Last month, three of the biggest tech companies in the world—Alphabet, Amazon, and Meta—held their annual shareholder meetings, where investors voted on a record number of shareholder proposals expressing concern about the tech companies’ practices.
The proposals sought to address vital issues including human and civil rights risks, oversight processes, workers’ rights, and corporate governance concerns, to name just a few. Open MIC co-filed a new proposal at Amazon calling on the company to improve its transparency reporting around government requests to censor content, and supported two other proposals calling for reports on Amazon’s customer due diligence practices and facial recognition technology. At Alphabet, Open MIC supported another proposal asking the company to improve disclosures around its black box algorithms and artificial intelligence systems.
When the votes were totalled, the results were mixed. The Amazon transparency proposal made a strong first showing, earning nearly 13 percent of the independent shareholder vote. The other big tech proposals Open MIC supported earned solid votes—in fact, the customer due diligence resolution was one of the most successful of all the Amazon proposals—but each vote backslid slightly from last year’s results.
In fact, nearly every repeat proposal at each of the big tech companies saw a similar minor decline in vote total.
While this trend is disappointing, it also presents an opportunity to assess what’s changing in the field of shareholder organizing, and how investors and advocates must change with it.
Tech Changing Tactics
The big tech companies have a habit of refusing to engage with investor proponents—and that hasn’t changed. While many companies respond to shareholder proposals by opening dialogue about investor concerns, neither Amazon nor Alphabet reached out to discuss any of the proposals Open MIC supported this year.
But some signs suggest the companies may have started doing more legwork with other investors, advocating against the suite of shareholder proposals to depress the overall vote.
Typically the big tech companies try to block proposals they don’t like by filing legal challenges at the Securities and Exchange Commission—but after losing the overwhelming majority of no actions filed last year, the number of no actions dropped off dramatically. Together, Alphabet, Amazon and Meta filed 28 legal challenges at the SEC in 2022. In 2023, they filed only six challenges.
A few big tech proposals also saw unusually high numbers of abstentions. One possible explanation for this is companies urging investors to abstain from proposals they would otherwise support in order to give the company some breathing room.
This is how advocacy goes: When advocates for change succeed, opponents change tactics to erect new barriers. This shifting dynamic is a sign that it’s time for advocates to get creative and keep innovating our own strategies.
Anti-ESG Pressure
ESG investing means making investment decisions informed by environmental, social, and governance concerns. Many of the big tech proposals dovetail with ESG logic—specifically, a belief that tech companies perform better if their business models respect environmental and social interests and incorporate good corporate governance practices.
One in three U.S. dollars invested are now being managed according to ESG principles—and as shareholder advocates have notched notable wins in multiple industries, an “anti-ESG” political movement has emerged.
Backed by far-right politicians and entrepreneurs, some state legislatures are introducing bills to target entities that invest according to ESG principles. Even in states where anti-ESG sentiment has yet to manifest as legislation, investors may be feeling the heat and choosing to prioritize the appearance of neutrality by limiting the number of shareholder proposals they vote for.
It’s vital to push back on this anti-ESG rhetoric. These arguments serve to disempower investors, limiting the scope of business practices they are allowed to consider—even though the scope of material risk is nowhere near so limited. To de-fang this opposition, advocates must engage closely with investors and work to debunk these arguments in the public sphere.
The Path Forward
The big tech companies have tremendous positive potential, and tremendous capacity to harm. Over the past several years, investors have turned up the pressure on tech, shattering shareholder proposal records and making the case for responsible and rights-respecting corporate governance. Open MIC has been, and continues to be, an important part of that effort.
This year’s decline in some voting is disappointing, but we are not discouraged. This is a call to reassess, to develop new tactics, and to embark with a fresh perspective toward the future we must build.
For more information:
Dana Floberg
Advocacy Director, Open MIC
dfloberg@openmic.org