Trade Unions Are Activists Now

Welcome back to Troop’s Insights newsletter. We build tools for modern asset stewardship and we think out loud. In this space you’ll find our latest analysis of the corporate governance space, plus peeks into our product suite’s development. Consider it a conversation about the future; reply if you’d like to share thoughts or learn more.

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New Climate Disclosure Rules Just Dropped

On Wednesday, the SEC finally approved a version of the climate disclosure rules it proposed a couple years ago. That original proposal generated controversy for its inclusion of so-called “scope 3” emissions reporting—a mandate that companies disclose not just the emissions generated by their own operations, but also the emissions generated throughout their supply chains. (California is already set to require this of some companies within the next few years.)

Now it turns out that the SEC has scaled back its initial plan, dropping the scope 3 emissions reporting requirement altogether. Publicly traded companies will still have to tell the government how much carbon they’re spewing out into the environment each year, but, under these new rules, they’re free to stop short of gauging their supply chains’ effect on the planet.

Say on “Say on Pay”

Speaking of disclosure, Agenda reminds us that the upcoming proxy season will be first during which investors must“disclose how they voted on say on pay and other compensation-related votes”—the “investors” here being institutions. Pretty soon, anyone with an internet connection will be able to look up a firm’s Form N-PX filing and see exactly how it voted on ballot issues related to executive comp.

This is good news for just about everyone involved, but it’s especially good news for companies that rely on that data; learn more on Troop’s website about how regulatory filings inform our work.

Trade Unions Are Activists Now

A recent article in The Economist takes a look at how, when it comes to activism on the corporate level, trade unions are taking inspiration from “hedge-fund sharks" and attempting to influence governance decisions at large companies with a comparatively small stack of shares. Socially-minded, labor-oriented activism is nothing new—individual investors and corporate gadflies have been attempting this sort of thing for decades—but The Economist notes that ever since the advent of universal proxy rules in 2022, more and more small activists seem to be taking up the charge. The magazine’s big example here is the Strategic Organizing Center (SOC), a coalition of three North American labor unions that have been fighting for three board seats at the coffee chain Starbucks.