The chief of UN-backed Principles
for Responsible Investment (PRI) has lashed out at the SEC and corporate lobby
groups for trying to dampen investor rights.

In an opinion piece for the FT
this week, chief executive of the PRI Fiona Reynolds strongly criticised
what she called “powerful countervailing forces” that were attempting to
silence shareholders on matters such as climate change by pressuring corporate
regulators to undermine long-standing shareholder rights.

“These come in the guise of
corporate lobby groups,” she warned. “In the US, they seek to win the day on
climate action with well-funded tactics of delay, obfuscation and denial.

“Nowhere is this more apparent
than in the recent SEC proposals which
represent a substantial setback for responsible investment,” Reynolds added.

Reynolds’ forceful attack follows
the SEC’s proposals to drastically change its proxy adviser and shareholder proposal
voting rules.

Under the proposals, the SEC will increase the number of years a
shareholder must hold a company’s stock before they are eligible
to submit a shareholder proposal.

For the first time since 1954, the
regulator is also pushing to increase the levels of shareholder support that a
proposal must receive to be eligible for resubmission.

In addition, the SEC
wants to make it more difficult for proxy advisers to aid shareholders in their
rightful quest to hold company boards to account.

The regulator’s plethora
of restrictive proposals include making proxy advisory firms supply companies
with advance copies of their advice before it goes to investors.

Companies would be able to review these documents so they
can “identify errors in the proxy voting advice,” it
has dubiously claimed.

Reynolds is adamant these SEC
proposals, if adopted, will have significant international impacts.

“The proposed rules stand in
direct contradiction of the SEC’s stated purpose, to protect investors. They
are in effect a form of corporate voter suppression to disenfranchise
investors who seek to actively engage with companies on ESG matters, climate
risks, sustainability and long-term value creation,” Reynolds stated.

The PRI chief also stated it was
“no coincidence” that some of the business groups named by UK NGO Influence Map as
the most active in negative climate lobbying are also among the loudest voices
urging the SEC to diminish shareholder rights – including the likes of oil
titans ExxonMobil and Chevron.

Last
month, it was revealed that an advocacy group linked to the National Association of Manufacturers
(NAM), whose members include ExxonMobil and Chevron, had sent a number of fake investor
letters to the SEC purporting to be in favour of the regulator’s proxy voting
changes.

The SEC’s head honcho Jay
Clayton was left red-faced after he cited around seven of these dubious letters
at a commission meeting in Washington.

According
to Clayton, the letters were written by ‘ordinary’ investors who were
thoroughly enthused by the SEC’s proposals to overhaul its proxy adviser rules.

However,
a Bloomberg investigation discovered the letters were actually penned by advocacy group
the 60 Plus Association – which is a member of NAM-founded investor group the Main
Street Investors Coalition.

As the SEC awaits public feedback
about its proposals, Reynolds urged investors to speak up against the SEC’s
destructive plans.

“Shareholder engagement and
voting has been critical in improving corporate governance and elevating ESG
issues up the agenda in US companies.

“I encourage investors in the
coming weeks to stand together, weigh in with the Commission and demand that it
puts aside these irresponsible and retrograde proposals,” she said.