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Canadian companies are facing growing investor demands to disclose details about their political activities, with several firms recently promising to start reporting more about their campaign donations and lobbying efforts after receiving shareholder-proxy proposals targeting their annual meetings this spring.

The pressure is coming from activist groups working with large shareholders who have filed proposals with several companies this year seeking more disclosures of lobbying efforts. In three cases – involving Canadian National Railway Co., Goldcorp Inc. and Cenovus Energy Inc. – shareholders withdrew their resolutions after the companies promised to report more details on political activities by the end of this year.

Royal Bank of Canada is still facing a vote in April on a shareholder proposal filed by the Canadian office of global advocacy group SumOfUs, which is targeting companies around the world to report details of their spending on government lobbying campaigns, including indirect lobbying through trade associations.

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The SumOfUs resolution at RBC has received powerful support from North America's largest proxy-advisory firm, Institutional Investors Services Inc., which advises large institutional shareholders on how to vote their shares.

ISS issued a report urging shareholders to vote in favour of the SumOfUs resolution, saying lobbying is important for companies, but also carries reputation risks. ISS said the bank should report on the policies it has in place to manage relationships with the organizations it helps to fund.

"Investor confidence would be enhanced if they know that the companies they invest in have properly recognized this risk and have in place the relevant policies and procedures," ISS said.

RBC recently provided additional disclosure in a document on its web site called "About Governance and Integrity," adding a list of 16 organizations it is involved with that may engage in government lobbying, and to which the bank pays annual membership fees of more than $50,000.

The report says the bank believes active engagement in consultations on public policy "is an important part of responsible corporate citizenship," and said it at all times acts in a manner that "demonstrates respect for democratic institutions."

In its response to shareholders in its proxy circular, the bank said it doesn't believe extra disclosure on lobbying is necessary at this time but it will continue to review the issue.

However, ISS said the bank's reporting does not go far enough because it doesn't reveal how much money it contributes to each organization. ISS said the "magnitude of the expense" helps to indicate "the intensity of the lobbying effort."

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SumOfUs lead campaign strategist Emma Pullman, who is based in Vancouver, said her organization targeted RBC because it is the largest bank in Canada, but will look at filing similar resolutions with other banks next year. She argues shareholders want to know how companies are spending their money to influence the political sphere.

"I think we are going to see a really strong message sent to the bank that shareholders are looking for transparency and accountability," she said.

SumOfUs filed a similar proxy resolution last year with Suncor Energy Inc., which received 40 per cent support. Ms. Pullman said it was a strong result given that shareholder resolutions that are not supported by the company typically get less than 10 per cent support.

The Vancouver-based Shareholder Association for Research & Education (SHARE) led the campaign to file shareholder proposals this year with Cenovus, Goldcorp and CN Rail on behalf of institutional investor clients who hold their shares.

Kevin Thomas, SHARE's director of shareholder engagement, said it is important for many companies to play a role in developing public policy, but they should be transparent about it, "especially when large amounts of time and money are being spent."

Unlike the SumOfUs proposal, however, he said SHARE hasn't asked companies to detail how much money they give each organization, saying it is not an unreasonable request, but wasn't the first reform priority.

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Mr. Thomas said SHARE believes disclosure of membership in other organizations will force companies and their boards to monitor what they are doing more carefully. As well, reporting will allow shareholders to see whether companies are being inconsistent in espousing a position publicly, while also funding an organization that is lobbying against that position.

Cenovus has already provided more information on its lobbying efforts and oversight, and has published a list of organizations to which it pays more than $50,000 annually. The company said Tuesday its disclosures are in line with, or exceed, many of its peers. The company has also decided it will no longer make any contributions to political parties or candidates.

Separately, SumOfUs said it plans to have a representative attendShopify Inc.'s annual meeting later this spring to urge the e-commerce-software company to stop providing the online platform for the store on the Breitbart News website. SumOfUS argues the right-wing news organization publishes articles promoting hatred of various groups of people, and is urging companies to sever their business and advertising relationships.

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