PX14A6G 1 p211211px14a6g.htm






 The Walt Disney Company

Vote FOR: Item #4 – Report on Walt Disney’s Lobbying Expenses

Annual Meeting: March 9, 2021

Contact: Lydia Kuykendal, Director of Shareholder Advocacy, Mercy Investment Services





The proposal is part of an ongoing investor campaign for greater corporate political spending disclosure. Transparency and accountability in corporate spending to influence public policy are in the best interests of Disney shareholders. Without a clear system ensuring accountability, corporate assets can be used to promote public policy objectives which can pose risks Disney’s reputation to the detriment of shareholder value. In the wake of the riots, transparency and accountability of corporate lobbying activities and expenditures are especially important. 


Mercy Investment Services, together with co-filers: Boston Trust Walden; Sisters of St. Francis-Dubuque; Congregation of Sisters of St. Agnes; Franciscan Sisters of Perpetual Adoration; Sisters of the Holy Family, CA; Congregation of St. Joseph; Daughters of Charity-Province of St. Louise; Sisters of St. Francis of Philadelphia; Sisters of Notre Dame de Namur-Boston; Sisters of St. Francis Charitable Trust; and, Needmor Fund, are urging shareholders to vote FOR Proposal 4 at the shareholder meeting on March 9, 2021.




Resolved, the shareholders of Walt Disney Company request the preparation of a report, updated annually, disclosing:


1.Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.


2.Payments by Disney used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.


3.Description of management’s and the Board’s decision-making process and oversight for making payments described above.




Need for Transparency in the Wake of the Capitol Insurrection
After January 6, Disney announced it will not make political contributions in 2021 to lawmakers who voted to reject the certification of the Electoral College votes.1 But the question being asked is whether the changes that companies like Disney have made in response will be simply emergency measures to repair reputational damage, or something more lasting.2



1 https://www.hollywoodreporter.com/news/comcast-att-facebook-suspend-political-contributions-following-capitol-riot

2 https://www.newyorker.com/business/currency/corporate-america-reckons-with-its-role-enabling-trump





Investors are asking companies adopt policies of disclosing the contributions they make to trade associations and other third-party groups that use that money to influence policy.


We believe Disney needs to commit to corporate political responsibility by increasing its lobbying by disclosing all of its third-party spending to influence public policy.


Reputation: Corporate Reputation Is an Important Component of Shareholder Value

·Disney’s failure to provide robust and complete disclosure of its lobbying activities and expenditures exposes it to potential reputational damage.
·According to a Conference Board study, companies with a high reputation rank perform better financially than lower ranked companies. Executives also find it is much harder to recover from a reputational failure than to build and maintain reputation.3
·The 2018 Reputation Dividend Report estimates that “corporate reputation is now directly responsible for an average of 38% of market capitalisation across the FTSE 100 & 250.”4 Furthermore, the Ipsos Global Reputation Centre research across 31 countries shows conclusive proof of the relationship between a good reputation and better business efficiency.5
·A 2014 Deloitte survey found 87 percent of executives rated reputation risk as more important or much more important than other strategic risks their companies are facing, and 88 percent said their companies are explicitly focusing on managing reputation risk.6
·Clearly, corporate reputation has significant impact on shareholder value.


Federal Lobbying – Disney Spends Millions Each Year

·Disney spent $8,910,000 in 2019 and 2020 on federal lobbying activities.
·And from 2010 – 2020, Disney reported spending $42,965,000 on federal lobbying.
·Disney’s federal lobbying efforts have been described as “so effective that the United States changed its copyright law twice, in 1976 and in 1998.”7


State Lobbying – Information on Disney’s Spending Difficult to Obtain

·Obtaining comprehensive state lobbying information is described by an expert as “nearly impossible” given “the ‘Byzantine’ manner in which the data is captured and made available online” which effectively buries information at many states.8
·Disney’s state-level lobbying spending is likely significant. According to a 2017 study that looked at disclosures from the six states with the most robust reporting requirements, Disney spent $3,330,584 lobbying between 2012 and 2015.9



3 “Reputation Risk,” The Conference Board, 2007, p. 6, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1077894.

4 https://www.provokemedia.com/research/article/link-between-corporate-reputation-market-value-strengthens-study

5 https://www.ipsos.com/sites/default/files/ct/publication/documents/2018-05/unlocking_value_of_reputation-may_2018.pdf.

6 “2014 Global Survey on Reputation Risk,” Deloitte, p. 4, https://www2.deloitte.com/content/dam/Deloitte/pl/Documents/Reports/pl_Reputation_Risk_survey_EN.pdf.

7 https://promarket.org/shareholders-at-the-gate-the-increasing-pressure-on-ceos-for-more-transparency/

8 “Wal-Mart Improves Lobbying Disclosure after Shareholder Push,” Reuters, May 13, 2015, https://www.reuters.com/article/us-wal-mart-stores-disclosure-lobbying-e/exclusive-wal-mart-improves-lobbying-disclosure-after-shareholder-push-idUSKBN0NY0AH20150513.

9 Heidi Welsh and Robin Young, “How Leading U.S. Corporations Govern and Spend on State Lobbying,” Sustainable Investments Institute and The Investor Responsibility Research Institute, February 2017, p. 31.





·Disney’s lobbying in Florida has been described as “the 800-pound mouse protecting its cheese in the backrooms of city hall and state government.” And “[i]ts army of representatives give regular input on standard business concerns such as employee wage and benefit issues, worker’s compensation and changes in the Tax Code.” 10
·In Florida, Disney has been lobbying to cut taxes on video streaming services and other technologies in a move that reportedly could cost local governments nearly $200 million a year.11 And Disney lobbied for a state bill to block a successful Orange County ballot measure which would have required employers in the county to offer paid sick leave.12
·In California, Disney has spent over $4 million on lobbying from 2010 – 2020.13


International Lobbying

·Disney also lobbies abroad, reportedly spending between €700,000 – €799,000 on lobbying in Europe for 2019.14


Trade Association Blind Spot

·Corporations make payments to trade associations that are used lobby indirectly on their behalf without specific disclosure or accountability. Trade associations spend hundreds of millions to lobby. For example, the US Chamber of Commerce has spent more than $1.6 billion since 1998.15
·Disney shareholders face a trade association blind spot, as Disney fails to disclose a closed top limit for its trade association payments. Its 2019 trade association disclosure notes Disney belonged to five trade associations which received more than $500,000 in dues. All a reader can tell here is that these organizations received over $500,000. There is no way for a reader to know whether these trade associations received $500,001, $1,000,000 or $10,000,000 in dues. It is also unclear whether this disclosure captures any payments in addition to dues made to trade associations, or the portions of these payments used for lobbying.
·For example, Disney serves on the board of the National Association of Broadcasters, which spent $12,720,000 on lobbying in 2019,16 yet all a reader can tell is that Disney gave this group more than $500,000 and 100 percent of this unknown amount was used for lobbying. And Disney serves on the board of NCTA - The Internet & Television Association, which spent $14,220,000 on lobbying in 2019,17 yet a reader can only tell that Disney gave NCTA more than $500,000 and 25 percent of this amount was used for lobbying.



10 Barbara Liston, “Florida’s Mouse behind the Curtain,” Politico, June 18, 2015, https://www.politico.com/magazine/story/2015/06/what-works-orlando-disney-politics-119167.

11 https://www.orlandosentinel.com/news/os-ne-disney-lobbying-disney-plus-tax-20200129-rczbllax5jf65ig43uatnnzzqy-story.html

12 https://www.orlandoweekly.com/orlando/floridas-local-governments-are-sick-and-tired-of-state-lawmakers-pre-empting-home-rule-and-theyre-starting-to-push-back/Content?oid=26756020

13 http://cal-access.sos.ca.gov/Lobbying/Employers/Detail.aspx?id=1144086&session=2019&view=activity

14 https://lobbyfacts.eu/representative/6fd00451c350435ea410744e2fdd547c/the-walt-disney-company-benelux-bvba

15 https://www.opensecrets.org/federal-lobbying/top-spenders?cycle=a, accessed January 29, 2021.

16 https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000000202&name=National+Assn+of+Broadcasters, accessed January 29, 2021.

17 https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2018&id=D000022131, accessed February 7, 2020.





·And Disney’s trade association disclosure notably leaves out social welfare organizations (501(c)(4) organizations), which can also lobby. For example, the Rule of Law Defense Fund is a social welfare group that helped organize the protest before the riots and is an arm of the Republican Attorneys General Association.18 Shareholders have no way to know if Disney made contributions to the Rule of Law Defense Fund, because Disney fails to provide disclosure of its contributions to social welfare groups.


Climate Change Misalignment

·We believe Disney’s trade association payments used for lobbying could pose reputational risks. For example, Disney signed an agreement to work with United Nations Environment to combat and raise awareness around climate change, yet the Chamber undermined the Paris climate accord. For 2019, Disney paid $250,001-$500,000 in dues to the Chamber, of which 20 percent was used for lobbying.
·Groups are calling on Chamber members like Disney to change the Chamber’s position against science-based climate legislation.19


Reports of Disney Trade Association’s Lobbying

·Disney is a member of the National Restaurant Association (NRA). The NRA has spent millions on the state level over sick leave policies, and the NRA has worked with the controversial American Legislative Exchange Council (ALEC) to stop local measures to enact paid sick leave laws by passing state laws preempting any local measures.20
·Disney is a member of the Florida Chamber of Commerce. Disney’s involvement in leading the Florida Chamber of Commerce to lobby to oppose casino legislation and preserve a controversial tax advantage for Internet-based travel operators has drawn negative scrutiny.21
·Disney also serves on the board of the California Chamber of Commerce.22 The California Chamber of Commerce has attracted media scrutiny for opposing parental leave laws, as has Disney’s role in the group.23


Disney’s Trade Association Ties to Controversial Groups

·The Chamber is a member of the American Legislative Exchange Council (ALEC), serving on its Private Enterprise Advisory Council.24

·ALEC has attracted negative attention for its role in promoting bills that undermine regulations to address issues like climate change, workplace safety and workers’ rights. More recently it has drawn attention for “numerous ties to the Capitol insurrection and Big Lie” challenging the validity of the election results.25



18 https://documented.net/2021/01/republican-attorneys-general-dark-money-group-organized-protest-preceding-capitol-mob-attack/

19 https://www.desmogblog.com/2020/09/29/change-us-chamber-commerce-fossil-fuels-climate

20 “The National Restaurant Association Spends Big to Keep Wages Low,” The Progressive May 14, 2014, https://progressive.org/dispatches/national-restaurant-association-spends-big-keep-wages-low/.

21 “Critics: Disney Has Too Much Influence in Florida Chamber of Commerce,” Orlando Sentinel, October 27, 2011, https://www.orlandosentinel.com/os-xpm-2011-10-27-os-disney-florida-chamber-influence-20111027-story.html.

22 http://advocacy.calchamber.com/board-of-directors/

23 “Family Friendly? Disney Funds Lobbyists Fighting to Deny Americans Parental Leave,” Republic Report, May 29, 2012, https://www.republicreport.org/2012/walt-disney-company-parenta-leave/.

24 https://www.alec.org/group/private-enterprise-advisory-council-2/

25 https://www.exposedbycmd.org/2021/01/27/alecs-numerous-ties-to-the-capitol-insurrection-and-big-lie/





·Even before the riots, ALEC drew negative scrutiny for putting brand reputations at risk when a lawyer associated with it was involved in a phone call President Trump made to Georgia Secretary of State Brad Raffensperger in an attempt to overturn election results.26

·Disney’s major trade associations also support controversial groups like the Competitive Enterprise Institute, a 501(c)(4) social welfare group. CEI is controversial for promoting climate denial.

·For example, in 2019, CEI ran a campaign attacking “Meet the Press,” online and in full-page ads in The Wall Street Journal and The Washington Post, for excluding climate change deniers from its special on the issue. The same year, the National Association of Broadcasters, NCTA and Motion Picture Association — three trade associations Disney contributed over $500,000 to in 2019 and serves on the boards — were listed as sponsors of CEI's annual gala, according to a program from the event obtained by The New York Times.
·The story looking at Disney’s lobbying which highlighted Disney’s trade association connections to CEI noted there is no evidence that Disney has directly contributed to CEI.27
·But here we note that shareholders have no way to know whether or not Disney is giving to groups like CEI because Disney’s disclosure notably leaves out social welfare organizations 501(c)(4) organizations.


Other Companies Are Reporting Significant Lobbying and Public Policy Issues

·Companies have begun producing reports which assess the alignment between company positions, including on climate change, and the positions and lobbying of their key trade associations. Examples of companies producing reports include BP and Shell.
·And Disney uses the Global Reporting Initiative (GRI) for sustainability reporting.
·GRI Standard 415: Public Policy “addresses the topic of public policy. This includes an organization’s participation in the development of public policy, through activities such as lobbying and making financial or in-kind contributions to political parties, politicians, or causes.”
·Under GRI Standard 415, a company “should report:
o(1) the significant issues that are the focus of its participation in public policy development and lobbying;
o(2) the company’s stance on these issues, and any differences between its lobbying positions and any stated policies, goals, or other public positions.”
·This means GRI-reporting companies like Disney should be disclosing the significant issues it lobbies on and any differences between its lobbying positions and its stated polices, goals and public positions.


Broad International Support for Lobbying Transparency

·The International Corporate Governance Network (ICGN) representing more than $18 trillion in assets, supports lobbying disclosure and political disclosure as best practice, and supports disclosure of any amounts over $10,000.28



26 https://www.triplepundit.com/story/2021/reputation-alec-trump-phone-call/709706

27 ”Investors press Disney to reveal more about its lobbying,” E&E News, February 1, 2021, at https://www.eenews.net/climatewire/2021/02/01/stories/1063723963?utm_campaign=edition&utm_medium=email&utm_source=eenews%3Aclimatewire.

28 https://www.icgn.org/sites/default/files/ICGN%20Political%20Lobbying%20%26%20Donations%202017.pdf





·In 2018, the Principles for Responsible Investment (PRI) launched a guide on corporate climate lobbying to help investors engage with companies on their direct and indirect lobbying practices related to climate policy. Specifically, companies should be consistent in their policy engagement in all geographic regions and should ensure any engagement conducted by member trade associations on their behalf or with their support is aligned with a company positions.29
·In October 2018, a $2 trillion coalition of investors led by the Church of England pension board and Swedish pension fund AP7, sent letters to 55 large European companies, stating that lobbying on climate issues should be evaluated, managed and reported on transparently and noting it was unacceptable that companies counteract ambitious climate policy, either directly or through their trade associations.30
·The OECD’s Principles for Transparency and Integrity in Lobbying find that a sound framework for transparency in lobbying is crucial to safeguard the integrity of the public decision-making process.31


Disney Has Its Lobbying Information and Could Easily Report It to Shareholders

·Disney claims that “additional disclosures in this regard would not be an efficient use of resources in light of our existing lobbying policies and disclosures.”
·This arguments is disingenuous, as Disney is required to report its federal and state lobbying, including all indirect lobbying through its trade associations and social welfare groups, and has all of this information, so it could be readily provided to shareholders in a single report at minimal expense.


Political Contributions Disclosure Rankings Do Not Measure Lobbying Disclosure

·The Board argues that Disney has been ranked in the “First Tier” for 2020 and 2019 in the CPA-Zicklin Index of Corporate Political Disclosure and Accountability, a report that measures political disclosure and accountability policies and practices of companies in the S&P 500. However, this argument is misleading since the Company’s CPA-Zicklin ranking has nothing to do with lobbying spending disclosure. The Company conflates electoral and lobbying spending disclosures in its Proxy Statement and implies that both issues are covered in the ranking. The fact that the Company touts being ranked as a trendsetter on the CPA-Zicklin Index, a measurement of transparency in political contributions but not lobbying, suggests that Disney could, in fact, become a leader in lobbying disclosure as well.


Lobbying Transparency: What Gets Disclosed Gets Managed.

·If Disney has nothing to hide, transparent disclosure would simply show that its lobbying is being done for the company and shareholders’ best interests.
·Knowing our company’s lobbying will be disclosed will ensure board and management oversight to safeguard that lobbying is being done in shareholder and Disney’s best interests.



29 https://www.unpri.org/Uploads/g/v/q/PRI_Converging_on_climate_lobbying.pdf

30 “Pension Funds Challenge Major European Emitters on Climate Lobbying,” Church of England, October 29, 2018, https://www.churchofengland.org/more/media-centre/news/pension-funds-challenge-major-european-emitters-climate-lobbying.

31 http://www.oecd.org/gov/ethics/oecdprinciplesfortransparencyandintegrityinlobbying.htm







The well-documented reputational risks of Disney’s lobbying and its inadequate lobbying disclosure policies highlight the critical need for the Company to improve its lobbying disclosures and increase transparency around its lobbying policies, procedures and spending details. For all of the above reasons, we believe that Disney’s current lobbying disclosures are inadequate to protect shareholder interests.


Vote “FOR” on Shareholder Proposal #4, “Report on Walt Disney Company’s Lobbying Expenses” at the annual general meeting on March 9, 2021.