Boston, November 10, 2021 – The Securities and Exchange Commission’s Division of Corporation Finance issued a new staff legal bulletin on Wednesday. The bulletin revises previous SEC guidance regarding the excludability of certain shareholder proposals from companies’ proxy ballots.
Previously, the SEC gave companies significant leeway to exclude proposals they either defined as irrelevant to their business or asserted were asking for specific timeframes, goals or other methods deemed as “micromanagement.”
Under the new guidance, shareholder advocates will have a greater ability to file both proposals on issues of significant social policy and ones that ask companies to achieve specific goals. The bulletin suggests that proposals asking that “companies adopt timeframes or targets to address climate change” will not be excludable.
Green Century° president Leslie Samuelrich issued the following statement:
“This revision to SEC staff guidance will facilitate improved investor stewardship on environmental issues. Thanks to this guidance, shareholder advocates like Green Century Capital Management will be better able to file shareholder proposals that ask companies to set time-bound targets on such critical issues as climate change and deforestation.
“While the previous administration’s guidance had forced shareholders to soften our asks by requesting reports on these systemic environmental risks, this new direction confirms that as shareholders, we can call on the companies we own to make specific time-bound plans in line with external benchmarks. It is clear from this new guidance that investors can press companies to set greenhouse gas emissions reduction targets that align with scientific necessity and global consensus, rather than merely asking companies to consider and report on the issue.
“This guidance restores key rights that shareholders had been denied. It allows us to address the material risks posed by the climate and biodiversity crises with the urgency and directness that is required to meet these existential threats.”
A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.
About Green Century Capital Management
°Green Century Capital Management, Inc. (Green Century) is the investment advisor to the Green Century Funds (The Funds). The Green Century Funds are the first family of fossil fuel free, responsible, and diversified mutual funds in the United States. Green Century Capital Management hosts an award-winning and in-house shareholder advocacy program and is the only mutual fund company in the U.S. wholly owned by environmental and public health nonprofit organizations.
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The Green Century Funds are distributed by UMB Distribution Services, LLC. 235 W Galena Street, Milwaukee, WI 53212. 11/21