On March 19, 2023, a report released by the United Nations Intergovernmental Panel on Climate Change (IPCC) outlined that “there is a rapidly closing window of opportunity to secure a livable and sustainable future for all.” Despite this outlook, IPCC Chair Hoesung Lee says that the worst climate outcomes can still be curtailed, “if we act now.”
This April and May, the biggest financial backers of corporations that induce climate change and disregard rights will convene for their Annual General Meetings, known as AGM season. As this season nears, allies from the Stop the Money Pipeline (STMP) coalition and Amazon Watch are joining efforts to demand accountability from these corporations by pressuring Wall Street to put these issues at the forefront of their agendas in this year’s Shareholder Showdown Campaign. By participating in this campaign, we hope to push institutional investors to vote yes on important climate and Indigenous rights resolutions brought before banks and insurance companies.
A quick term rundown:
- Annual General Meetings: AGMs provide a unique opportunity to pressure financial institutions to address key issues. During an AGM, investors in the company, also known as shareholders, gather to review a company’s annual financial performance, vote on key resolutions, and provide the opportunity to ask questions directly to the CEO, senior management, and board of directors — though sometimes the board cherry-picks the questions.
- Shareholders own “shares,” which allows for partial ownership in the company, with more shares in a company translating to more decision-making power during the AGMs and power to decide the company’s overall strategy.
- Shareholder resolutions are non-binding proposals presented to a company’s board of directors during AGMs that shareholders vote on. Over the years, filers of shareholder resolutions have demanded that banks should implement stronger policies to curtail climate chaos, respect human and Indigenous rights, and push for more sustainable practices.
- Institutional investors: To increase the likelihood of support for important resolutions, advocates must strategically apply pressure to key investors who hold significant influence during AGMs, like institutional investors. Institutional investors are entities that maintain and raise money on behalf of clients, like public pension funds, state treasurers, and mutual funds holding large investments in banks and asset management firms. Because of their comparatively large control of shares, institutional investors can have great influence over the outcome of these shareholder resolutions, making them a key target for those hoping to ramp up pressure for climate justice.
What are the shareholder resolutions in 2023?
This year, major shareholder resolutions pertaining to Indigenous rights and climate justice were filed at banks and insurance companies.
- Indigenous rights resolution: This resolution, sent to banks including Citigroup and Royal Bank of Canada, and insurance companies such as Chubb, calls for the board of directors at these institutions to outline the “effectiveness of [the company’s] policies, practices and performance indicators” in relation to upholding internationally-recognized standards for Indigenous rights. These recognized standards include the UN Declaration on the Rights of Indigenous Peoples and the International Labour Organization Convention 169. The filers of the resolution also argue that failing to adopt comprehensive policies can significantly impact shareholder value by damaging the company’s reputation. In previous Amazon Watch risk assessments, risk alerts, and current campaigns, we also make similar arguments that continued financing of extractive oil, gas, and mining companies can result in social, environmental, and reputational risks for financial institutions.
- Climate justice resolutions: There are three resolutions pertaining to improving climate justice efforts and policies of banks and insurance companies. These resolutions demand that 1) institutions adopt a time-bound phase-out of new fossil fuel exploration and development, 2) banks set absolute greenhouse gas reduction targets, and 3) banks produce comprehensive plans detailing how they will meet 2030 climate targets. These resolutions were filed at JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup, and other major banks. Though many of these banks have a handful of stated climate commitments, such as being part of the UN’s Net-Zero Banking Alliance, many continue to finance billions of dollars to environmentally and socially destructive projects.
Is this strategy effective?
If a resolution reaches a majority threshold, it is passed. However, resolutions don’t need to be passed to be considered effective by campaigners. For example, in 2022, a resolution calling on corporations to stop financing the expansion of fossil fuels only received the following percentages at respective banks:
- Citigroup: 12.8%
- Bank of America: 11%
- Goldman Sachs: 11%
- JPMorgan Chase: 10.9%
Despite the seemingly low numbers, we are pushing for them to grow, as the global movement for climate justice grows larger. It is also important to remember that these percentages still represent billions of dollars of assets under management in these companies.
The Shareholder Showdown Campaign seeks to increase these percentages by pressuring institutional investors to vote yes on these resolutions. If successful, we can push banks and insurance companies closer to addressing their complicity in the climate crisis and continued disregard of rights. As our financial targets carry on their AGM season, we’ll be gearing up to face them, and we will need you to raise your voice.
Stay connected with us on Facebook, Instagram, and Twitter, and take action to learn about how you can deepen your advocacy for Amazon and hold corporations and financial institutions accountable!
