While the level of shareholder activism on reproductive rights was relatively subdued in 2022, the controversial topic will feature as part of several boardroom discussions in 2023. The number of proposals concerning reproductive rights set to be voted on at U.S.-listed company meetings in 2023 has exceeded 30, compared to just three one year prior.

It comes as White House officials have stated that 60 anti-abortion bills have been filed in the 2023 legislative session and over 26 million women currently live in states that have banned abortion.

As Lowe’s Companies and Walmart prepare to face calls from investors to report on the risks associated with state reproduction policies again this proxy season, big name giants like Alphabet, PayPal, Coca-Cola, Comcast, and Walt Disney, will be challenged on their reproductive healthcare policies and practices for the first time.

Not just a healthcare issue

31 proposals are being filed in coordination with Reproductive Health Investor Alliance (Rhia) Ventures, a firm that champions reproductive health coverage through corporate engagement with its investors and partners. Speaking with Insightia, Rhia’s Director of Corporate Engagement Shelley Alpern confirmed that the catalyst for this year’s campaign boom was the 2022 U.S. Supreme Court Ruling to overturn Roe v. Wade, which has given individual states the full power to regulate any aspect of abortion not protected by federal law.

Alpern said the ruling triggered a wave of investor concern that ultimately resulted in the filing of more proposals for the 2023 proxy season than the previous three seasons combined. “I started hearing from investors, even those we [Rhia Ventures] had not worked with before, saying they wanted to get involved.”

The scope of proposals being filed by investors in 2023 is however becoming far more expansive, moving beyond an examination of a company’s healthcare policy, with investors now also seeking disclosures on risk mitigation, political spending, and data privacy.

UnitedHealth Group (UNH) is being targeted by the Educational Foundation of America after publicly available records showed that the company had donated $5.3 million to politicians and political organizations working to weaken abortion access, despite UNH selling products that insure abortion. Shelley Alpern also told Insightia that UNH is understood to have donated to politicians that supported a Texas bill allowing citizens to turn in people aiding or abetting abortion for a cash reward.

The abortion bounty law is commonly cited by investors seeking greater disclosure from companies over the links between abortion and data privacy proposals filed at companies such as American Express, CVS, and Verisk, seek reporting on the potential risks and costs to them if they are seen to fulfill requests from law enforcement to access customer data in states where abortion is illegal.

Elsewhere, shareholders at companies like Costco and United Parcel Service (UPS) are also seeking disclosure on the risks and costs associated with the overall impact of state laws restricting reproductive rights, as well as information on how the companies plan to combat such risks.

A partisan issue

In 2022, the U.S. played host to the anti-ESG movement, which has significantly impacted shareholder activism. As well as pushing republican state officials to divest from leading fund managers such as BlackRock over their ESG investment policies, anti-ESG has also taken root within reproductive rights-related activism.

Indiana-based Eli Lilly found itself targeted by the National Center for Public Policy Research (NCPPR) after the healthcare company highlighted its opposition to local state laws that restricted abortion in cases other than rape, incest, or where the individual’s life is in danger.

The company and investor group agreed that the issue was “divisive and deeply personal,” but for different reasons. NCPPR argued that taking a public position exposed the company to potential “reputational, legal, and financial” risks and “can only serve to alienate consumers, employees, and investors, and impact the company’s bottom-line.” To remedy this, NCPPR urged the drug manufacturer to focus on its fiduciary duty.

Other investors, who wish to remain anonymous, argued that they brought reproductive rights proposals forward based on their belief that they are business issues, not political. One such investor told Insightia that “businesses that are unable to provide access to comprehensive reproductive care will suffer in terms of increased employee turnover and time off and will struggle to recruit talent compared to companies in less restrictive states.”

Tipping the scales

The few proposals that faced a vote in 2022 had limited success, with none winning majority votes at their respective meetings and all three failing to secure the support of proxy adviser Glass Lewis, nor institutional investment giants Vanguard and BlackRock.

However, with two out of three of the 2022 proposals backed by almost a third of investors, the proposals clearly do hold some merit and are more than eligible for resubmission. According to Insightia’s Voting module, the Educational Foundation of America secured 32.2% support from investors at Lowe’s Companies annual meeting, while 30.2% of TJX Companies shareholders backed the demand.

Looking ahead to the upcoming proxy season, pro-choice campaigners feel that the environment is changing, potentially in their favor.

“This year, the SEC has approved the approach, Roe v. Wade has fallen, state laws are now all over the map, and the proposal is being filed widely across many sectors…what was seemingly a marginal issue is now front and center in America, including corporate America,” David Stocks of the Educational Foundation of America told Insightia.