Walden Wins ESG Reporting at CLARCOR

clarcorCLARCOR Inc. (CLC) hosted its Annual General Meeting on March 29, 2016. A shareholder proposal led by Walden Asset Management for environmental, social and governance (ESG) reporting received 61% support from shareholders, excluding abstentions.

With this result, CLARCOR joins a small minority of companies to ever experience a majority vote in support of on an environmental or social resolution. According to proxy advisor ISS, just one environmental or social proposal passed out of 474 submitted in 2015.

The resolution was co-filed by a number of proponents including Christopher Reynolds Foundation, Needmor Fund, Park Foundation, Sisters of Notre Dame de Namur, The Swift Foundation, and Wallace Global Fund.

CLARCOR: ESG Proposal Specifics

The proposal asked CLARCOR to:

Issue a report describing the company’s present policies, performance, and improvement targets related to key environmental, social and governance (ESG) risks and opportunities, including greenhouse gas (GHG) emissions reduction goals.

This is the third year that CLARCOR received the resolution requesting sustainability reporting and the proposal gained support in each year (40% in 2014 and 45% in 2015).

CLAECOR: Sign of Growing Support

After the preliminary vote was announced, Carly Greenberg, ESG Analyst at Walden Asset Management said:

We believe a new era is dawning for proposals seeking ESG disclosure as we have already seen a significant jump in support for sustainability reporting proposals at three companies[1] in the 2016 proxy season.  Investors are increasingly seeking corporate reporting on key ESG risks and opportunities and find this information useful to their investment decision-making. Also telling of this trend, Glass Lewis and ISS, leading proxy advisory services, recommended that shareholders vote in favor of our proposal at CLARCOR.

In addition to support from proxy advisors, the proposal was also supported by Australia’s Local Government Super, CBIS, Calvert, CalPERS, CalSTRS, Florida SBA, and Colorado PERA. (I looked up the voted at ProxyDemocracy and ProxyInsight.) Once again, all the funds announcing their votes in advance of the meeting tend to consider ESG issues disproportionately over those that do not.

Readers Take Action

Ask your fund to start announcing their votes in advance of the shareholder’s meeting. They have a fiduciary duty to treat their proxy votes as assets. If they are doing their due diligence in determining how to vote, why wouldn’t they want to influence the votes of other shareholders by announcing their votes before the meeting?

The majority of funds use wither the ISS or Glass Lewis voting platforms, so letting customers see how they vote is simply a matter of them putting a link on their website to their existing voting platform. See CalSTRS as an example. I would bet that once they start posting their votes, they will be more likely to vote for positive ESG proposals like the one passed at CLARCOR asking for a report addressing climate change.

Although we don’t know how they voted at CLARCOR because they haven’t announced their votes yet, BlackRock voted against this type of proposal every time last year and Vanguard abstained each time. If you have investments with either, I suggest you ask them to announce their votes in advance and to also vote in favor of such proposals in the future.

If your investments are with another fund you can generally find their email addressing by searching the name of the fund, email and terms like corporate governance, proxy voting, and/or board of directors.

CLAECOR Embraces Proposal

Subsequent to the shareholder meeting, CLARCOR told Walden that it intends to move forward in providing more ESG information to stakeholders. The shareholder proponents are pleased with this constructive outcome and look forward to continuing to engage with CLARCOR on sustainability reporting.

[1] Aside from CLARCOR, support for a sixth-year proposal at Emerson Electric co-led by Mercy Investment Services and Wespath Investment Management increased from 39 percent in 2015 to 47 percent in 2016, and support for a third-year proposal at ESCO Technologies increased from 28 percent in 2015 to 43.5 percent in 2016.

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