Intuit Inc. shareholders have defeated a resolution at the company's annual meeting that would have required publishing an annual report on how investments in fossil fuel and timber companies affect Intuit's 401(k) plan.
The proposal received 12.6% of the votes at the Jan. 18 meeting. Results were published Jan. 22 in an 8-K statement filed with the Securities and Exchange Commission.
Intuit's board of directors opposed the resolution by nonprofit shareholder advocacy organization As You Sow.
The report should disclose "how the company is protecting plan beneficiaries — especially those with a longer investment time horizon — from the increased future portfolio risk created by present-day investments in high-carbon companies," the organization's proposal said.
"While our company has taken actions to address its operational greenhouse gas emissions, it has not acted to meaningfully address the emissions generated by its retirement plan investments," the proposal said.
As You Sow criticized the 401(k) plan's qualified default investment alternative, the Vanguard Target Retirement Fund series, which it said accounts for 76% of plan assets.
The funds in this target-date series "invest heavily in high-carbon companies and companies contributing to deforestation," the proposal said.
"Investments in high-carbon companies and companies contributing to deforestation help fuel the climate crisis and make worst-case economic scenarios more likely," it added.
In a note to shareholders, Intuit's board said the 401(k) plan "offers a variety of investment options, including the ability to choose investments structured to consider climate risk."
The board explained that "the primary investment managers, and nearly all of the subadvisers, of the funds offered by our 401(k) plan, as signatories to the U.N. Principles for Responsible Investment, are publicly committed to incorporate climate risk and other ESG factors into their investment practices."
The board also noted that the plan offers a self-directed brokerage account in which environmental, social and governance-related investments are available.
The shareholder resolution is "misplaced," the board concluded, because the fiduciary duty belongs to the Employee Benefits Administrative Committee, "a management-level committee that serves as the plan's fiduciary in consultation with a third-party fiduciary investment consultant."
The committee reviews "a variety of potential risks, reward opportunities and goals, including, but not limited to, those related to climate change, to allow participants to diversify their investments and pursue their individual retirement objectives," the board wrote.
Intuit Inc. 401(k) Plan, Mountain View, Calif., had $2.5 billion in assets as of Dec. 31, 2022, according to the latest Form 5500.
