Estimated reading time: 7 minutes
As the Circular Economy Sr. Coordinator at As You Sow, Kelly McBee has worked with companies such as Walmart, Target, Microsoft, and Pepsi to push forward corporate climate commitments. In this fireside chat, Kelly breaks down how As You Sow works with shareholders to help shift companies towards a circular future via their plastic production, packaging, and product design.
Here’s what we’ll cover:
Reflecting on her experience in corporate and shareholder engagement, Kelly highlights how collective action from various stakeholders (legislators, consumers, shareholders, NGOs) is crucial for nudging companies to enact change.
How do you push corporations to do better?
I previously worked as a lobbyist and I thought that legislative change was the only way to force a company to enact change. However, even if a bill doesn’t become a law, it gets media attention and it has other legislators paying attention. That’s how we approach our work at As You Sow.
At As You Sow, we represent shareholders to help them make the case of why a company should make a sustainable change. We discuss why this change is material to the company and how it’s going to impact their bottom line.
Since we are a research organization, we back it up with as much research and data as we can. We also lean on other NGOs and thought leader publications.
We’ve used resources like NGO campaigns (eg., GreenPeace Campaigns) or citizen action campaigns that involve consumers urging companies to change. We try to tell companies that they’ll lose market share if their actions don’t align with their consumers’ needs.
For publications, one example of a report we use is the New Plastics Economy Global Commitment by the Ellen MacArthur Foundation. It’s a reporting document that includes companies that agreed to move forward in reducing their plastic use.
We’ve also ranked 50 of the largest corporations on their use of plastic packaging and we've cited in our resolutions another report by Breaking the Plastic Wave that provides the foundation for all of our work.
We’ll never recycle our way out of this issue, so it’s important for companies to realize that they need to reduce at the source.
What’s the process of working with a company?
We first create a shareholder proposal. A shareholder proposal is similar to a bill—it’s put forward by an owner or shareholder who is encouraging a company to take a look at an issue. The proposal makes the case for why the company hasn’t addressed that issue and describes the material importance of the issue to the company.
When a shareholder files a proposal, it sends a signal out to other shareholders, media outlets, and consumers on how a company isn’t taking action on a specific problem. Companies don’t want to look like they’re not taking action—it creates risks and threats to the company’s viability.
Shareholders don’t want to hold shares of a company that’s being outpaced by other companies. We pitch it in that way to make sure leaders of these companies know they can do better.
So, some companies work to convince us and other shareholders that they’re working on this issue to a degree that is necessary. We engage in due diligence dialogue and value our relationships with these companies. We recognize that we have an interesting leverage because a company’s shareholder may disclose more information to us than they would if we weren’t a shareholder.
At the end of the day, we’re interested in this company being financially viable. We do our best to offer information and feedback. We file a shareholder resolution as a last mode of escalation when a company isn’t seeing eye-to-eye with us. The filing gains so much attention that it often urges companies to act.
How do you select companies?
It depends on our program because we also work on other areas such as pesticides, antibiotics, energy, and utilities.
Our independent research informs how we choose companies. My engagements on plastic were informed by the reports I mentioned above. I spent a year pulling together information about these companies to see what they’re saying and going to do about their plastic usage. We ask ourselves: Do they recognize how plastic usage relates to climate change? Are they committed to taking action? Then, we rank these companies on different scales, and try to engage with the leaders and laggards.
How do you follow up with companies to make sure they follow through with their commitments?
My least favorite part about shareholder advocacy is that shareholder resolutions are non-binding. These companies are not legally obligated to take action no matter what percentage of their shareholders support.
However, it’s very much in the company’s disinterest to fail to respond to their shareholders because they’re going to get a lot of media attention.
It’s important for us to push these companies in the right direction and see if their sustainability agenda aligns with their best interest. Sometimes, companies fail to act on their commitments to us and it’s really hard to hold them accountable. That’s when we call in our peers, allies, NGOs, media and other investors to draw attention to a company that fails to act.
What would happen if more people knew about companies breaking their pledges. Are there other binding ways to get companies to act?
That would be government policy. However, consumer dollars and spending habits are very important. Campaigns led by consumers like the Boycott Kellogg Campaign have been a great nudge.
We’ve also been reticent to accept additional commitments from companies with failed actions in the past. In response, we’ve demanded a lot more from those types of companies.
Sometimes, we continue to work with them depending on their size. In general—if we have better rapport with a company, we’ll usually trust them to fulfill their commitments. For companies that have had failed actions, we write several paragraphs on how they’ll pursue this goal, when they’ll complete these actions, and what consequences they’ll face if they fail to act.
What types of partnerships and coalitions do you build?
Since we represent investors, we’re ultimately interested in the financial solvency of a company. We tend to lean more on data-heavy relationships. For instance, we get a lot of information and feedback from the Break Free from Plastics Campaign. We would align ourselves with organizations such as the Ellen MacArthur Foundation, the World Wildlife Fund, or any recycling partnership. Since those organizations have a lot of corporate interest, we do our best to see what’s within a company’s line of understanding when it comes to taking action on the environment.
For anyone who works at a large corporation, what can they do to help them engage with As You Sow and/or accelerate As You Sow’s efforts?
Fortunately, we have relationships with several companies. However, there’s always outlier companies that we can’t reach or they don’t seem to understand the issues we advocate. If you’re able to identify a point of contact for us to start our work at a specific company, that’s a great way for you to be a part of our action.
Also, if you have an investment advisor or someone who can vote your shares, please tell them about As You Sow!
How can we further support As You Sow?
We have an investor tool set called Invest Your Values. This looks different from mutual and exchange traded funds. It lets you screen those funds and see where your money is being invested.
Also an NGO, we always accept donations. We sometimes work 1:1 with our donors to see what they're interested in, and how they can support our strategy and campaign.
I would also encourage anyone who’s keen on social media to follow us because we post a lot about our line of work. We’re trying our best to work with Watch Dogs in the space and try to encourage them to report as much as they can.
Ultimately, what is the most impactful thing to get a company to change?
It’s collective action from various stakeholders—legislators, NGOS, demand by consumers, and us making the case to help companies realize the risks of these issues.
In our case, we act as a lynchpin, which makes my job really fun!
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