People who invest in companies have used shareholder resolutions to make companies answer for their part in social issues like the opioid crisis. A bill by U.S. Rep. Bryan Steil (R-Janesville) would silence investors by letting companies off the hook for having to include these kinds of votes in their proxy statements. (Picture source))
Congressman Bryan Steil wants to make it harder for buyers to keep an eye on the companies they invest in. Stopping investors from fixing problems like opioid addiction, climate change, or unsafe drinking water hurts Wisconsin towns in the long run. But a bill proposed by Congressman Steil, a Republican from Janesville’s 1st District, would make it harder for investors to push companies to act responsibly.
The bill, which is set to be heard on Tuesday, would get rid of the federal rule that shareholders’ proposals on these kinds of issues be included in the proxy statement, which is part of a company’s annual meeting announcement.
This way, other investors would not have to see them and vote on them. Votes from shareholders are one of the best ways for investors to hold companies and their boards of directors responsible for actions that put investors’ money and our communities at risk.
Take the opioid problem as an example. More than 10,000 people in our state have died since 2000 from taking too many opioids. No matter what race or age group you are, or where you live in Wisconsin, the opioid epidemic has destroyed families and neighborhoods.
Pharmaceutical businesses, drug wholesalers, and retail chains all make money off of opioid drugs. But because opioids are bad for our communities, the companies that make them are at a high risk of being sued and having ethics problems.
From 2017 to 2023, a group of 67 investors, including my company, sent more than 100 shareholder suggestions to 32 of these companies. Members of Investors for Opioid and Pharmaceutical Accountability put forward proposals that would give boards of directors more power to explore and handle opioid-related risks on their own.
Shareholder suggestions on climate risk are mostly about a company’s plans to cut down on pollution and change its business to fit a clean energy economy.
Temperatures in our state have been rising by at least two degrees Fahrenheit every year since 1950. It takes longer for ice to form on the Great Lakes and melts faster.
Heavy rainstorms are happening more often, which is flooding and flooding farming land. Extreme weather that is expected in the coming decades is very bad for people’s health in towns and for crops in rural areas.
At companies across the U.S. in 2024, over 200 climate-related proposals were put to a vote. This shows how important investors think the problem is in terms of the risks to both the companies they have invested in and our future as a whole.
Last but not least, investors have tried to stop businesses from adding harmful chemicals to drinking water. Poly- and perfluoroalkyl substances (PFAS), also known as “forever chemicals,” have been connected to a higher chance of some cancers, lower birth weights, damage to the immune and reproductive systems, and changes in how hormones work.
Over 50 Wisconsin towns, like Superior, La Crosse, Eau Claire, Wausau, Madison, and Milwaukee, have found PFAS in their drinking water. Because of PFAS pollution, some parts of our state have to use bottled water right now.
The PFAS problem started in boardrooms, where careless managers decided to keep making these chemicals while ignoring or downplaying the risks that came with them. Shareholder suggestions have tried to get companies to handle these chemicals in a more responsible way.
For example, in 2006, investors in DuPont put forward a shareholder motion asking the company to report on whether it would be possible to stop using a PFAS chemical in the production of Teflon and other goods. McDonald’s and Proctor & Gamble both decided to manage and cut down on the use of PFAS in their products after shareholder proposals in 2020 and 2024.
But Congressman Steil’s bill would take away shareholders’ ability to have these kinds of proposals show on corporate proxy statements. This would stop shareholders from checking their own companies for risks that could hurt their investments and our communities.
Congressman Steil’s suggested legislation would not protect investments; instead, it would get rid of a cheap way to keep investments valuable and make Wisconsinites’ lives better.