Shareholder Proposals Regarding Corporate Respect for Human Rights

BoardroomShareholder proposals filed during this year’s proxy season reflect investors’ continued concerns about the social and environmental impacts of corporate operations. The Proxy Preview published by As You Sow, the Sustainable Investments Institute, and Proxy Impact, provides an overview of the 433 non-binding shareholder proposals that had been filed by investors for the 2015 proxy season as of mid-February.

Of the proposals reviewed in the Proxy Preview:

  • 27 % address environmental matters, including climate change;
  • 26% addressed corporate political activity;
  • 15% addressed human rights, including labor rights; and
  • 9% addressed workplace diversity.

These non-binding proposals were filed by a range of institutional investors including socially responsible investor (“SRI”) firms, pension funds, faith-based institutions, pension funds, labor unions, and universities.

A significant number of the proposals focused on human rights concerns specifically asked companies to conduct human rights risk assessments in connection with their operations. Notably, eleven companies received proposals requesting that their boards of directors issue reports identifying and analyzing “the potential and actual human rights risks” of each company’s operations, including their supply chains.

Specifically, investors asked that corporate boards issue reports on human rights impact assessments that address:

  • The human rights principles used to frame the assessment;
  • The frequency of assessment;
  • The methodology used to track and measure human rights performance;
  • The nature and extent of consultation with relevant stakeholders in connection with the assessment; and
  • How the results of the assessment are incorporated into company policies and decision-making.

Companies that have received requests for reports on the human rights impact assessment process include: Expedia; Kroger; Sears Holdings; Staples; and Superior Energy Services. Other companies receiving similar proposals regarding human rights impact assessments included: Facebook;; Urban Outfitters; and Dr. Pepper Snapple.

Other notable proposals filed in the 2015 proxy season including those asking companies: to assess the links between deforestation and human rights, including by minimizing the adverse environmental and human rights impacts of palm oil supply chains; and to develop policies seeking to end the charging of recruitment fees in connection with migrant workers employed at U.S. tobacco farms.

Each of these proposals reflect both investors’ concerns about human rights and their continued adoption of the expectation that companies should conduct human rights due diligence in order to operate with respect for human rights.  This expectation is at the core of the U.N. Guiding Principles on Business and Human Rights. Companies should expect that investors’ interest in promoting corporate performance and transparency with regard to human rights impacts will only increase in the coming years.

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