Q&A: LEAP Student Fellow Thomas Peterson ’26 Explains How Shareholders Can Push For Sustainability
Thomas Peterson ’26 is a second-year student at Yale Law School, where he is also a Student Fellow with the Law, Environment & Animals Program (LEAP) , a research assistant with LEAP’s Climate Change and Animal Agriculture Litigation Initiative, and co-chair of the Yale Environmental Law Association.
Prior to law school, Peterson worked in climate-related shareholder advocacy at the nonprofit As You Sow and at Green Century Capital Management, where he led shareholder proposals calling on some of the world’s largest oil and gas companies, agribusinesses, retailers, and banks to reduce their environmental impact. His achievements included majority-supported shareholder proposals focused on climate and deforestation at companies like Costco and Home Depot, and his comments on corporate climate action have appeared in the Wall Street Journal and Reuters and on CBS News. Before this work, he was an organizer on campaigns to support environmental legislation. He graduated summa cum laude and Phi Beta Kappa from Harvard University and was a postgraduate Williams-Lodge Scholar at the Sorbonne Nouvelle.
Peterson discusses shareholder advocacy as a tool for pushing companies to address greenhouse gas (GHG) emissions from industrial animal agriculture.
What is shareholder advocacy? How did you become interested in this work?
Shareholder advocacy is a bit of an inartful term, but it essentially describes investors using their power to influence companies to change their behavior, generally in service of environmental or social goals. While the similar term “shareholder activism” sometimes denotes a purely pecuniary focus, investors who are interested in leveraging their power for social change or environmental benefit have used “shareholder advocacy” as an alternative descriptor. Shareholder advocates worldwide are increasingly focused on pressing companies to address climate change and biodiversity loss.
The primary source of leverage in shareholder advocacy is the shareholder proposal. Shareholders in publicly traded companies have a right to present proposals at corporate annual meetings asking companies to take action, such as reducing their GHG [greenhouse gas] emissions. All of a company’s investors will see a proposal and the company's response, and will then vote on the proposal. Companies generally prefer to avoid votes on proposals, and often an investor’s best strategy is negotiating to withdraw the proposal in exchange for commitments from the company to address the underlying concern. If proposals do face an investor vote, substantial shareholder support sends a powerful signal and often elicits a meaningful response from the company, though even a majority-supported proposal is not legally binding.
I became interested in shareholder advocacy while I was working as an organizer on a campaign focused on protecting incentives for solar in Arkansas, which were under threat of repeal from the Arkansas State Legislature. I saw how much influence Walmart wielded over Arkansas state legislators: the company’s support for solar was critical in defeating the repeal effort. It seemed clear to me that influencing corporate behavior could be one of the most effective ways to impact environmental policymaking.
At the same time, I was learning more about efforts to leverage investor power to push corporations on climate change. For example, that spring, a hedge fund called Engine No. 1 ran a successful campaign to replace several of ExxonMobil’s corporate directors, at least partly because of the company’s failure to address its climate impact. It seemed like there was a lot of good work to be done on addressing climate change through shareholder advocacy.
Your work focuses on encouraging companies in the animal agriculture supply chain to account for or decrease their climate emissions. Why is shareholder advocacy a useful tool in this context?
Some of the work I did before law school focused on getting companies in the food value chain to adopt emissions reduction targets. For a while now, there’s been significant effort to get companies in all sectors to adopt GHG emissions reduction targets, but attention to food and agriculture has been somewhat lagging. When I worked in that space, I led a couple of shareholder proposals focused on pushing food retailers, distributors, and producers to set those targets. There's still education needed in the financial sector about the extent to which agriculture contributes to climate change, which was part of the function of those proposals.
Most large, publicly traded companies in the food system, particularly consumer-facing companies, now have targets saying that they're going to reduce emissions dramatically, for example, a 30-50% reduction by 2030 and net-zero by 2050. Whether you're talking about McDonald's, Tyson Foods, or JBS, companies throughout the food system are making these kinds of claims. The issue when it comes to animal agriculture — specifically for companies in the beef value chain — is that the path to reaching those goals absent some shift away from beef and to alternative proteins is just not credible: that's the core issue I'm trying to point out. These companies are announcing aggressive targets to decarbonize both their operations and value chains, so the targets cover not only their Scope 1 and 2 emissions, but also Scope 3. [Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain.] But there is no clear pathway to zeroing out emissions associated with beef production, and many companies are not explaining how they're going to reduce those emissions specifically. That's a place where shareholder advocacy can play a key role because companies are saying that they're on this trajectory but have not offered credible explanations to investors of how they're going to get there. This becomes all the more salient in light of recent lawsuits against JBS and Tyson alleging that their climate targets are misleading, principally because these companies have no plans to move away from beef production and cattle emissions cannot easily be eliminated.
These issues cascade through the value chain. Fast food restaurants and food retailers have Scope 3 GHG reduction goals that rely on the credibility of their suppliers’ GHG reduction goals. If fast food chains using Tyson and JBS as suppliers are saying they're slashing their upstream Scope 3 emissions based on Tyson’s and JBS’s targets, but Tyson and JBS are putting out misleading information, fast food chains’ statements may be misleading as well.
Can you share an example of a shareholder proposal you’ve worked on?
One proposal I worked on before law school asked the wholesaler Costco to reduce its full scope GHG emissions. When the proposal was filed in 2021, Costco lagged its peers in setting clear GHG reduction targets. Costco sells lots of things but is primarily a food retailer: at the time, food represented more than 50% of its net sales. Costco is one of the largest retailers in the world by revenue and therefore has a major presence in food sales globally. We thought it was a good opportunity to continue the conversation about how the food system—starting with consumer-facing retailers—can decarbonize.
The proposal called on Costco to set science-based, net-zero aligned GHG reduction targets covering Scope 1, 2, and 3 emissions. The proposal was very explicit about including Scope 3 because that's where the whole game is for a food retailer like Costco — 90% or more of its emissions are in Scope 3, much of that from its food supply chain. Beef is the highest-emitting food commodity, so those emissions play a big role for Costco as well. Costco was not receptive to negotiating over the terms of the proposal, so we brought the proposal to a vote. We got a pretty remarkable result: At Costco's January 2022 annual meeting, our proposal received 70% of the shareholder vote, which made major news because it was one of the first times that a proposal focused on food system emissions and calling explicitly for a Scope 3 target had received that kind of support. The proposal got investors to pay more attention to the emissions associated with food production.
Shareholder advocacy is a good way to make change on the margin, but it's not a strategy that will fundamentally solve systemic problems.”
— Thomas Peterson ’26
What, if any, obstacles do you see impeding shareholder advocacy actions?
There are a number. Over the last several years, there's been a heavily publicized backlash to environmental-, social-, and governance-focused investing — “ESG” investing — in the United States. This has impacted major asset managers’ willingness to vote for climate-related shareholder proposals and has reduced the vote percentages that these proposals receive.
With that said, and particularly in the absence of adequate policy, shareholder advocacy is still a good way to push markets to think about climate change and to educate investors about its impacts and major contributors. There's an educational function that these proposals can have in explaining the agriculture sector’s contributions to GHG emissions, highlighting that animal products are a particular problem, and arguing that companies need to address these issues.
Shareholder advocacy is a good way to make change on the margin, but it's not a strategy that will fundamentally solve systemic problems, especially because company action is generally voluntary. You can push companies to do better and they will sometimes make changes in response. That has a measurable impact on the world, because these corporate actors are powerful. Moreover, shareholder advocacy can often happen much faster than legislative policy change. It's less durable and more subject to a company's whim, but if you get a major company to agree to reduce its environmental impact or improve its treatment of animals, that can have ripple effects. A common strategy in shareholder advocacy is to start by engaging with a company that's going to be a first mover because, for example, it is particularly sensitive to its public image or has branded itself as sustainable. If you can encourage that company through a proposal and it makes the first change, investors and customers may say to competing companies: “One of your peers has done this, why aren't you doing the same?”
To what extent, if at all, have your views on shareholder advocacy as a tool for creating a more sustainable food future shifted since coming to Yale?
I do fear that shareholder advocacy is becoming less effective, in part because there's diminishing willingness among asset managers to vote for these proposals. We've heard from large asset managers —whose votes ultimately determine whether or not proposals get majority support — that they're increasingly uncomfortable with telling portfolio companies to reduce their emissions, even though most large asset managers have said that they plan to align their investments with a transition to net zero.
I have some concerns about how viable shareholder advocacy will be going forward, but I've also garnered new appreciation for its virtues compared to other strategies. Impact litigation takes a long time and has highly uncertain outcomes, while passing new statutes and promulgating regulations is a long and complicated process that requires a whole constellation of factors to come together in the right way at the right time. So I maintain a belief in the importance of using these corporate accountability levers because they have different advantages. I've gained a better understanding of how all these things can work together since coming to Yale.
My participation in LEAP and the Climate Change & Animal Agriculture Litigation Initiative has also clarified the importance of pressing animal agriculture companies on the credibly of their climate commitments. Many companies in this sector are saying that their goal is to be on a net-zero trajectory, but they're not talking about reducing production of high-emitting animal products. That tension needs to be addressed, and shareholder advocacy efforts create a useful forum for that conversation.
