Expect more shareholder votes on abortion access

Several resolutions were brought this year at Walmart, TJX and Lowe's

The US Supreme Court’s decision to overturn Roe v. Wade will almost certainly lead to more pressure on corporations to provide access to reproductive health care, sources tell ESG Clarity.

That could mean a cascade of shareholder engagement and proxy votes next year focused on policies that help employees obtain access to abortions and aligning political spending with company’s public stances on social issues.

“It seems very likely that there will be more shareholder proposals on both political spending and also health care risk issues,” Heidi Welsh, executive director of the Sustainable Investments Institute, said in an email. “I expect this may explode next year.”

On Friday, the nation’s highest court published its opinion on Roe v. Wade, overturning more than half a century of precedent that gave American women the right to have abortions.

Although that decision was leaked to Politico more than a month earlier, the reality of the court’s final opinion shook the country, leaving reproductive rights advocates unsure about what will come next. With access to abortion now to be decided by individual states, roughly half are expected to enact bans.

Many are also worried about what the high court could do next. In his concurring opinion, Justice Clarence Thomas suggested that it revisit cases whose rulings established gay rights and access to contraception. That development gives shareholders more urgency to push for political-contribution resolutions that would require public companies to report their spending, including to trade or lobbying groups that work directly against the same causes that companies claim to support.

This year, shareholders pursued resolutions related to abortion at Walmart, Lowe’s and TJX, none of which received majority support. The Walmart proposal, filed by Clean Yield Asset Management, had about 13% of voting shares in its favor at the meeting in early June. That resolution asked the company to produce a report about the impacts it would face amid changes in reproductive health care legislation.

“Today’s news is not surprising, though extremely disappointing. We believe that the overturning of Roe v. Wade increases the urgency for corporations to ensure continued access to comprehensive reproductive healthcare for employees,” Clean Yield said in a statement to ESG Clarity.

“The corporate conversation must shift from how corporations might ensure access to reproductive care in a post-Roe environment to how companies are (or are not) providing access.”

There will likely be more shareholder proposals on that topic in the next proxy season, the company noted.

“We will continue to use shareholder advocacy to press companies to ensure access to reproductive healthcare because the human capital risks are, in our view, just too high,” Clean Yield said.

“We are currently working on our advocacy plans for the coming year and expect that we will see more proposals on topics related to reproductive healthcare access going forward as today’s news significantly elevates the human capital management risks faced by corporations.”

Clean Yield also filed a resolution at Cigna, pressing the company to produce an annual report that would analyze its political and lobbying spending in comparison to its publicly-stated values. At the company’s April meeting, that proposal received about 41% support from voting shares.

“In the political spending front, shareholder proposals already have shifted this year to more scrutiny of misalignment between company policies and the objectives of politicians they support,” Welsh said.

The proposal at TJX asking the company to assess its risks related to restrictions on reproductive rights saw 32% of votes in favor at the June 7 meeting. That resolution was filed by Trillium Asset Management. The proposal filed at Lowe’s similarly saw 30% of votes in favor.

“Elections have consequences,” As You Sow CEO Andy Behar said. Many public companies have likely been waiting to see what the Supreme Court did before instituting policies to support workers in abortion-ban states traveling for care to states that allow access, he said.

A company based in New York state with workers in other states, such as Texas, “would give them paid leave and transport them to a state where they can have the procedure,” he said. That idea is based on providing equal access to health benefits, something viewed as necessary for ensuring businesses have a strong workforce, he said.

“That’s really how the companies are working with this,” Behar said. “They want to continue to attract the best and the brightest employees.”