CF Industries Holdings, Inc. (CF), Alliant Techsystems Inc. (ATK): Shareholders’ Boardroom Clout Increases

Certainly, there is much afoot at the SEC when it comes to corporate accountability and sustainability. There is a growing movement pressing the SEC to require companies to disclose their political spending. The SEC already requires that companies disclose their risks associated with climate change in their annual filings, and recent legal developments virtually guarantee that the SEC’s requirement that companies disclose their use of conflict minerals will come into force.

Earlier this year, the SEC made a game-changing reversal of its previous stance when it upheld a shareholder resolution with PNC Financial Services (NYSE:PNC) pressing the company to assess the greenhouse gas emissions for which it was indirectly responsible through its lending portfolio, as well as the company’s exposure to climate-change risk in its lending, investing, and financing activities. According to the Interfaith Center for Corporate Responsibility, “[T]his shift marks a reversal of earlier SEC rulings and sets a precedent with broader implications for resolutions seeking information about the financial sector’s contribution and response to climate change.”

Foolish bottom line
The takeaway from all this is straightforward: Sustainability should and does matter to investors. Irrespective of whether you, personally, think social and environmental factors are relevant to your stock analysis, the fact is that shareholders are increasingly agitating around such issues, and sustainability is now becoming a fundamental aspect of companies’ basic legal compliance. Take that logic one step further, and tending to multiple stakeholders becomes a fiduciary duty. Management can no longer afford to ignore the impact their companies have on the world around them.

The article Shareholders’ Boardroom Clout Increases originally appeared on Fool.com.

Sara Murphy has no position in any stocks mentioned. Follow her on Twitter: @SMurphSmiles. The Motley Fool recommends Cisco Systems and owns shares of CF Industries Holdings (NYSE:CF) and PNC Financial Services. 

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