Credit: Curt Carnemark / World Bank (CC)

Impact of RI

There are many examples where shareholders have used their shareholder power to improve corporations' social and environmental behaviour:

Tar Sands (Shell and BP, 2010)

Tar Sands

Early in 2010 FairPensions co-ordinated two shareholder resolutions, asking BP and Shell to publish details of the environmental, social and financial risks associated with their tar sands project. Supported by some of the largest pension funds in the world, these resolutions saw 1 in 10 shareholders refusing to side with management at the Shell AGM, while the BP AGM saw 1 in 7 reject the company's recommendation. Amidst massive media coverage, both Shell and BP rushed to meet with investors and made important disclosures as a result.

Executive Pay (Shell, 2009)

Shell

Royal Dutch Shell experienced the largest shareholder revolt in UK corporate history in May 2009, after nearly 60% of shareholders voted against a generous executive pay policy. Shell had decided to award its chief executive, Jeroen van der Veer, a pay package worth £9.1m, an increase of 58% on 2007. Investor anger was stoked after Shell missed its target of finishing third in a league table of big oil companies ranked by shareholder returns.

Labour Standards (Wal-Mart, 2008)

Walmart

A group of European investors (including the pension fund manager F&C) created a shareholder resolution before the June AGM of Wal-Mart, expressing concern over the company's apparent inflexibility after bans by several US cities on Wal-Mart's out-of-town hypermarkets. They also challenged the company's failure to comply with international labour standards. Wal-Mart's poor business reputation, they said, was driving away customers and putting their investments at risk. After years of defending its anti-union stance in the US, Wal-Mart announced it would join a dialogue with investors on meeting ILO standards on employment. The company's 2008 AGM saw more shareholder resolutions than ever selected for the vote by the company

Access to medicines (Novartis, 2007)

Patents vs Patients

FairPensions' joint campaign with Oxfam to secure the continuing availability of affordable generic medicines in developing countries centred on a court case in India, through which pharmaceuticals giant Novartis sought local patent protection for its best-selling drugs. In a powerful example of responsible investment in action, we contacted pension funds worth £1.7trn, asking them to exert their influence as institutional investors to force Novartis to drop its claim. By capturing extensive media coverage, mobilising pension fund members and briefing investors we generated such pressure that in August 2007, Novartis dropped its appeal; a move hailed by Oxfam as “a vindication for India and a victory for campaigners.”

Sexual & Gender Discrimination (Robert Half International, 2007)

Rainbow flag

The New York City Pension Funds introduced a shareholder resolution at Robert Half International, a professional staffing and consultancy firm, requiring it to prohibit discrimination on the grounds of sexual orientation and gender identity. When the company notified the Pension Funds that it would amend its policies in light of the criticism, the shareholder resolution was withdrawn. The New York City Pension Funds have successfully urged around 30 of America's largest companies to adopt similar policies in recent years.

Political contributions (Lockheed Martin, Chevron etc. 2007)

Money

Following increasing concern about the lack of transparency in big-business donations to political causes and candidates, The New York City Pension Funds offered shareholder resolutions at 10 companies, requiring them to publicly disclose their political contributions to candidates, parties, committees and 527 organisations. Following talks with the Pension Funds, Lockheed Martin, Chevron, health insurance company Cigna, information company EMC and clothing company Limited Brands all began disclosing their political contributions. In total 31 companies have been persuaded to do so through shareholder resolutions since 2003.

Non-discrimination: The MacBride Principles (2003)

The New York City Pension Funds (managing over $90 billion in assets) has made active use of its shareholdings in companies with operations in Northern Ireland to seek enforcement of the MacBride Principles, which seek non-discrimination of Catholics in the Northern Irish labour market. Since 2003, the New York City Pension Funds have negotiated MacBride implementation agreements with several major US companies with significant franchise operations in Northern Ireland, including the Marriot hotel chain, Coca-Cola and ExxonMobil. As one example, William C Thompson, Comptroller of the New York City Pension Funds, demanded that a loyalist mural in the Shankill area of Belfast be removed from the side of a KFC. He reminded the company that the New York City Pension Funds owned KFC shares worth more than $30m. The mural was painted over in less than 24 hours.

Sudan (Talisman and Arakis Energy, 2003)

Sudanese flag

In 1998 Talisman purchased Arakis Energy, a large player in the Sudanese oil industry. At the time the government of Sudan was almost totally reliant on oil revenues in fighting a civil war. The war effort was repeatedly accused of war crimes and human rights abuses leading to pressure on Talisman to sell its interest in Arakis. Amongst others, the Ontario Teachers' Pension Plan, threatened to sell their shares if the company did not pull out of Sudan. In 2003 Talisman Energy divested the Sudan interest acquired through the Arakis acquisition selling its holdings to ONGC Videsh.