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As the scope of the multiple crises facing our environment becomes ever more apparent, are shareholders growing bolder about demanding change?
In a move organizers call “unprecedented,” 81.2% of Dupont shareholders voted in favor of a resolution late last month calling on the company to report on the plastic pellets it releases into the environment, even though company management advised against it.
“[It’s] the highest vote ever for a shareholder resolution on an environmental issue that was opposed by management,” Heidi Welsh, executive director of the Sustainable Investments Institute, said in a press release from As You Sow, the advocacy group that wrote the resolution.
Is Change on the Horizon?
Since 1992, As You Show has used shareholder advocacy to push corporations to prioritize human rights and environmental responsibility. The group works with smaller progressive investors who allow the nonprofit to borrow their shares in order to submit shareholder resolutions, As You Sow senior vice president Conrad MacKerron explains to Treehugger. These include the recently passed resolution calling on DuPont De Nemours to release an annual report on how much plastic the company releases into the environment and how effectively its current policies curb this pollution.
As You Sow has experience submitting these resolutions, so it knows how big a deal the 81% approval really was. In fact, it had submitted a similar resolution in 2019 to DowDupont, before the chemical giant split. But that resolution was only backed by seven percent of investors. The fact that the measure saw such a jump in support from investors in what is partly the same company in a matter of years “makes it pretty incredible,” MacKerron tells Treehugger.
“It was puzzling but also thrilling to get a vote of that size,” he says.
So what changed? MacKerron says it is too soon to tell for sure. It will take some time for data on which investors voted which way to become public. However, he does have a couple of theories.
For one thing, activists have put increasing pressure on major investors to use their votes to promote climate action, such as proposals requiring companies to align their policies with the goals of the Paris agreement. This pressure prompted BlackRock, the world’s largest asset manager with $7 trillion in investments, to announce last year that it was putting sustainability at the center of its investment decisions.
“I think there’s something afoot here with big investors like BlackRock and Vanguard moving to make their voting policies more progressive, and so that they’re now supporting proposals that they previously opposed,” MacKerron says.
This new direction seems to have moved beyond climate to incorporate other environmental and social justice concerns. Another resolution calling on Dupont to disclose the diversity of its employees by publishing its EEO-1 data earned an even higher 84 percent of votes, also against management opposition.
The other factor, MacKerron hypothesizes, is the growing awareness of the plastic pollution crisis. Plastic has been discovered everywhere from the Mariana Trench to the peaks of the Alps, from bottled water to the food we eat.
“I think people are very concerned that this is an issue that’s kind of out of control and we need to figure out and take some initial steps to reign it in,” MacKerron says.
The newly-passed proposal is one such step. Plastic pellets are the raw components of almost all plastic products, As You Sow explained in its release. These petrochemical building blocks are estimated to be the second-largest source of microplastics in the ocean by weight. It is believed that about 10 trillion of them are spilled into the environment every year.
However, this information is currently based on studies from environmental organizations and scientists that count plastic pollution in a limited area and extrapolate outwards from there, MacKerron explains. Adding company data to these figures could help researchers understand the true scope of the problem.
“If these companies have data, if they can just disclose it, that will help researchers understand if this is as big a problem as has been seen in some of the studies they’ve done,” MacKerron says.
The question now is whether or not Dupont will follow through. As You Sow filed the resolution with the company in the first place because it was one of the few publicly traded companies that had not already agreed to report annually on pellet spills. All shareholder resolutions are non-binding, and the company has not yet confirmed how it will respond.
“DuPont is committed to transparent reporting on sustainability and environmental matters, and annually issues a Sustainability Report,” DuPont Reputation and Media Relations Leader Dan Turner says in a statement emailed to Treehugger. “We are taking action at our facilities to avoid pellet spills, increase plastic recycling, and prevent plastic waste from entering the environment. The DuPont Board will review the results of the vote on the proposal and will determine the appropriate next steps with respect to reporting.”
However, MacKerron says it is unlikely DuPont will ignore the vote since that would mean going against the clear will of its owners.
“Companies don’t usually ignore votes that are that high, or they do so at their own peril,” he says.
Even if management does agree, As You Sow will still have to work with the company to make its reports as meaningful as possible. The nonprofit so far has nondisclosure agreements from major players including Chevron Phillips Chemical, Exxon Mobil Chemical, Westlake Chemical, Occidental Petroleum, and Dow Chemical, though only Chevron Phillips Chemical, Exxon, and Dow have provided data so far. However, the data the nonprofit has received has not painted the full picture.
“What we’re finding is the companies that have reported are only reporting what’s on their property, which tends to be very little,” MacKerron explains. “Much of it gets spilled during the transportation process, where it’s sent by truck or rail to the customers, and that wasn’t really covered under the disclosure of these original proposals.”
That means the next step is working with the companies to report on spills for the entire pellet supply chain, MacKerron says.
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