Institutional Investors Highlight 2022 Lobbying Disclosure Campaign

Disclosure of corporate lobbying remained a pressing shareholder proposal topic for 2022, with a coalition of investors filing resolutions at 40 companies. Out of the 40 proposals, 21 have been voted on so far, averaging 34.7% support, with majority votes at The Travelers Companies and Netflix. Proponents came to settlements for improved disclosure at 14 companies. Two proposals were no actioned due to filing deficiencies. Another three are scheduled for vote in the second half of the year.

The 2022 proposals focused on the need for disclosure of all dark money lobbying payments, as well as direct federal and state lobbying payments. In addition to dark money astroturfing, the proposals noted support for groups that lobby against policies that a company publicly supports, highlighting lobbying misalignments on climate, racial justice, voting rights, worker rights, drug pricing, corporate tax and infrastructure.

2022 Highlights: Majorities, Settlements and Win at SEC

A resolution from First Affirmative Financial Network at The Travelers Companies garnered more than 52% of votes cast by investors. The same resolution had received significant 40+ % support 2016 and 2017, yet the company had failed to disclose its lobbying payments to trade associations and social welfare groups as requested. And Boston Common’s proposal calling for disclosure at Netflix, including its payments to the Business Roundtable and Motion Picture Association of America used for lobbying, received more than 60% support from shareholders.

Proponents came to agreement to withdraw proposals at 14 companies, including at Chevron and ExxonMobil, which had each opposed disclosure for years. Exxon now produces a report that includes all federal lobbying, individual state lobbying, and ranges of all of its payments used for lobbying by its trade associations and social welfare groups.

Proponents won a victory at the SEC, when a proposal for lobbying disclosure at Eli Lilly survived the company’s challenge that it was duplicative of a lobbying alignment proposal. This new SEC determination at Eli Lilly establishes that a traditional lobbying disclosure proposal seeking disclosure does not duplicate a lobbying alignment proposal, reversing a 2020 Exxon determination that had allowed exclusion of climate lobbying alignment proposal, saying it duplicated a lobbying disclosure proposal. This new precedent establishes that traditional lobbying disclosure and lobbying alignment proposals can be submitted at the same time.

Corporate Lobbying Widespread, Disclosure to Shareholders Minimal

Corporate lobbying affects all aspects of the economy. In 2019 and 2020, companies and interest groups spent $7 billion lobbying the federal government on issues including energy, infrastructure, communications, insurance and virtually every other economic and governance issue, and at least another $3.5 billion on lobbying in state capitals. Lobbying can provide decision-makers with valuable insights and data, but it can also lead to undue influence, unfair competition and regulatory capture. In addition, lobbying may channel companies’ funds and influence into highly controversial topics with the potential to cause reputational harm.

Despite the wide spread prevalence of corporate lobbying, only 8% of the world’s 1,000 largest companies report their spending on lobbying to investors. And when companies make undisclosed payments to dark money groups to secretly influence public policy, this “astroturf” lobbying creates legal, financial and reputational risks for shareholders, as evidenced by utility FirstEnergy’s agreement to pay $230 million for funneling $60 million through dark money groups as part of bribery scheme.

Undisclosed dark money lobbying is “at least double what’s publicly reported.” In 2017, trade associations and social welfare groups spent $535 million on disclosed lobbying and $675 million on unregulated efforts to influence public policy, including strategic consulting, broadcast advertising, media relations, social media posts, polling and funding for astroturf campaigns.

Corporate funding for astroturf campaigns is widespread across industries, yet disclosures of company payments funding this activity are limited. For example, big tech companies Amazon, Alphabet and Meta fund hundreds of TAs and SWGs each year, yet fail to disclose their payments to dark money groups which advocate against anti-trust regulation like the American Conservative Union, National Taxpayers Union and Taxpayers Protection Alliance.

Company Trade Associations Fund ALEC’s Anti-ESG Model Legislation

Over 100 companies have publicly ended their ties the American Legislative Exchange Council (ALEC). ALEC has drawn attention for “numerous ties to the Capitol insurrection and Big Lie” challenging the validity of the election results, as well as promoting voter suppression and critical race theory. More recently ALEC has drawn attention for promoting a model anti-ESG law that prevents financial companies that end investments in oil, gas, and coal companies from receiving state government contracts or managing state funds.

Yet any company that belongs to the Chamber of Commerce, National Association of Manufacturers and PhRMA is supporting and represented by a seat at the ALEC table. This is because the Chamber of Commerce, National Association of Manufacturers, NetChoice and PhRMA all serve on ALEC’s Private Enterprise Advisory Council. So even if a company does not belong or directly contribute to ALEC, they are already represented through their trade associations’ active involvement.

How Companies Exploit Disclosure Loopholes

The 2022 season started off at Walt Disney, where shareholders face a trade association blind spot, with Disney failing to disclose a closed top limit for its trade association payments, and providing no information on its social welfare group payments used for lobbying.

  • Shareholders cannot tell the magnitude of Disney’s payments over $500,000 to groups like the Motion Picture Association of America (MPAA), National Association of Broadcasters, National Cable and Telecommunications Association (NCTA).
  • If Disney’s 2020 payments were comparable to Comcast’s, which does disclose, Disney’s total payments to MPAA and NCTA would have exceeded $40 million, with more than $7 million being used for non-deductible lobbying.
  • Disney is also a major contributor to 501(c)4 social welfare group Support Our Anaheim Resort Area, known as SOAR, which is now the subject of an FBI criminal complaint.

Is Disney making over $40 million in payments to these groups? Shareholders have no way to know because of the disclosure loophole. How large are Disney’s payments to groups like SOAR? Until Disney disclose its social welfare group payments to shareholders, investors have no way to know.

About the Campaign

Since 2011, a coalition of investors has filed approximately 500 shareholder proposals for lobbying disclosure, which have resulted in settlements and improved disclosure at more than 110 companies. The investor coalition is comprised of public pension funds, labor funds, asset managers, individual investors, international investors, foundations and religious investors, many whom are members of ICCR. The initiative is coordinated and led by AFSCME and Boston Trust Walden.

2022 Lobbying Disclosure Shareholder Proposal Results

Company Filer Results
Abbott Laboratories (ABT) Unitarian Universalist Association 34.7%
AbbVie (ABBV) Zevin Asset Management No actioned
AECOM (ACM) John Chevedden Settled
Alphabet (GOOG) Boston Common Asset Management 19.0%
Altria Group (MO) Trinity Health Settled
Amazon.com (AMZN) International Brotherhood of Teamsters 47.3%
American Airlines Group (AAL) John Chevedden 22.0%
Biogen (BIIB) Boston Common Asset Management Settled
Boeing (BA) Province of St. Joseph of the Capuchin Order 40.5%
Caterpillar (CAT) James McRitchie 44.6%
Charles Schwab (SCHW) Friends Fiduciary Corporation 34.7%
Charter Communications (CHTR) Service Employees International Union 38.9%
Chevron Corp (CVX) Philadelphia Settled
CME Group (CME) Boston Common Settled
Delta Air Lines (DAL) John Chevedden 27.6%
Douglas Emmett (DEI) Service Employees International Union Settled
Ecolab Inc (ECL) Boston Common Settled
Eli Lilly (LLY) Service Employees International Union 37.0%
Exelon (EXC) Service Employees International Union Settled
Exxon Mobil (XOM) United Steelworkers Settled
FedEx (FDX) International Brotherhood of Teamsters NYV
Fox Corporation (FOX) John Chevedden NYV
GEO Group (GEO) Service Employees International Union No actioned
HCA Inc (HCA) International Brotherhood of Teamsters 22.6%
Healthpeak Properties (PEAK) Service Employees International Union Settled
Invesco (IVZ) James McRitchie Settled
Lyft (LYFT) International Brotherhood of Teamsters 23.7%
Meta (FB) United Church Funds 20.6%
Netflix Inc (NFLX) Boston Common 60.4%
News Corp (NWS) John Chevedden NYV
Prologis (PLD) Service Employees International Union Settled
Quanta Services (PWR) Service Employees International Union Settled
SalesForce.com (CRM) Boston Common Settled
Travelers Companies (TRV) First Affirmative Financial Network 52.7%
Uber Technologies (UBER) International Brotherhood of Teamsters 45.2%
United Continental Holdings (UAL) John Chevedden 36.8%
United Parcel Service (UPS) Boston Trust Walden 29.6%
Wal-Mart (WMT) Zevin Asset Management 14.4%
Walt Disney (DIS) Mercy Investment Services 34.3%
XPO Logistics (XPO) Service Employees International Union 42.2%
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