Earlier this week, shareholders of Restaurant Brands International (QSR), the parent company of Tim Horton’s, Popeye’s Louisiana Chicken and Burger King, cast their ballots on two shareholder proposals – one on worker rights, and the other on pollution.
With the pandemic affecting frontline workers at Restaurant Brands, investors and activists were closely watching the vote on worker rights, which ended up with 37% support, up from 25% the previous year. The vote on sustainable packaging garnered 9% support, down from 22% the previous year.
| Number | Title | Category | Support |
| #4 | Report on Minimum Requirements and Standards Related to Workforce Practices | Human and Workers’ Rights | 37% |
| #5 | Policy on Plastic Pollution and Sustainable Packaging | Environment | 9% |
Source: Morningstar Proxy Database. Data as of June 11, 2020
Expected Outcomes
In both cases, the outcomes were expected. With the COVID-19 pandemic and subsequent economic lockdown impacting all frontline workers, there was a significant push to centre worker rights across companies – and Restaurant Brands was no different.
“Shareholders are increasingly recognizing decent work practices as a priority in their ESG agendas. The Covid-19 pandemic has highlighted the importance of decent work practices and human capital management for individual company resilience and our general economic well-being. Many shareholders are also frustrated that the company did not address the same proposal, supported by a majority of independent RBI shareholders in 2019, in any meaningful way. In the intervening year, the company has continued to earn negative public attention for workplace practices by its franchisees,” Anthony Schein, director of shareholder advocacy at SHARE said. Shareholder advocacy group SHARE filed the workforce practices proposal on behalf of the Atkinson Charitable Foundation.
Though the second vote on plastic pollution and sustainable packaging was significantly lower than 2019, this too was expected.
Some Work Has Been Done
Since the previous year’s vote on sustainable packaging, which got 22% support, Restaurant Brands has done some work on addressing shareholder concerns, including articulating a plan to replace plastic straws with energy-efficient alternatives, and replacing one-use foam containers.
This seemed to have satisfied many shareholders, who believe that the company has taken the right step, and therefore did not support the proposal this time around.
“The management has addressed half our concerns, but we want to see more specific and tangible goals for our other concerns, including replacing one-time-use cups with refillable alternatives. At present, the company has committed to doing this over a decade, but we wanted to see a faster timeline. We don’t have a decade,” said Conrad Mackerron, senior vice president at As You Sow, which filed the proposal to develop a comprehensive policy on plastic pollution and sustainable packaging and issue a report to shareholders.
“The vote was expected. We could have withdrawn the proposal, but chose to keep it in to send a message from investors to the management that though they have started work on pollution and sustainability, they need to finish the job,” Mackerron said.
What's Next?
Both SHARE and As You Sow agree that this is one step forward, and now, engagement with the company will continue.
“We look forward to engaging with the company on the issues raised in the shareholder proposal – the need for board-level oversight and accountability for human capital management in corporate and franchise operations,” Schein said, adding that SHARE has successfully worked with other companies like Dollarama (DOL) and McDonald's (MCD) to adopt similar policies in recent months.
As You Sow also intends to continue dialogue with the company, pointing to its successful engagement with Starbucks (SBUX) as an example of the company’s willingness to change. In January 2020, Starbucks agreed to shift from single-use packaging to reusable packaging.
“That is the way forward. Companies like Tim Hortons should issue refillable cups. The customers can hand in their old cups, and the company will serve them their beverages in cleaned and sanitized cups. The customer would pay an initial deposit on the cup, and after that, would not need to pay again,” Mackerron explained.
COVID Could Slow Things Down
With the pandemic still playing out in multiple parts of the world, even as other parts open up and return to a new version of normal, it is unrealistic to expect change at the same pace.
It is unrealistic to expect change at a breakneck pace, especially at this time. Things will slow down, but once the situation around the pandemic starts to stabilize, companies like Restaurant Brands should begin to address these issues.
In the meanwhile, though, shareholders have had their say.
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