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GOVERNANCE

Shareholders focus on environment, corporate political activity in proxy proposals — report

The environment and corporate political activity remain key areas of focus for shareholder proposals this proxy season, although the number of proposals on board and workplace diversity and pay equity is up significantly, said a report released Wednesday by non-profit shareholder advocacy groups As You Sow, Sustainable Investments Institute and Proxy Impact.

Environment-related proposals accounted for 26% of the 430 shareholder proposals filed as of Feb. 15, followed by political activity at 21%; human/labor rights, 18%; sustainability, 12%; diversity, 11%; other, 6%; and proposals filed by conservative groups, 3%.

Within environment, climate change remains a primary focus, although the total number of proposals focused solely on climate change dropped to 82 this year from 94 this time last year, said the report — Proxy Preview 2017. Investors continue to encourage more carbon tracking and risk management disclosure. Other environmental concerns include antibiotics resistance in the meat supply chain, the reduction of food waste and nanomaterials in infant formula.

Corporations' political activity also remains a key issue for shareholder activists, although the percentage of political activity-related proposals is down six percentage points from last year to 20%. For the fifth straight year, lobbying disclosure proposals surpassed proposals on election spending.

Regarding human rights, the Israeli-Palestinian conflict remains a big focus, accounting for some 20 proposals. New this year are proposals that focus on banks and energy companies' indigenous-rights policies, inspired by the Dakota Access Pipeline controversy, the report said.

Some 29 proposals also have been filed asking for companies to adopt or report on board diversity policies, the highest number in a decade, the report said. Investors are also calling for increased workplace diversity, with 29 proposals filed seeking disclosure or policies on equal pay and opportunities for women, and racial and ethnic minorities.

The total number of shareholders proposals — 430 — filed as of Feb. 15 is up from 370 in 2016, but down from a record 433 in 2015. There were 431 proposals filed in all of 2016, down from 465 in 2015.

The full report is available online.