THE COCA-COLA COMPANY | Report risks to company from state restrictions on reproductive rights and planned corporate response at THE COCA-COLA COMPANY

Status
13.12% votes in favour
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
KO
Lead filer
As You Sow
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Public health
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
Shareholders request that Coca-Cola’s Board of Directors issue a public report prior to December 31, 2023, omitting confidential information and at reasonable expense, detailing any known and potential risks or costs to the company caused by enacted or proposed state policies severely restricting reproductive rights, and detailing any strategies beyond litigation and legal compliance that the company may deploy to minimize or mitigate these risks.
Whereas clause
While the Coca-Cola Company (“Coke”) has stated “[t]here is overwhelming evidence that achieving equality and empowerment for women has broad ripple effects that are good for society,” in the 2020-22 election cycles, the Proponent estimates that Coke has given more than $1.8 million to politicians and political organizations seeking to limit women’s reproductive rights. States have introduced nearly 600 laws restricting abortion access,[2] and 14 states have banned most abortions at six weeks of pregnancy, including Georgia. Other states have protected abortion access.[3]

This patchwork of laws adds complexity for Coke. Coke and its independent bottling partners have significant operations in states where reproductive restrictions have been limited. Employees of Coke and its operating partners now face challenges accessing reproductive healthcare, including abortion services, for themselves or their family members. Employers, as well as employees, bear the cost of restricted access to reproductive health care. For example, women who cannot access abortion are three times more likely to leave the workforce than women who are able to access abortion when needed.[4] The Institute for Women’s Policy Research estimates that state-level abortion restrictions may annually keep more than 500,000 women aged 15 to 44 out of the workforce.[5]

Coke may find it more difficult to recruit employees to Georgia or to the other states which have outlawed abortion.[6] According to a 2022 survey, more than 50 percent of women under 40, regardless of political affiliation, would prefer to work for a company that supports abortion access.[7] This may harm Coke’s ability to meet diversity and inclusion goals, with negative consequences to performance, brand, and reputation.
Surveys have consistently shown that a majority of Americans wanted to keep the Roe v. Wade framework intact.[8] In a 2021 survey of U.S. consumers, 64 percent said employers should ensure that employees have access to reproductive health care and 42 percent would be more likely to buy from a brand that publicly supports reproductive health care
Supporting statement
Shareholders recommend that the report evaluate any risks and costs to the company associated with new laws and legislation severely restricting reproductive rights and similar restrictive laws proposed or enacted in other states. In its discretion, the board’s analysis may include any effects on employee hiring, retention, and productivity, and decisions regarding closure or expansion of operations in states proposing or enacting restrictive laws and strategies, such as any public policy advocacy by the company, related political contribution policies, and human resources or educational strategies.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Rothschild & co Asset ManagementFor
CANDRIAMForReproductive rights actually referred to in the resolution are fundamental human rights: as expressed by human rights bodies such as the Office from the High Commissioner on Human Rights [1], access to abortion is a fundamental right. Restricting such rights impact not only individuals and their relatives but also their whole personal and professional life. In that respect, Candriam brings its support to the resolution as corporates will indeed be impacted by such laws restricting access to reproductive technologies. With that being said, our support is not without concern. Indeed the wording of the proposal may have an impact of focusing on a specific group of employees only and asking a company to report on the risks and costs caused by the above legislation which may reinforce prejudices about working parents and deepen discriminatory behaviours based on gender. While the wording of the proposal only mentions reporting on risks and costs associated with the said laws (which is an intentional choice by the filer to eliminate the possibility of the proposal being rejected by the issuer), we share the objective that is mentioned in the supporting statement by the filer that the company should demonstrate the consequences of such laws on employee hiring, retention, and productivity, and decisions regarding closure or expansion of operations in states proposing or enacting restrictive laws and strategies such as any public policy advocacy by the company, related political contributions policies, and human resources or educational strategies.
In that context, we reiterate Candriam defends non-discrimination values and in particular promotes measures supporting
• working parents ( flexible work arrangement, quality childcare options, adapted health coverage, prevention of discrimination etc)
• workers seeking access to reproductive technologies and forced to travel out of their residence state due to laws restricting reproductive rights
• any corporate initiative advocating against state laws restricting access to fundamental human rights.
We believe such measures, as they participate in the well-being of employees, will also increase their level of engagement and ultimately serve the sustainable fundamentals of the company.
[1]https://www.ohchr.org/sites/default/files/Documents/Issues/Women/WRGS/SexualHealth/INFO_Abortion_WEB.pdf
Anima SgrForAdditional information on the potential risks and costs associated
with proposed or enacted state policies that restrict reproductive healthcare would allow shareholders to assess how the company is managing such risks.

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