Amazon’s scale means that it has an important influence across employment and health and safety standards within its value chain. EOS at Federated Hermes began engaging with Amazon in 2012, when we informed the company that we were recommending a vote for shareholder proposals seeking better disclosure on climate change and on its political activity and donations.
In our first conversation, we pushed the company to respond to the CDP survey on climate change and questioned its governance and the multitude of directors with connections to the founder. Our engagement dialogue has since covered a number of topics, calling for: an enhanced board composition; an improved sustainability report and carbon-neutrality across its own operations; and other governance improvements.
Subsequent improvements have included the appointment of two directors with experience leading retail and consumer goods companies. Additionally, we now see wider gender and ethnic diversity improvements on the board and at its most senior executive management level.
In line with our engagement, the company has set a deadline of 2040 to become net zero across its operations. We are also pleased to see a ban on executives being able to make hedging transactions against share-based equity awards and the implementation of a clawback policy.
There is still a lot of work to be done, and so we continue to have dialogue with the company in a number of areas. We have welcomed the company’s greater willingness to engage with us and other stakeholders recently. Therefore, we hold a positive outlook on the company’s ability to respond commensurately to the size of the challenges, while remaining a market leader in retail convenience and value.