Proxy Voting Guidelines

Shareholder proposals (proxies) motivate much of the University’s activities as a responsible investor.  Over the years, the ACSRI has found that many proposals are reflective of, or inspired by, principles and values that it supports and believes reflect those of the Columbia community. 

However, shareholder proposals are not of uniform quality, and the ACSRI cannot always recommend supporting specific shareholder proposals because they were drafted in a manner that was overreaching, vague or not feasible. The ACSRI also may withhold support if a solution other than shareholder action (e.g., government regulation or market forces) appeared more appropriate or effective.

The following shareholder proposal (proxy) voting guidelines summarize ACSRI positions on various environmental and social concerns to the University in its role as investor. These guidelines provide an indication of how the ACSRI will advise the Trustees to vote on these environmental, social and governance (ESG) issues.

Students in W3010: “Science, Technology, and Society” (Spring 2009) completed a draft of the guidelines in March 2009. The ACSRI reviewed the draft guidelines and tested their application throughout the 2009 proxy voting season.

The ACSRI approved these Guidelines in February 2010 and updated them in March 2019, March 2020, April 2022 and April 2023.

This document is reflective of ACSRI proxy voting precedent, and should not be viewed as an official position of the Trustees or the University.

Resolved on March 13, 2019: For the ACSRI to revisit the process of updating the proxy voting guidelines every three years, unless a more frequent revisitation is deemed to be appropriate.

Liability and Disclosure

The ACSRI is mindful of the concern that shareholder proposals calling for mandatory disclosure may subject public companies to liability under the securities laws. While the risk of legal liability may encourage companies to disclose truthfully, mandating the disclosure of information that is inherently vague, subjective or subject to uncertainty may impose significant costs on public companies and ultimately reduce corporate transparency.

We support:

•    Proposals which require companies to disclose objective, verifiable facts that are material to investors, i.e., those which are viewed by a reasonable investor as having significantly altered the total mix of information made available.

•    Proposals which, on balance, favor the benefits of mandatory disclosure over the costs of potential liability, e.g., by ensuring that a disclosure mandate is narrowly tailored to the purpose underlying a shareholder proposal.

We do not support:

Proposals which mandate the disclosure of information that is inherently vague, subjective or subject to uncertainty.
 

Guidelines

Animal Testing

We do not support:

  • Proposals calling for companies to eliminate the use of animal testing unless:
  • The company is employing animal testing practices that are unnecessary or not required by law or federal regulations.
  • The company is conducting animal testing when reasonable or more technologically advanced alternatives are available.
  • The company has failed to comply with regulations laid out in the Animal Welfare Act regarding animal testing.
  • There are recent, notable fines or legal proceedings related to the company’s animal testing policies.
Animal Welfare Policies

We support:

  • Proposals seeking reports on companies’ animal welfare policies in accordance to the Animal Welfare Act, published on company websites, unless:
    • The company has recently published a report on animal welfare policies and strictly monitors compliance with those standards.
    • The company’s established policies reflect policies that govern the industry as a whole.
    • There are recent, notable fines or legal proceedings related to the company’s animal testing policies.
Animal Transportation

We support:

  • Proposals designed to promote health and comfort of farm animals.
  • Proposals that ask companies to implement transportation by air over ground transportation.
Antibiotic Use

We support:

  • Proposals designed to promote good stewardship of antibiotic use by meat producers and purchasers, in order to limit the extent of antibiotic resistance—a public health issue. (Adapted from FAIRR Policy).

We do not support:

  • Proposals that call for reduction in antibiotic use by specific amounts or within a specific timeframe.
Controlled Atmosphere Killing (CAK)

We support:

  • Proposals requesting the implementation of CAK methods at company and/or supplier companies.
  • Proposals requesting a report on the feasibility of implementing CAK methods at a company and/or supplier companies.
Living Environment for Animals

We support:

  • Proposals requesting a report on the living environment of animals in factory farms.
  • Proposals that promote the phasing out of battery cages in poultry suppliers.
Predatory Lending

Predatory Lending practice consists of any loans that are described as unfair, deceptive, or fraudulent practices by lenders during the loan origination process. These loans are categorized by the following characteristics: unjustified risk based pricing, single premium credit insurance, failure to present the loan price as negotiable, failure to clearly and accurately disclose terms and conditions, loans which do not accurately reflect the credit score of the consumer, short- term loans with disproportionally high fees, servicing agent and securitization abuses, and loans based on discriminating factors.

We support:

  • Proposals that request companies to adopt policies that preclude predatory lending.
  • Proposals that ask companies to prepare reports explaining racial and ethnic disparities pertaining to high cost mortgages and other forms of lending.
  • Proposals that request reports on company lending guidelines and procedures, including the establishment of a board committee for oversight, taking into account:
    • Whether the company has adequately disclosed mechanisms in place to prevent abusive lending practices.
    • Whether the company has adequately disclosed the financial risks of the lending products in question.
    • Whether the company has been subject to violations of lending laws or serious lending controversies.
    • Peer companies' policies to prevent abusive lending practices.
Increased Disclosure

We support:

  • Proposals that implement stricter accounting policies based on international accounting standards.
  • Proposals that promote greater disclosure of leverage and discouraging excess leverage that we believe can result in unnecessary risk taking.
The Equator Principles

We support:

  • Proposals that support the adoption of the Equator Principles unless the institution has limited loan transactions that fit within these Principles. In adopting the Equator Principles, a financial institution agrees to provide project finance loans only to those projects that borrowers agree to develop in a socially responsible manner and according to sound environmental management practices. The Equator Principles are applied globally and to all industry sectors.

We note that the Equator Principles have been expanded to include:

  1. Project Finance Advisory Services
  2. Project Finance
  3. Project-Related Corporate Loans
  4. Bridge Loans

We support:

  • Proposals properly advanced that ask for companies to disclose their board composition and/or diversity matrix.
  • Proposals that ask for diversity as a consideration in board composition.
  • Proposals properly advanced that ask for companies to establish board committees when a need is indicated to address environmental, human rights or social issues. 

We do not vote on, as outside of our jurisdiction:

  • Proposals that address shareholder value.
Transparency and Reporting

We support:

  • Proposals that request companies to provide detailed annual reports disclosing all monetary and non-monetary contributions. Corporations owe their investors satisfactory information so that they can make a meaningful assessment of their philanthropic activity. Meaningful information includes annual reporting on:
    • names of charities receiving donation money
    • amount of money donated to each one of those charities
    • brief explanation of reason for giving to each charity
    • outcome reporting data

We support:

  • Proposals that require companies to ensure the privacy of customers’ personal data. This includes but is not limited to only releasing personal information and private records when required by law.
  • Proposals requesting that companies report on and establish board oversight for measures to more effectively monitor and manage risks related to customer data privacy.
Climate Change

We support:

  • Proposals asking for reporting on companies’ climate change impact and climate-related risks and opportunities. However, we tend to vote against proposals that request reports on global climate change in general or the science of climate change, as there is already substantial research on these issues.
Environment

We support:

  • Proposals seeking greater disclosure of the company’s environmental practices, and/or material environmental risks and liabilities.
  • Proposals calling for reasonable steps to reduce companies’ negative environmental impact, including any threats to biodiversity in ecologically sensitive areas.
  • Proposals requesting that companies with oil sand operations review the environmental impact of said operations.
Energy

We support:

  • Proposals asking for the development of renewable energy
  • Proposals requesting reports on the development of renewable energy
Genetic Engineering

We do not support:

  • Proposals that request public reports and research on the safety of genetically modified organisms beyond what is regulated by USDA, FDA, and EPA
  • Proposals that request that independent committees of the board review company policy and procedures for monitoring the safety of genetically engineered products.
Green House Gas (GHG) Emissions

We support:

  • Proposals calling for reporting on GHG emissions, unless companies are already reporting on GHG emissions.
  • Proposals that request that companies set or adopt GHG quantitative goals based on current technologies for reducing GHG emissions from the firm’s products and operations.
  • Proposals calling for companies to align to science-based targets for the reduction of GHG emissions.

We do not support:

  • Proposals that call for reduction in greenhouse gas emissions by specific amounts or within a specific time frame, unless:
    • The company lags behind industry standards.
    • The company has been the subject of recent, significant violations, fines, litigation, or controversy related to greenhouse gas emissions.
Sustainability

We support:

  • Proposals requesting greater reporting of sustainability practices related to social, economic, and environmental sustainability, unless companies are already publishing reports that reference Global Reporting Initiative (http://www.globalreporting.org/), Sustainability Accounting Standards Board (SASB), Environmental, Health & Safety reports, Task Force on Climate-Related Financial Disclosures or other industry-recognized reporting standards.
Waste Management/Recycling

We support:

  • Proposals that request that the company review and report on the efficacy of waste management and recycling programs including any published strategies and goals related to internal company operations, supply chain operations, and consumer post consumption behavior. However, the committee recognizes the difficulty of controlling the public’s recycling behavior and does not expect any company to be fully responsible for quantitative benchmarks in these cases.
Diversity and Inclusion

We support:

  • Proposals that require companies to execute equal employment opportunity initiatives and formulate reports that include the following:
    • A statistical break down of employees by job category, sex, race, age and sexual orientation.
    • A description of affirmative action policies and programs in place for minorities and women.
    • The company’s Form EEO-1 report.
    • A description of programs designed to increase the number of persons employed with disabilities.
    • A description of how the company is working to eliminate “glass ceilings” and pay gaps for female and minority employees and those identifying as LGBTQ.
Equal Employment Opportunity, Sexual Orientation, and Gender Identity

We support:

  • Proposals that call for companies to enforce and report on enforcement of the following practices:
    • The adoption of official policies against discrimination, based on sexual orientation or gender identity.
    • An internal policy to include sexual orientation and gender identity in company-wide guidelines prohibiting discrimination.
    • The granting of spousal benefits to domestic partners, regardless of sexual orientation or gender identity.
    • Enhancing board diversity on the basis of race and gender.
  • Proposals that call for companies to conduct gender pay gap studies and publish the results of those studies.

We do not support:

  • Proposals asking companies to remove the words “sexual orientation” or “gender identity” from their nondiscrimination policies.
  • Proposals asking for spousal benefits to be rescinded or revoked based on sexual orientation or gender identity.
  • Proposals asking companies to implement MacBride Principles (or urge franchises to adopt said principles).

We support:

  • Proposals that ask companies to develop executive compensation criteria based on an executive’s accomplishment of non-financial goals, which include the improvement of:
    • Environmental Issues
    • Diversity Issues
    • Treatment of Employees
    • Corporate Social Responsibility Initiatives
  • Proposals that encourage third-party evaluations of company reports and promote clarity, transparency and ease of access. These reports should be made publicly available, i.e. published on companies’ websites and in annual reports.
  • Proposals that encourage the creation of an independent compensation committee. To be “independent” according to the definition developed by Institutional Shareholder Services, a member must have no material connection to the company other than his/her respective seat on the committee.
  • Proposals that companies apply their anti-discrimination policies to companies and organizations with which they are engaged in sponsorships and executive perks.

We do not support:

  • Proposals that request that firms compare top executive pay with the lowest paid US workers. Typically, these proposals are vague and not specifically related to social issues as much as one of governance.
Healthcare

We support:

  • Proposals asking disclosure on the financial and legal impact of their policies regarding prescription drug information, unless such information is already publicly disclosed.
  • Proposals that call for transparency in pharmaceutical promotion. This includes promotional activities; e.g., the disclosure of endorsement benefits and incentives given to physicians.
  • Proposals calling for affordable healthcare for employees and their dependents.

We do not support:

  • Proposals requesting the adoption of principles for health care reform as they put an unfair burden on the companies and ask them to take an arbitrary stance on universal healthcare, a public policy issue.
  • Proposals that attribute major health concerns to a specific product when scientific evidence is not available or circumstantial.
Product Safety

We support:

  • Proposals that ask for reporting on the use of known toxic chemicals in product production, packaging, and ingredients.
  • Proposals that call for the disclosure of expenditures on lobbying and other activities to prevent the regulation of suspected toxins that are as of yet unregulated.
  • Proposals that companies publish reports on policies regarding nanomaterial product safety and the identification of product categories that contain nanomaterials.
Occupational Safety

We support:

  • Proposals that call for companies to provide employees with above minimum legal workplace safety. For US companies, compliance needs to be beyond the minimum set by the Occupational Safety and Health Administration (http://www.osha.gov/).
  • Proposals that call for companies to prevent harm inflicted on employees by chemicals and modern appliances in the workplace.
  • Proposals that call for companies to promote mental health in the workplace in terms of working hours, and the encouragement of an emotionally safe environment.
International Production

We support:

  • Proposals that ask for companies to report on country and region selection criteria for production facilities.
  • Proposals that call for reporting on compliance with domestic and international labor, health and safety standards and regulations. The reporting should include any third party auditing reports, records of violations and improvement strategies.
Community Hazards

We support:

  • Proposals that ask for companies to report on their oversight of the community health effects of their production operations.
  • Proposals calling for reporting of placement of production facilities and their related health effects.
Access to Water

We support:

  • Proposals calling for disclosure or reporting on effects of water usage in production on local water supply and community health.

In the following guidelines, two basic definitions will be used:

  1. The International Labour Organization Core Conventions (ILOCC). These conventions have been established as constituting fundamental human rights; they are as follows:
    1. Required suppression of forced labor in all its forms
    2. Required freedom for workers to join organizations of their choosing without interference by public authorities or anti-union discrimination
    3. Required equal employment opportunities and pay/benefits regardless of demographical background
    4. Required minimum employment age be no lower than the age of completion for compulsory schooling as well as suppression of child labor in dangerous situations (such as slavery, prostitution, mining, deep sea fishing, etc.)
  2. The Universal Declaration of Human Rights (UDHR) - This declaration made by international consensus in the U.N. is the most generally accepted standard of human rights.
Labor Issues

We support:

  • Proposals for multinational corporations to adopt internationally recognized human rights principles and human standards, such as those exposed by UDHR and ILOCC.
Human Rights

We support:

  • Proposals that ask corporations to create and present reports outlining their policies and procedures regarding human rights unless doing so would cause undue financial burden to the company. Specifically, if the company would have to incur costs greater than one (1) percent of their operating revenue, then they reserve the right to decline to produce these reports.
  • Proposals that request that companies establish board committees on human rights and associated policies, unless the company has a formal structure in place to review human rights issues facing the company.
  • Proposals that request reports on company policies and procedures for assessing the adequacy of host country laws with respect to protecting indigenous rights and for obtaining the consent of affected indigenous communities for operations and other company business activities.
  • Proposals that request companies to review and develop guidelines for country selection, including guidelines on investing in or withdrawing from countries where the government has engaged in ongoing and systematic violations of human rights.

We support:

  • Proposals which request that companies publicly report on foreign sales of military equipment, designs and other domestically produced innovations as long as such resolutions permit the non-disclosure of confidential and proprietary information.
  • Proposals which request that companies publicly report on conversions of domestic and foreign military production facilities to facilities aimed at civilian production
  • Proposals which request that companies publicly report on the production of materials or components intended for the production of nuclear weapons.
  • Proposals which request that companies publicly report on the third party sales and smuggling that occurs as a result of the primary sale of their products especially when factions listed as UN terrorist organizations are third party recipients of weapons.
  • Proposals which request that companies publicly report on the sales of military equipment, raw materials and designs to countries engaged in, preparing for, or recovering from civil war at the time of sale.
  • Proposals requiring the non-disclosure of confidential and proprietary information.

We do not support:

  • Proposals that request reporting on sales of military equipment to foreign countries when it infringes on national security.
  • Proposals aimed to promote the sale of advanced technology that increases the military capabilities of other countries, especially countries with which the United States might engage in armed conflict.

We support:

  • Proposals that request more transparent and accountable reporting of political contributions, policies, procedures, and lobbying activities.
  • Proposals promoting full disclosure of contributions, the policies governing them, and the identifications of persons deciding on the contributions.
  • Proposals disclosing payments, services, and “soft money” contributions (i.e. funds that are not given directly to candidates, but to political parties for “party-building” activities) to trade organizations and other third-party groups, (including but not limited to PACs, 501(c) 3s and 527s).
  • Proposals calling for transparency in political spending.

We do not support:

  • Proposals requesting companies not to make political contributions.
  • Proposals that force companies to distribute information to newspapers and public media, as such publications could present significant costs to the company.
  • Proposals asking companies to contribute politically in a nonpartisan fashion. In the interest of practicality it is not in the best interest of shareholders to make these demands.
  • Proposals that request that companies provide lists of executives, directors, consultants, lobbyists, lawyers, or investment bankers who have served in any governmental capacity beyond regular reporting guidelines and company policies.
  • Proposals that request disclosure or identification of individuals.