Amazon is Under Pressure Over Warehouse Safety Again

The
proposal
was
first
filed
in
2022,
when
it
garnered
44%
of
the
vote
at
the
company’s
annual
meeting.
Adjusted
for
independent
vote
share,
this
worked
out
to
53%
of
the
vote.

In

2023,
the
proposal
got
35%
support.
Adjusted
for
independent
vote
share,
it
brings
the
support
to
43%.
Amazon
founder
Jeff
Bezos
owns
more
than
9%
of
the
company.
 

“Last
year’s
proposal
received
the
highest
votes
of
any
Amazon
proposal
filed
that
year,”
Tulipshare
Fund
chief
executive Antoine
Argouges
tells Morningstar.

“Such
a
strong
showing
of
support
encouraged
our
decision
to
refile,
as
it
is
clear
these
issues
are
important
to
shareholders.
Continued
investigations
and
negative
press
show
that
this
issue
remains
prevalent
at
the
company.

“Shareholders
proved
last
year
that
they
want
to
see
these
risks
mitigated
and
see
Amazon
take
action
to
address
its
safety
issues
and
mistreatment
of
workers.
We
are
hopeful
this
year’s
resolution
will
receive
even
stronger
support”.

Amundi
declined
to
comment.

Back
in
its

2023
proxy
statement,
Amazon
had
responded
to
Tulipshare’s
proposal
saying
“we
have
disclosed
our
workforce
incident
rates
along
with
industry
data.
Our
goal
is
to
be
the
safest
workplace
within
the
industries
that
we
are
typically
designated:
the
General
Warehousing
and
Storage
and
Couriers
and
Express
Delivery
Services
industries.

“While
we
still
have
work
to
do,
from
the
beginning
of
2019
to
the
end
of
2022,
even
with
the
addition
of
nearly
900,000
new
employees,
we
saw
our
worldwide
recordable
incident
rate
improve
by
almost
24%
and
our
lost
time
incident
rate
improve
by
53%”.

Amazon
declined
to
comment
on
the
2024
proposal.

Typically,
companies
meet
investors
whose
proposals
receive
wide
support,
however.

“If
investors
feel
unheard,
this
raises
a
governance
red
flag
which
can
spill
over
into
votes
against
board
nominees
or
pay
approval”,
says
Jackie
Cook,
director,
stewardship,
product
strategy
&
development
at
Morningstar
Sustainalytics.

“Companies
definitely
want
to
avoid
this.
But
an
enlightened
board
will
want
to
hear
from
investors,
put
their
position
across
and
also
learn”.

Why
are
Amazon
Workers’
Rights
on
the
Ballot?

According
to
Tulipshare,
in
2022,
there
were
38,609
total
recordable
injuries
at
the
company,
with
95%
of
those
being
serious
enough
to
leave
workers
unable
to
perform
their
regular
job
functions
or
forced
to
miss
work
entirely.

“Recent
developments,
including
ongoing
investigations
by
the
US
Department
of
Labor,
US
Department
of
Justice,
and
the
US
Senate
Health,
Education,
Labor,
and
Pensions
(HELP)
Committee
have
highlighted
underreported
injury
rates,
inordinately
high
employee
turnover
rates,
and
productivity
targets
that
jeopardise
the
health
and
safety
of
workers
within
Amazon’s
fulfilment
warehouses,
reinforcing
the
need
for
shareholder
intervention,”
the
filer
said
in
a
press
release.

Why
do
Shareholders
Care
About
Amazon
Workers?

Morningstar

covered
Amazon’s
2023
AGM
and
found
that
the
18
shareholder
proposals
on
the
proxy
card
(up
from
15
in
2022)
covered
a
broad
range
of
environmental,
social,
and
governance
themes.
Four
of
the
resolutions
were
what
Morningstar
calls
“key
resolutions”,
supported
by
more
than
40%
of
independent
shareholders.
Among
them
were:

1.
Freedom
of
association
and
collective
bargaining;
2.
Warehouse
working
conditions;
3.
Customer
use
of
facial
recognition
technology;
and
4.
Customer
due
diligence
on
human
rights.

While
average
adjusted
support
for
the
four
proposals
has
fallen
slightly,
“it
appears
that
many
shareholders
believe
greater
transparency
on
these
matters
is
of
benefit,”
Morningstar
director
of
investment
stewardship
research
Lindsey
Stewart
SAYS.
Average
support
for
environmental
and
social
resolutions
fell
in
2023
as
large
managers

backed
away
from
ballot
items
considered
to
be
highly
prescriptive,
poorly
defined,
or
redundant.

On
why
shareholder
support
dropped
last
year,
Cook
argues
it
is
hard
to
agree
with
the
position
that
it
only,
or
even
primarily,
came
down
to
the
resolutions
themselves,
pointing
to
Morningstar
data
showing
an
average
10%
drop
in
support
for
sustainability-linked
proxy
ballot
measures
(not
counting
measures
put
forward
by
anti-ESG
groups).
Amazon’s
two
worker
rights
resolutions
are
a
case
in
point:
essentially
the
same
ask,
with
no
obvious
improvement
in
the
issue
from
2022
to
2023,
yet
a
substantial
drop
in
support. 

Minority
Support
Doesn’t
Mean
Defeat

With
the
current
voting
structure,
because
Bezos
owns
a
little
under
10%
of
Amazon,
it
is
harder
for
minority
shareholders
to
prevail,
using
the
majority
vote
standard.
Proxy
votes
are
generally
nonbinding,
after
all.
But
shareholder
proposals
help
measure
investor
attitudes
around
key
issues
and
are
essentially
a
barometer
for
management.

“We
believe
it’s
critical
as
a
responsible
investor
to
engage
with
companies
on
ESG
issues,
even
at
controlled
companies,”
says
Emma
Pullman,
chief
stewardship
officer
at
BCGEU
(British
Columbia
General
Employees
Union).

“We
look
to
the
companies
we
invest
in
to
manage
their
human
rights
risks,
address
their
human
rights
impacts
and
provide
adequate
disclosure
as
a
demonstration
of
strong
risk
oversight
and
sound
corporate
governance.

“The
best
outcome
is
that
the
company
agrees
to
the
disclosure
we’ve
asked
for,
and
begins
providing
investors
with
critical
information
on
supplier
audits.
If
not,
we
will
consider
following
up
with
the
company
and
refiling
the
proposal
next
year
if
necessary”.

For
Argouges
of
Tulipshare,
success
means:
“Blackrock
and
Vanguard
supporting
our
resolution
leading
to
a
majority
vote,
ultimately
ensuring
fair
and
safe
working
environments
for
Amazon
warehouse
workers”.

At
the
end
of
the
day,
each
vote
offers
management
teams
insights
into
shareholder
sentiment.
Activist
shareholders
believe
that
if
enough
of
the
minority
shareholders
vote
in
favour
of
a
resolution,
management
and
the
board
will
take
notice
and
effect
change.

Note:
This
article
was
amended
to
update
Tulipshare’s
description

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