What Is Shareholder Activism?

Shareholder activism refers to shareholders of a company using their stock ownership to motivate management and the board of directors to make changes in the way their company is run.

How Does Shareholder Activism Work?

Why Is Shareholder Activism Important to Clean Yield?

Clean Yield as Your Shareholder Activism Partner

Portfolio Examples of Shareholder Activism

Shareholder Activism includes any actions taken by shareholders to influence a company’s policies, management, or operations to achieve a set of goals. A variety of motivations drive shareholder activism, including corporate governance issues, maximizing financial return, and ethical, social, or environmental priorities.

Shareholder activism includes proxy voting, engaging directly with company leaders, and submitting proposals for consideration at annual meetings. The success of shareholder activism depends on a variety of factors, including support from other shareholders and how the company’s leadership responds to proposals.

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How Does Shareholder Activism Work?

Owning shares in a publicly traded company gives investors the right to file shareholder proposals (within strict Securities and Exchange Commission (SEC) parameters) that are placed on the annual proxy statement and voted on at a company’s annual meeting. Proxy voting gives companies like Clean Yield the authority to vote in a client’s best interest and values — learn more about proxy voting and Clean Yield’s approach. Due to SEC regulations, these proposals must be carefully worded and must address high-level policies, not “ordinary business” decisions. Often, the proposals call for a company to deliver a report on the issue in question, rather than demanding that the company adopt a specific policy.

Companies prefer to avoid discussing such matters at their annual meetings, so they are often willing to meet independently with shareholder advocates in the hopes that the resolution will be withdrawn in exchange for making commitments to address the issue. If a company fails to live up to its commitments in the ensuing year, Clean Yield may file a proposal for the following annual meeting.

Our goal is to arrive at a win-win outcome, where the company ultimately makes changes that improve its business practices and growth prospects without further proposals or action from Clean Yield.

Learn About Our Approach to Proxy Voting

Why Is Shareholder Activism Important to Clean Yield?

Shareholder activism is an essential part of Clean Yield’s work to help our clients make a positive impact on the world. Through the power of share ownership, we are in a position to engage with corporate executives about their companies’ policies on important social and environmental issues. We dialogue with companies to show them that adopting progressive policies can add value to the company — by improving their capacity to recruit employees, manage a variety of risks, become efficient operators, and develop stronger brands. We have used this power to press companies on a wide range of issues, including greenhouse gas emissions targets, political contributions transparency, and reproductive rights policies.

Building investment portfolios that meet rigorous social and environmental screening criteria is essential to align our clients’ money with their values — but the screening process does little to alter corporate behavior. Shareholder activism is where our clients’ power as company shareholders can be used to make a tangible difference.

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Clean Yield as Your Shareholder Activism Partner

Clean Yield’s shareholder activism depends on the participation of our clients, as their ownership of company shares gives us the opportunity to engage. We often use low-cost “legacy” stock shares of companies that would not typically be in our client portfolios. Clients bring these stocks with them when they join Clean Yield, but may not want to sell due to tax constraints, and instead can use them for shareholder activism.

Sustainable Asset Management Services

Each year, Clean Yield develops a shareholder advocacy strategy that identifies priority issues and companies where we think we can move the needle in a substantive way. Our strategy often builds on prior-year engagements with companies where we have unfinished business. We further inform our strategy by working with third-party subject experts and legal counsel to deepen our understanding of issues and shape the “ask” we make of companies.

We then write to companies to initiate a dialogue about the issue of concern. Some companies are quite responsive and welcome the opportunity to have constructive conversations with their shareholders and stakeholders; others have little interest in engaging. In the latter case, Clean Yield may file a shareholder proposal to bring the issue to the attention of all shareholders via the company’s annual proxy statement.

Shareholder Activism in the Clean Yield Portfolio

Over 40 years, Clean Yield has built a long legacy of shareholder advocacy. The following examples illustrate our commitment to clients and investments that move us toward a more just and sustainable society.

Case Study:

Clean Yield and Rhia Ventures

Since 2019, Clean Yield has partnered with Rhia Ventures to engage with corporations about reproductive health care, rights, and public policy. One approach we have taken is to press companies to ensure that their corporate political spending does not undermine their publicly proclaimed commitments — such as funding anti-abortion legislation while claiming support for women in the workplace.

Read more about our partnership with Rhia Ventures:

Clean Yield’s Reflections and Actions Regarding Reproductive Rights

Post-Roe: Anger and Action

FedEx Shareholder Proposal Demands Greater Accountability for Company’s Political Spending

Case Study:

Clean Yield and Cigna

In spring 2022, Clean Yield filed a proposal at the annual meeting of health insurance giant Cigna, asking the company to report on aligning its political contributions with its stated values. The proposal received a notably high 46% of the vote. In 2023 Clean Yield refiled the proposal but then withdrew it when the company agreed to expand its political contributions reporting to include metrics that track alignment between donations and the company’s stated business priorities. It was only the second major U.S. corporation to do so to date.

Read more about our partnership with Rhia Ventures:

Cigna Commits to Strengthening Transparency of Political Contributions