A record number of US companies — including American Express, Eli Lilly and HCA Healthcare — are facing shareholder demands for more details about their abortion policies from investors following the landmark Supreme Court decision last year.
Socially conscious investors have asked at least 10 companies for more information about the risks they face from abortion policies announced after the court in June overturned federal rights to the procedure. More than a dozen additional proposals are expected to become public in the weeks ahead.
This year’s wave of abortion shareholder proposals “is definitely unprecedented”, said Jackie Cook, director of stewardship at Morningstar’s Sustainalytics division.
Overshadowed for years by boardroom battles over climate change and workplace diversity, abortion has not been a big issue for environmental, social and governance (ESG) investors. But the Supreme Court’s decision launched the issue to the forefront and now companies are facing fire from liberal and conservative activist investors.
“We want to make sure all of the relevant risks associated with abortion are considered — not just the leftwing ones,” said Scott Shepard of the National Center for Public Policy Research, a conservative-leaning non-profit, which has filed an abortion shareholder proposal at pharmaceuticals company Eli Lilly. The proposal demands more information about potential risks the Indiana-based group faces from changing company policies in response to abortion laws as well as legal costs.
Eli Lilly last year opposed a new law that limits abortions in cases other than rape, incest, or where a woman’s life is in danger. The company also said it would “be forced to plan for more employment growth outside our home state”.
“[Executives] should stay out of issues that are none of their duty,” Shepard said.
Eager to fend off one of the most divisive US political issues, at least four companies have asked the Securities and Exchange Commission to deny abortion shareholder proposals a vote at 2023 annual meetings. Companies usually ask the SEC to shoot down proposals they do not like, but the agency has been allowing more shareholder proposals to go to a vote.
Eli Lilly has asked the SEC for permission to block the shareholder proposal ahead of the company’s annual meeting.
HCA Healthcare, which operates hospitals in the US and UK, is under investor pressure to disclose more information about when it offers abortions. The HCA shareholder petition was filed by Rhia Ventures, which has previously filed reproductive rights proposals, and the United Church Funds, which manages more than $1bn.
The Tennessee-based company has also gone to the SEC to block the abortion shareholder proposal. Rulings are expected in the weeks ahead.
Credit card company Amex is challenging a shareholder proposal from Change Finance, a Colorado-based firm that manages a $108mn exchange-traded fund.
The group has filed three abortion shareholder proposals at financial companies seeking more information about when the businesses give police customer information in states that have criminalised abortion access. Change Finance held more than $1mn of the group’s shares as of Friday.
Amex and Eli Lilly declined to comment. HCA did not respond to a request for comment on Wednesday.
In 2022, shareholders voted on abortion petitions at Walmart, TJ Maxx and hardware store Lowe’s. All three votes occurred before the Supreme Court decision. The vote at Lowe’s received 32 per cent support, but BlackRock and Vanguard did not vote for it.
Dorrit Lowsen, president of Change Finance, said US social media companies have already handed over messages to police in cases involving women seeking to terminate a pregnancy. Corporate positions on abortion pose risks to a company’s reputation and ability to retain staff, she said.
“We are really in this to drive behaviour,” Lowsen said. The financial services companies she has filed petitions at “have an added duty” to protect users “from persecution for their reproductive healthcare decisions”, she said.
“Our disclosure requests are intended to focus attention on this issue and to surface information investors can use to make better-informed decisions about investment risk,” she said.