The Impact of Abortion Rights on Shareholder Activism in the United States

In the United States, it is common for listed groups to be challenged by their shareholders on societal issues. Resolutions on the working conditions of employees, the policy of inclusion of LGBT people or on consumer rights are regularly put to the vote. This year, for the first time, it is the right to abortion that has appeared on the agenda of certain general assemblies (GA). This follows the US Supreme Court’s June 2022 decision to abolish the federal right to abortion. Fifteen states have already banned abortion, others protect access to this right. This mosaic of laws adds complexity to the conduct of business for listed groups.

In 2023, no fewer than 30 draft resolutions were tabled by shareholders to discuss this subject. Half was withdrawn following private discussions between companies and investors, such as at TJX Cos, the discount department store chains, or at AT&T, the telephone company. But the other half stood and was voted on. This is the case at Coca-Cola, Walmart, Eli Lilly, American Express, or even HCA Healthcare.

Among the investors who file these resolutions, ESG investors, more for the right to abortion, such as the investment company Clean Yield AM, the NGO Change Finance, or As You Sow, a non-profit foundation that wants to promote corporate social and environmental responsibility (CSR) through shareholder action. At the other end of the spectrum, more conservative investors, such as the National Center for Public Policy Research, are also asking companies to position themselves.

More information

Progressive or not, these shareholders want more information. How are listed groups going to respond to requests from the authorities, who may more specifically require telecommunications companies or banks to provide private data on this subject (digital traces on Internet searches for clinics practicing abortion, or traces of payment) ? What impact will such a collaboration have on reputation and business? Many companies have made a commitment in favor of abortion (indicating in particular that they are ready to pay the travel expenses of their employees to go to a State where abortion is not banned). At the risk of being sued. Conversely, those who are not committed in this direction run a reputational risk and could encounter difficulties in attracting new recruits.

Coca-Cola is one of the groups that have been challenged by its shareholders. The society has a progressive rhetoric but has funded anti-abortion political committees. As You Sow has requested the publication of a report on the risks and costs associated with this new public policy. At Eli Lilly, National Center for Public Policy Research filed a similar resolution. He believes that his positions (paying travel expenses for employees to perform an abortion) pose a risk to the company.

“The company must focus on its pharmaceutical mission and its fiduciary duty to shareholders,” the organization said in the resolution. At Walmart’s AGM, Clean Yield Asset Management was even more specific. He wants to know how the company will respond to requests for information about customers in states that criminalize access to abortion. Change Finance, at Amex, made a similar request.

Coca-Cola arrested several times

Coca-Cola was challenged a second time, this time by Clean Yield AM, who asked him to explain why he had supported candidates from political parties who defended values ​​contrary to those promoted by the company, such as the empowerment of women.

“Companies first tried in a classic way to remove this subject from the agenda of shareholder meetings. The traditional approach, which usually works quite well, is to ask the Securities and Exchange Commission (SEC) to reject shareholder proposals on the grounds that they are not votable. But the SEC has said that investors should have the opportunity to vote on these abortion proposals, whichever side they come from,” said Bénédicte Hautefort, co-founder of Scalens, in a column published by “Challenges”. Each time, these resolutions were rejected by a very large majority of shareholders.