Coca-Cola shareholders had to steer the world’s largest nonalcoholic beverage company back on track after an unfocused environmental, sustainability, and governance (ESG) proposal was proposed at its annual shareholders’ meeting.
Coca-Cola shareholders recently voted to strike down a contentious ESG proposal that asked the company to conduct a comprehensive survey determining whether “enacted or proposed state policies” offered “potential risks or costs to the company,” reported Fox News.
The proposal, which was introduced by As You Sow, a California-based nonprofit that promotes ESG in corporations, also asked the soft drink company to issue a public report on its findings and to detail any strategies “beyond litigation and legal compliance” it would deploy to “minimize or mitigate” such risks.
The politically driven measure drew quite a stir ahead of the company’s annual shareholders’ meeting due to the proposal’s focus on states that restrict abortions. The nonprofit suggested that Coca-Cola ease its business operations in states where abortion restrictions exist, according to reporting from Fox News.
Meredith Benton, a Whistle Stop Capital consultant who works with As You Sow and helped present the ESG proposal, believes the company may have stumbled into a situation it might have otherwise avoided.
“Coke may not want to get involved in the politics of this topic, but the politics of this topic have gotten involved with Coca-Cola,” Benton said, Bloomberg Law reported.
Ultimately, Coca-Cola shareholders wanted no part in the agenda-driven proposal, with nearly 90% of the company’s controlling shares voting against the measure.
Even before the proposal failed, Coca-Cola had confirmed in an April 25 proxy statement that its current risk management processes were appropriate and sufficient to address potential risks raised in the proposal.
Coca-Cola’s other shareholder proposals included a variety of requests, such as an “audit of the Company’s impact on nonwhite stakeholders,” a “global transparency report,” a “political expenditures value alignment,” and an “independent Board chair policy.”
None of the company’s five shareholder proposals were approved prior to the annual shareholder’s meeting.
Similar to other titans of their respective industries, Coca-Cola as a brand has leaned heavily into the promotion of ESG initiatives over the years and holds a “AAA” rating from MSCI ESG.