% support, and then did not make sufficient improvements in disclosures. BlackRock also voted in favor of the company to report on lobbying payments and policy. Both proposals received about 18% shareholder support. (Proxy Insight)

Shareholders Turn on Dupont’s Pollution and Diversity Disclosures

As You Sow’s request for DuPont to report on the amount of plastic that annually ends up in the environment received 81% of votes. The resolution also encouraged Dupont to assess the effectiveness of its actions and policies in reducing the volume of plastic materials polluting the environment. The New York City Teachers Retirement System received 84% of votes for its proposal asking for the adoption of a policy to annually disclose EE0-1 data. Dupont’s current workforce demographics can be found in the company’s GRI Index 2020 (pg. 44). Management recommended investors vote against both proposals.

GE’s Investors Want Net Zero by 2050 and Reject Hefty Pay Package

General Electric shareholders passed the resolution seeking details on how the company plans to achieve net zero greenhouse gas emissions by 2050. Last year, GE committed to achieving carbon neutrality for Scope 1 and 2 emissions for its operations and facilities, but investors want more. They are requesting GE report all emissions, including Scope 3, and cover all operations and products.

58% of shareholders rejected the proposed pay package for GE Chairman and CEO Larry Culp, though the vote was non-binding. Culp earned $73 million in 2020, heavily driven by stock awards. Last summer the Board extended Culp’s contract through 2024 and awarded him a special stock grant valued at more than $100 million in December of 2020. ISS and Glass Lewis recommended voting against the pay package and the compensation committee. AT&T received similar results for the vote on its executive compensation plan.

Exxon Mobile Warding 2 Battles

Sierra Club and other activists are urging BlackRock and Vanguard, which hold more than 13% of Exxon Mobile shares combined, to vote against Exxon chief executive Darren Woods and lead independent director Kenneth Frazier. At the same time, activist hedge fund Engine No. 1 is seeking 4 of 12 board seats because it believes Exxon has not invested sufficiently in low carbon energy sources and has a board ill-prepared to deal with the coming energy transition. CalPERS, CalSTRS, and the New York State Common Retirement Fund have announced their support for a new slate of directors, as proposed by Engine No. 1.

Amundi Seeks Details on McDonald’s Antibiotic Use

McDonald’s faces a shareholder proposal from The Shareholder Commons looking for more transparency on the fast-food giant’s supply chain, asking for environmental and public health costs created by the use of antibiotics. Amundi Asset Manager co-filed the proposal.

Company Spotlight

Five Below Publishes ESG Snapshot and Overview

This week, Five Below released an ESG Snapshot, which highlights the commitments and progress the company has made on ESG topics, such as data privacy, vendor requirements, packaging, and board oversight. In conjunction with the one-pager, the retail company also published an ESG Overview, giving a deeper look into its ESG program. The materials summarizing the company’s initiatives are easily accessible from Five Below’s IR website. For a company that has not published a sustainability report, the shorter form content hitting material topics is a smart first step in providing the information sought after by stakeholders.

Investor-Approved Diversity Disclosures

As requirements on diversity disclosure become more standardized, investors want to know how companies are integrating this ESG factor in their strategies. And they are treating a lack of disclosure on gender and ethnic diversity as risk. They want more data on female and visible minorities’ representation on boards, executive teams, and within the workforce. Below are a few examples of companies that have leveraged a variety of workforce data, including the Equal Employment Opportunity Voluntary Self Identification Form, in their diversity reporting.

Colgate-Palmolive Company: Diversity, Equity & Inclusion Results

  • Global Representation by Gender (Overall and Executives)
  • S. Representation by Ethnicity (Overall)
  • S. Representation by Ethnicity (Professionals/Operators; Managers/Individual Contributors; Senior Managers/Directors; Executives)

The Clorox Co.: Integrated Annual Report

  • Gender Diversity (%)
  • Gender Parity at Director Level (%)
  • Employee Breakdown by Ethnicity (US Only)
  • Number of Females on the Board
  • Breakdown of Gender/Level of Associate (Asia, EMEA, Latin America, and US/Canada)

L’Oreal SA: Key Figures

  • Women in Top Management – 2010 v 2019 (Executive Committee; Leadership Positions; Global Brand General Managers)
  • Women Career Development – 2010 v 2019 (Promotions; Training; Expatriates)
  • Gender – % of Total Workforce (2010 v 2019)
  • Gender – % of Managers (2010 v 2019)
  • Gender – % of Board Members (2010 v 2019)
  • Median Gender Salary Gap (France only; 2007 to 2019)
  • Parental Leave in 2020 (France, U.S., UK, and Sweden)
  • Employees with Disabilities (Global and France)
  • Employees with Multicultural Background
  • Social Sourcing (Women and People with Disabilities)
  • People engagement

VF Corporation: Made for Change Report (Sustainability & Responsibility Report)

  • Gender Diversity (%)
  • Gender Parity at Director Level (%)
  • Employee Breakdown by Ethnicity (US Only)
  • Number of Females on the Board
  • Breakdown of Gender/Level of Associate (Asia, EMEA, Latin America, and US/Canada)

For further guidance, continue reading the full article.

Exec Comp Tied to ESG Performance

Trane Technologies announced it will tie executive and senior leader compensation to ESG goals in its plan. Incentive payments can be adjusted 20% up or down by applying one of three ESG factors – Gigaton Challenge (an effort to reduce 1 billion metric tons from customers’ footprint by 2030), Carbon Neutral Operations, and Gender, Racial, and Ethnic Diversity. The company joins the likes of Apple, Chipotle, and Mastercard. 

Whirlpool CEO Video

Whirlpool committed to achieving net zero emissions by 2030, specifically covering its Scope 1 and 2 emissions from operations and facilities. As part of the announcement, the appliance company posted a short, 2-minute video featuring CEO Marc Bitzer describing the plan of action at a high level. The CEO video adds credibility to the goal, showing support from the top of the organization to Whirlpool’s customers, employees, and investors.

News Bites