Three shareholder proposals were filed this year at large companies (including Walmart and TJX) calling for companies to produce a report on the risks of state policies restricting reproductive health care should Roe vs Wade be weakened or overturned. ISS supported two of the three proposals, and it is reported that the third proposal will also receive support; the proponents were Clean Yield Asset Management, Trillium and the Educational Foundation of America. The proposals requested that target companies issue a public report detailing risks, such as effects on employee hiring, retention, and productivity; decisions regarding closure or expansion of operations in states proposing restrictive laws; and public policy advocacy of the company, plus strategies to mitigate those risks.
ISS’s rationale for supporting the proposals is that if Roe vs Wade is in fact overturned, this will trigger abortion bans in multiple states, increasing the “likelihood that the company’s female workforce will be impacted.” ISS suggested that additional information on risks to the company and how they will be addressed would be beneficial to investors and should therefore be disclosed. Meanwhile, Glass Lewis did not support the proposals because they could result in “alienating a portion of [the company’s] consumer and/or employee base.”
Among a rash of socially oriented shareholder proposals, including increased proposals calling for racial equity audits, shareholder proposals regarding reproductive rights are relatively rare. However, the proponents’ focus on the human capital risk of changes to the law in this area is instructive as it once again places talent in the forefront of investor scrutiny. Proposals aimed at “political spending misalignment” (companies highlighting support of women while donating to organizations or campaigns that would limit access to abortion) were filed at more than ten companies and received between 30-47% support so far.
