Wealthy investors and asset managers hold significant power over major companies through the stocks they own or control. Each year, shareholder advocacy groups file 500-word proposals, known as shareholder resolutions, in an effort to leverage this power for positive change. These resolutions may call on companies to reduce greenhouse gas emissions or disclose more information on their resource use. Shareholders typically vote on these resolutions between April and June during “proxy season,” with the results being non-binding but capable of influencing company decisions and garnering media attention on specific issues.
Recently, activist investors have secured key concessions from major companies such as Disney, Hormel, and Choice Hotels related to reducing plastics use and monitoring hazardous additives. Green Century Capital Management, a leading activist investment firm, emphasizes the business case for environmental action in its negotiations with companies. These efforts highlight the growing awareness among corporations about the risks associated with single-use plastics, driven by increasing regulations and global initiatives. The shareholder advocacy strategy focuses on dialogue and negotiation, with filing resolutions being a means to advance conversations rather than a primary tactic.
By engaging in discussions and leveraging shareholder influence, advocacy groups like As You Sow and Green Century have successfully pushed companies like Hormel and Disney to commit to reducing plastics use and enhancing transparency. While not all negotiations lead to mutual agreements, these efforts demonstrate the potential for shareholder activism to drive corporate responsibility. Looking ahead, increased regulation, including EPR laws and restrictions on harmful additives, will play a crucial role in addressing the global plastics crisis.
