As You Sow has filed a proposal with the Coca-Cola Company seeking information on the impact of legal curbs on reproductive rights in the US – a topic that governance professionals expect to be raised at other companies in the 2023 proxy season.
Specifically, the proposal requests that Coca-Cola’s board release a report next year ‘detailing any known and potential risks or costs to the company caused by enacted or proposed state policies severely restricting reproductive rights, and detailing any strategies beyond litigation and legal compliance that the company may deploy to minimize or mitigate these risks.’
In a supporting statement, As You Sow writes that the board’s analysis might include any effects on employee hiring, retention and productivity and decisions about closing or expanding the company’s operations in states proposing or enacting restrictive laws and strategies, ‘such as any public policy advocacy by the company, related political contribution policies and human resources or educational strategies.’
Among other things, the group notes that US states have introduced hundreds of laws restricting abortion access and writes that the company may find it more difficult to recruit employees in states that have outlawed abortion. It cites a 2021 survey in which 64 percent of consumers said employers should ensure employees have access to reproductive healthcare and 42 percent would be more likely to buy from a brand that publicly supports reproductive healthcare.
NOT THE FIRST… OR LAST
The proposal has been filed in the wake of the US Supreme Court overturning Roe vs Wade and governance professionals predict other measures on the topic of reproductive rights will be filed this coming proxy season – potentially on both sides of the abortion rights debate. Edward Greene, managing director at Georgeson, told Corporate Secretary sister publication IR Magazine earlier this fall that there will be a lot of post-Roe proposals relating to human capital management and employee benefits.
There is potential for such proposals to gain traction. For example, a month after a leak of the court’s draft ruling that suggested it would strike down Roe, almost a third – a level of support widely regarded as significant – of votes cast at The TJX Companies’ AGM were in favor of a proposal requesting that TJ Maxx’s parent company release a report ‘detailing any known and any potential risks and costs to the company caused by enacted or proposed state policies severely restricting reproductive rights, and detailing any strategies beyond litigation and legal compliance that the company may deploy to minimize or mitigate these risks.’
Trillium Asset Management, which filed that proposal in late 2021, wrote in its supporting statement: ‘Should [Roe] be weakened or overturned, as is widely anticipated, TJX employees will face challenges accessing abortion care… Employers as well as employees bear the cost of restricted access to reproductive healthcare.’
Following the vote, Trillium chief advocacy officer Jonas Kron said in a statement: ‘This significantly high vote is evidence that many investors are concerned about the impact the Supreme Court’s decision will have on businesses and the people who work at these businesses.’ TJX’s board had urged shareholders to vote against the proposal. The company did not respond to a request for comment at the time.
Meredith Benton, principal and founder of Whistle Stop Capital, which is supporting As You Sow with the filing, says the group has discussed reproductive rights with Coca-Cola in the past when it filed a values-alignment proposal. There have not been discussions with the company on the latest resolution.
Coca-Cola’s options include negotiating with As You Sow or requesting SEC no-action relief for omitting the proposal from its proxy statement. Benton notes that the SEC has denied such requests on similarly framed proposals at other companies. Coca-Cola filed its 2022 proxy statement on March 11.
A request for comment from Coca-Cola was not returned.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
