BLOG: Shareholders Pressure McDonald's to Report Human Rights Impacts

By Margaret Jungk, Danish Institute for Human Rights and in the UN Working Group on Business and Human Rights.

The resolution was filed by the American Federation of State, County and Municipal Employees Pension Plan, and resolution requests that McDonald's performs what we NGO types call 'human rights due diligence' in their operations, and then make their findings public.

Shareholder resolutions asking companies to think beyond quarterly returns are nothing new. The tactic began with the movement to divest from Apartheid South Africa in the 1980s, when religious institutional investors like the Interfaith Center on Corporate Responsibility started asking where their money was going.

Since then, shareholder resolutions have proliferated, and have pushed companies to improve their environmental practices, appoint women and minorities to their boards and cap executive pay. In the 2000s, they began to increasingly focus on human rights, and just in the last five years, companies have been pressured by investors to adopt board-level Human Rights Committees (Yahoo, Google), conduct human rights impact assessments (Goldcorp) and report their political spending (Halliburton).

According to As You Sow's 2013 Proxy Preview (which is way more interesting than it sounds), this year 21 companies are the targets of human rights-focused shareholder resolutions. Goldman Sachs is being asked to establish a human rights committee. Chevron is asked to make public its criteria for choosing countries. Caterpillar is asked to consider sustainability indicators when determining how much to pay its executives.

So basically this year is no different from all the others: Bleeding-Heart Investor Files Finger-Wagging Resolution. What's so newsworthy about this McDonald's resolution?

Two things: First, this resolution is the first of its kind to ask that a company take action to assess actual human rights impacts. In the past, shareholder resolutions have asked companies to adopt a policy or establish a committee recognizing human rights, but haven't required companies to make sure they're implementing those policies.

Nothing against policy commitments, but they're just a first step. This year's resolution asks McDonald's to go further than producing CEO-signed statements saying it will avoid negative human rights impacts. This resolution asks that the company find out what those impacts are.

Which brings me to the second way this resolution is a step forward. It requires McDonald's to conduct human rights due diligence as defined by the United Nations Guiding Principles on Business and Human Rights.

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