Investors approve ESG proposals at Lowe’s, Twitter, Travelers

The busiest week of the biggest proxy season ever saw several initiatives pass

A handful of ESG-themed shareholder proposals passed with majority approval recently at companies such as Lowe’s, Twitter and Travelers, in one of the busiest periods of a landmark proxy season.

Overall, most votes did not go in favor of the proposals submitted by shareholders, but there have been many more appearing on ballots than ever before.

In prior years, it was all but unheard of for shareholder resolutions to pass, especially those with ESG themes, although minority votes with considerable support are sometimes still seen as a message from investors that management should take note of. That makes the results seen during the current proxy season particularly significant.

Lowe’s, for one example, saw its shareholders approve a measure brought by Arjuna Capital calling for the company to report median and adjusted pay gaps by gender and race. Disney investors approved a similar measure in March.

“Investors expect a new standard of accountability on racial and gender pay equity and today Lowe’s board heard that message loud and clear,” Arjuna managing partner Natasha Lamb said in a statement. “Managing pay equity is not only supportive of Lowe’s diversity and inclusion goals, it will also allow the company to attract and retain diverse talent, positioning the company for stronger performance.”

That was the only shareholder resolution to pass at Lowe’s, although several others were filed, including what appears to be the first proxy vote related to the US Supreme Court’s leaked decision overturning Roe v. Wade. Lowe’s had not publicly reported the votes’ margins as of Thursday.

Other recent proxy votes have focused on greenhouse gas emissions reporting, net-zero goals, plastic pollution, lobbying activity, concealment clauses and racial justice.

“So far there are 17 majority votes, down from 39 in all of last year, but there are a lot that have yet to be tallied — some this week and next,” Heidi Welsh, executive director of the Sustainable Investments Institute, said in an email. “Most striking to me are half a dozen that investors approved seeking racial justice audits. The capital markets are clearly evincing support for corporate efforts to address racial justice, an enduring problem for the United States.” 

Shareholder resolutions related to racial justice won majority support in recent proxy votes at Johnson & Johnson, Apple, Home Depot, Waste Management, Altria and Maximus, Welsh noted.

Going after insurers

About 56% of Travelers shareholders voted May 25 in favor of a greenhouse gas emissions reduction proposal brought by As You Sow. That firm had filed similar resolutions at Chubb, which won with a 72% vote, and Berkshire Hathaway, which came in with slightly less than half, at 47%.

As You Sow’s resolution asked Travelers to report on any efforts it is making to measure, disclose and reduce greenhouse gas emissions associated with underwriting, insuring or investing, in accordance with the Paris Agreement. The insurer is among the top three firms providing coverage to the oil and gas industry, As You Sow noted.

“Without a clearly established climate strategy, Travelers will continue to drive climate risk to investors, insurers, and the global economy,” As You Sow president Danielle Fugere said in a statement.

Confronting greenhouse gas emissions through the insurance companies that underwrite new fossil fuel supplies is a new tactic in the ESG world. Green Century Capital Management filed three such proposals, at Travelers, Chubb and The Hartford. All of those resolutions, including that of the Travelers vote May 25, received only minority support.

In the vote at Travelers, for example, just over 13% of shareholders voted in favor.

“The vote results are in line with our expectations for this first-of-its kind proposal with the insurance companies, and we’re very pleased with the early support,” Green Century president and ESG Clarity Committee member Leslie Samuelrich said in a statement. “If the companies fail to take action, the support was strong enough to allow us to refile proposals next year.”

It has been more common for shareholders to go after banks that support new fossil fuel development.

“The insurance angle is new,” Welsh said, noting that institutional investors, through large funds, have not gone along with the idea. “That doesn’t mean anyone thinks climate change has been sufficiently addressed, and all major investors remain deeply concerned about the financial impacts of climate change.”

Recent results

Proxy votes were held last week at Twitter, Amazon, Meta, Chevron, Exxon Mobil, McDonald’s, Dollar General and Flowers Foods, in addition to those at Lowe’s and Travelers.

At Twitter, two shareholder resolutions were approved — one asking the company to report on the risks associated with the use of concealment clauses and another on electoral spending. However, other resolutions on a civil rights audit and lobbying did not pass.

Among eight shareholder resolutions filed at Facebook parent Meta, none received majority support. Those resolutions included requests for reports on concealment clauses, external costs of misinformation, content standards enforcement, human rights, child exploitation, lobbying and charitable donations.

Similarly, no shareholder proposals at Amazon won majority support. That company held proxy votes on pay gap reporting, warehouse working conditions, lobbying, a report on its retirement plan investment options and other issues.

Vote tallies from the McDonald’s shareholder resolutions weren’t filed with the SEC as of Thursday. Last week, shareholders were to vote on proposals around reports on plastics use, antibiotics use, gestation crates for pigs, a third-party civil rights audit, lobbying, and global public policy and political influence.

Oil and gas

At Exxon Mobil, voters gave majority approval to one of the five shareholder resolutions filed at the company. They turned down measures asking Exxon to reduce emissions and hydrocarbon sales, report on low-carbon business planning, report on plastic production and disclose political contributions. But shareholders did approve a proposal around scenario analysis, which was submitted by Christian Brothers Investment Services. That resolution asked the company to seek an audited report on how the International Energy Agency’s Net Zero by 2050 plan will affect Exxon’s assumptions, costs, estimates and valuations.

“Investors are concerned that the continued development of new fossil fuel resources increases the risk of such future impairments,” that proposal noted. “Exxon Mobil’s existing, audited annual disclosures do not provide investors with sufficient insight into stranded asset risk related to the energy transition.”

Similarly, most shareholder resolutions at Chevron failed to win majority support. Investors made proposals asking for greenhouse gas emissions reduction targets, a report on the impact of a net zero by 2050 scenario, a report on business with conflict-complicit governments and a racial equity audit, the latter of which still garnered 48% in favor.

Meanwhile, 98% of shareholders approved a proposal asking for a report on the reliability of methane emission disclosures.