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Since the 1970s, some shareholders of publicly traded companies have used “shareholder proposals” as a form of activism to encourage more responsible corporate behavior and to raise concern on issues that a company may not be adequately managing. Proposals can include demands that companies divest from certain funds or entities, uphold codes of conduct, improve disclosure on environmental and social topics, or make tangible commitments to improving business practices.
In 2023, shareholder activism saw a steady number of submissions regarding human rights in conflict-affected areas, with some proposals including Israel as a country of concern regarding potential human rights abuses. Some anti-Israel activists use shareholder resolutions to target Israel with this language by claiming that companies’ Environmental, Social, and Governance (ESG) and Corporate Social Responsibility (CSR) standards could effectively prohibit them from doing business in Israel or with Israeli companies. Such proposals often include Israel in addition to Saudi Arabia, the United Arab Emirates, and China.
ADL analysts searched the SEC filings of Fortune 500 companies, SEC Rule 14a-8 No-Action Requests, and databases and reports of shareholder activist groups. Among the companies searched, 501 proposals brought by shareholders have successfully made it to the proxy ballot to be voted on.
23 of those proposals focused on human rights in conflict afflicted areas or named foreign countries where a company’s product could be or has been, in the activist’s opinion, abused or misused. This is inclusive of anti-ESG proponents filing proposals.
Of the 23 proposals, five proposals mentioned Israel or activities in the territories and Gaza as areas of concern (Caterpillar, Amazon, PayPal, Lockheed Martin, General Dynamics Corps). One proposal mentioning Israel was omitted from the proxy ballot on a technicality (Raytheon).
Overall, China, Saudi Arabia and Israel were the most targeted countries in such proposals, including those filed by anti-ESG groups.
Most of the resolutions that targeted Israel did so by calling for the companies to conduct ‘’human rights assessments” or customer due diligence assessments. Such assessments alert businesses to the potential human rights impact of their presence in region or country – in this case the impact of a company’s continued business with Israel on Palestinians. Rather than addressing legitimate human rights concerns, however, the campaigns that accompany these resolutions offer a simplistic answer to an increasingly protracted and complicated conflict. These assessments or failure to produce them can be used as a cudgel by anti-Israel activists to press the companies to scale back their business in Israel and advance the cause of the BDS movement.
In 2022, five similar resolutions were presented to Amazon, Alphabet/Google, Caterpillar, General Dynamics, and Lockheed Martin. Additionally, one was presented to PNC Bank, naming Israel’s military activities as a point of concern in the supporting documentation.
As predicted last year, this year brought the return of Project Nimbus -related proposals and renewed interest in companies such as PayPal.
Project Nimbus
In 2022, anti-Israel activists targeted Alphabet and Amazon for the first time, focusing on their contractual agreement to provide cloud computing and other technology services to Israel’s government as part of ‘Project Nimbus,’ an effort to develop Israel’s cloud computing infrastructure. Opposition to Alphabet and Amazon’s participation in Project Nimbus is coordinated by a coalition called “No Tech for Apartheid,” spearheaded by activist groups Jewish Voice for Peace and MPower Change. Opponents of Project Nimbus have long claimed that it will allow Israel to deepen its information networks, increase surveillance against Palestinians, and potentially provide artificial intelligence to be weaponized against Palestinians. Perhaps because the campaign organizers calculated that shareholders were likely to reject explicit calls to drop the contracts (which are worth up to $1.2 billion to Alphabet/Google and Amazon combined), they formulated these resolutions as requests that the companies produce or commission reports assessing how their work under the contract could have a deleterious impact on human rights.
This year, the No Tech for Apartheid campaign continued conducting shareholder activism and filed a proposal at Amazon that included a bevy of asks around oversight of how its products are used by customers. Notably, Glass Lewis, a prominent American proxy advisory services company, advised voting “yes” on this year's proposal – not because of anything to do with Israel or foreign countries, but rather over concerns with Ring, the right to privacy, and the potential for abuse by law enforcement.
Proxy advisory services like Glass Lewis provide research and data to shareholders and investors, as well as voting recommendations on management and shareholder proposals that are voted on at companies’ annual general meetings. A shareholder only has the options to vote yes, no, or abstain from voting on a proposal, and editing of a shareholder proposal is not possible once it has been formally submitted and appears on the ballot. A proxy advisor’s opinion to vote for something matters quite a bit, as many proxy advisors are still relatively conservative in their assessments of voting yes on a proposal that ultimately may not impact fundamental business practices.
The 2023 Amazon proposal failed to win a majority vote, though it did garner significant support – likely because of domestic privacy concerns that were grouped into the proposal. Glass Lewis’ endorsement points to a larger trend of concerns about surveillance and privacy, and the potentially the role of Israeli technology with these companies – not all of which are anti-Israel or antisemitic.
PayPal
In 2016, activists and international rights groups wrote a letter demanding that digital payment giant PayPal stop excluding millions of Palestinians from accessing its services. The company’s family of brands include Braintree, Xoom, and Venmo. Palestinians have reported similar troubles with Venmo’s policies regarding transactions to Palestinians living in the West Bank as well as sending money to Palestinians living there. Many Palestinians, especially freelancers, claim the lack of access to PayPal’s platform denies them access to job opportunities. Apple Pay, Western Union, Visa and Mastercard all provide these services to the West Bank. In 2021, human rights groups launched” PayPal for Palestine” and sent another letter to PayPal demanding action on the issue. American groups such as MPower Change and Ekō (formerly known as SumOfUs) have also created their own petitions calling on PayPal to increase access to their platform; they are also signatories to the 2021 letter. The campaign continued in 2022.
In late 2022, Harrington Investments filed a shareholder proposal at PayPal requesting that the company “establish a policy that ensures that people in conflict zones, such as in Palestine, do not suffer discriminatory exclusion from the company's financial services, or alternatively, if the company chooses not to establish this policy, provide an evaluation of the economic impact the policy of exclusion has on the affected populations as well as the company's finances, operations and reputation.” The proposal did not pass, though the broader campaign is ongoing.
Looking Ahead
The 2023 war between Israel and Hamas has supercharged efforts by anti-Israel activists to pressure companies to stop doing business with Israel and it is likely that this will result in higher-than-normal numbers of anti-Israel corporate resolutions in 2024. Responsible use of technology will continue to be a concern and there will likely be an increased emphasis on surveillance technology involving Israeli companies. The "No Tech for Apartheid” campaigns against Google and Amazon continue.
As China’s treatment of Uyghurs and the Russian invasion of Ukraine remain top of mind for many human rights-minded activists, proposals requesting human rights impact assessments and other accountability measures are likely to remain fixtures in the proposal landscape.