1. Shareholder advocacy is how investors engage companies in change through dialogue regarding environmental, human rights, and governance performance.
Shareholder advocacy is practiced through purchasing shares of stock and becoming an owner of a publicly traded company. The purchasing can be done individually or through a group of investors and can include a mutual fund. This ownership allows individual and institutional investors to partake in active decisions through shareholder resolutions.
2. Shareholder resolutions are proposals submitted for a vote at a company’s annual meeting to promote change.
Often, shareholder resolutions are submitted because the company’s management would not otherwise support the initiative – hence the submission and subsequent vote. Some resolutions are successful and some are not – but at a minimum the resolutions become visible.
3. Without shareholder advocacy, the primary method for non-shareholders to raise awareness or cause a company to change behavior/outcomes is through protests.
While protests can be effective, shareholder advocacy utilizes the role of a publicly traded CEO to maximize the value of the entity that, in turn, benefits the shareholders. Through this type of advocacy, value can be demonstrated. Opportunity for financial gain as well as positive environmental, human rights, and governance outcomes exist.
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