Political and lobbying activities should be consistent with a company’s purpose and strategic objectives. Investors need reassurance that the expenditures and activities made to or with a third-party organisation are aligned with the stated public policy positions of the companies of which they are shareholders.
We have engaged with Pfizer on enhancing transparency around its trade associations since 2019. Although Pfizer had improved its transparency on lobbying and political activity, it faced significant pressure to explain its engagement with trade associations in instances where public policy objectives may differ from its own.
Since then, we have supported several shareholder proposals over the years requesting a report on lobbying payments and policies. In 2020, the company acknowledged our concerns and those raised by other investors on the topic, and indicated its plan to update its disclosures later in 2020
In December 2021, the company published its industry Associations – Report on Incongruencies¹, a gap analysis detailing the alignment of its public policy positions with the positions of its most significant trade associations across six areas of key public policy and ESG significance for the company.
The company monitors where and to what extent itself and its trade associations are misaligned on these issues and, where possible, engages with the trade association to facilitate alignment. The report also states that if an organisation’s misalignment is egregious, and the membership benefits to the company and its stakeholders are outweighed by the misalignments, it will reduce or end its involvement with the organisation.
At least annually, the company’s US government relations team provides the board’s governance & sustainability committee with a report regarding the company’s public policies activities, including an overview of the benefits derived from the company’s association with certain trade and other organisations.
We continue to encourage Pfizer to expand upon this publication by disclosing the threshold where it might consider leaving a trade association due to misalignment and lack of engagement progress. In addition, access to medicine and mitigating antimicrobial resistance are two further topics of engagement with Pfizer.