Author: Chris Cox

Dan Tretow to receive SGI’s 2023 Fr. Mike Crosby Award

Dan Tretow to receive SGI’s 2023 Fr. Mike Crosby Award

Chris Cox

The Board of Seventh Generation Interfaith Coalition for Responsible Investment is pleased to announce that Dan Tretow, the member representative for the School Sisters of St. Francis (S.S.S.F.), has been selected to receive the 2023 Fr. Mike Crosby Award. The award will be presented in a reception at the SGI conference on September 12th. The Fr. Mike Crosby Award recognizes a person who has promoted a more just and sustainable world and exemplifies the passion and commitment of our founder, Michael Crosby, O.F.M., Cap.

“We are delighted to honor Dan Tretow,” said SGI Board Chair Cindy Bohlen.  “Dan was instrumental in helping SGI become a member-led organization. As SGI’s second board president, Dan’s leadership enabled SGI to build capacity and empower its members toward fulfilling its mission to build a more just and sustainable world for those most vulnerable by integrating social and environmental values into corporate and investor actions.”

“Dan took time out from his day job to be on our first Board of Directors and served as our Treasurer in 2015,” said Frank Sherman, previous executive director. “He stepped up again in 2018 to become our President at a critical time in SGI’s development. I came to rely on Dan for his experience and patience; but it is his deep faith and warm friendship that I appreciate the most. Brother Mike will be pleased to see that Dan won this award presented in his name. Congratulations, my friend!”

“It has been a pleasure and gift to work with Dan over my years with SGI. He is often among the first to recognize and lift up the good work done by others to support SGI, and he quietly supports the organization in a myriad of ways,” said SGI executive director Chris Cox. “Now, we get to return the favor as we recognize his deep contributions to SGI. We are grateful for Dan’s generosity and the 50-year legacy of the School Sisters of St. Francis with SGI.”

Dan has been the member representative for the School Sisters of St. Francis and worked with the Wisconsin Coalition and its successor organizations, now SGI, since the early 80’s.  His longest standing work in CRI involves the members working with a Wisconsin corporation on human rights, executive pay and supply chain sustainability.  Dan was a founding SGI board member and held the offices of Treasurer and President.  Amid questions about the future of SGI following Fr. Mike’s untimely death, Dan was instrumental in repositioning our coalition to the member-led organization that it is today.  Dan works for the School Sisters of St. Francis – Generalate as Director of Financial Services and St. Joseph Center Facility Director.

SGI was founded in 1973 by Fr. Michael Crosby, O.F.M., Cap., Sr. Alphonsa Puls, S.S.S.F., and Sr. Charlita Foxhoven, S.S.S.F., who were pioneers in corporate shareholder engagement.

Please join us in congratulating Dan.

2023 TIP Report cites the weaknesses of social audits

2023 TIP Report cites the weaknesses of social audits

Chris Cox

Last week, the U.S. State Department issued the 2023 Trafficking in Persons Report. This annual report is a critical tool to monitor and assess efforts to eliminate human trafficking. As investors, we expect companies, in the course of their human rights due diligence, to act based on the report’s identification of salient risks to people in their operations and supply chain. In her message at the beginning of the report, Ambassador Cindy Dyer wrote:

Getting ahead of the traffickers requires us—governments, civil society, front-line workers, and the private sector—to harness advanced tools and to forge new relationships.  Effective partnerships manifest the power to transform anti-trafficking efforts from prevention to protection to prosecution.

Message from the Ambassador-at-Large, 2023 Trafficking in Persons Report
2023 Trafficking in Persons Report Launch

One of the more insightful commentaries on the new TIP Report comes from Martina E. Vandenberg, founder and president of The Human Trafficking Legal Center. In the coming days and weeks, we’ll see more analysis and commentary, but I’d like to highlight one innovation in this year’s report: a section entitled “Deceiving the Watchdogs: How Unscrupulous Manufacturers Conceal Forced Labor and Other Labor Abuses” (pp 50-52). This section highlights the limits of supply chain social audits conducted by companies and third-party providers. The report identifies “a cottage industry” to help factories “pass” the audits by falsifying records, concealing passport retention, and manipulating workers, among other tactics. Among the nine recommendations proposed in the report, six point toward worker-led social responsibility. A more substantive human rights due diligence, I believe, captures the spirit of “partnership” called for by Ambassador Cindy Dyer.

When SGI members talk with companies about their human rights due diligence, most companies trumpet their codes of conduct. Those documents herald a “zero tolerance” for forced labor, prison labor, and child labor. The codes outline a regime of factory social audits to document compliance. The companies may even lift up the silence in reports from their grievance mechanism as proof of their success. For years, we have been telling companies that these are not adequate measures. Those measures exist to protect the company, but additional measures are required to protect people in the supply chain. Companies need to “pay attention,” as attention is owed to people who are endangered. A code of conduct and social audits are necessary but insufficient for human rights due diligence.

That reliance on social audits is insufficient to protect rights holders ought to be self-evident based on front-page news. Operation Blooming Onion uncovered dozens of trafficked persons in criminal acts that reaped more than $200 million. Other recent events, just in the U.S., include:

W e have seen how child labor cases have increased significantly in the United States over the past five years. A recent investigation by the New York Times found children working exhausting and often highly dangerous jobs across the United States in violation of child labor laws.

Simply put, a company that performs worker-focused human rights due diligence shows that it better understands social-related risks and opportunities in general and the extent to which it is equipped to identify and manage these issues more effectively than a company that relies on its code of conduct and social audits. Too many companies continue to rely on this discredited approach, and workers pay the price as companies cling to an ineffective model that fails to protect human rights. Worker voice plays a critical role in addressing supply chain abuses, as exemplified in the success of the Fair Food Program and the International Accord.

We are glad that the 2023 TIP Report joins the chorus of those calling for a worker-centered human rights due diligence.

As always, the largest component of the report is a series of country-by-country technical assessments. The report categorizes 188 countries and territories with regard to their compliance with the standards of the Trafficking Victims Protection Act (TVPA) of 2000. Each country is tiered according to compliance:

  • Tier 1: those governments who fully comply with the TVPA’s minimum standards
  • Tier 2: while not fully complying, governments with significant efforts to bring themselves into compliance with those standards
  • Tier 2 watch list: not fully complying along with a significant absolute number of trafficking victims, or a failure to increase efforts, or a determination that the country is in fact committed to making significant progress in the coming year
  • Tier 3: those governments who do not fully comply with the minimum standards and are not making significant efforts to do so
  • Special cases: countries where a civil or humanitarian crisis makes gaining information difficult

Tier 1, which includes the United States, is simply compliance with the minimum standards. A tier 3 designation means that the U.S. can restrict assistance or withdraw support for the country at global funding organizations like the International Monetary Fund.

The report includes a country by country analysis of human trafficking and intends to offer “homework” to governments based on their tier. The image above lists the countries of the tier 2 watch list, tier 3, and special case categories.

To read about a previous year’s TIP Report, please see the 2021 edition here, 2020 edition here, and the 2019 here.

Building Investor Support for a Just and Equitable Energy Transition

Building Investor Support for a Just and Equitable Energy Transition

Chris Cox

SGI hosted a webinar on the Just Transition on Wednesday, May 17th. We were delighted that ICCR’s Mary Hiebert joined us along with SGI board members Tom Content and Sr. Pegge Boehm, P.B.V.M. Mary offered an overview of the just transition, a look at some of the measures, and highlighted ICCR’s efforts in this area. Tom spoke to his work on behalf of rate payers with the Citizens’ Utility Board of Wisconsin, Supporting a Just & Equitable Energy Transition. Sr. Pegge spoke to the perspective of a “Faith-ful Stockholder.”

We are so very grateful to our presenters who shared with us from their wisdom and experience.

Some resources that might be helpful to deepen awareness and understanding:

Slides are available here. The video is available here.

Too Many Companies Remain Complicit in Russia’s War

Too Many Companies Remain Complicit in Russia’s War

Chris Cox

One year ago today, Russia launched an invasion of Ukraine. Appropriately, today’s headlines report the devastating consequences in lives lost and displaced persons. There have been somewhere around 300,000 military and civilian deaths, and the conflict has generated an additional 8,087,952 Ukrainian refugees living abroad and millions more displaced within the country. The Ukrainian government database of crimes of aggression and war crimes committed by the Russian military ended the week at 71,321, according to this tweet. The gruesome tally underscores both the severe and systemic nature of Russia’s violations of international law and the severe risks for companies that have operations and relationships in the country.

The war’s devastating impact affects many more countries. As Ukraine is a breadbasket for grains, the war has undermined global food security. The war spiked global energy costs, exacerbating an existing energy crisis.

At the same time, the hostilities prompted new strategies for coordinating and targeting international sanctions that have been swift and significant. Even today, the U.S. and allies introduced new sanctions. As well, on this anniversary, Russia became the first country ever to be expelled from Financial Action Task Force, an intergovernmental body that sets anti-money-laundering law standards

An element that needs more attention is the ongoing collaboration by global companies with the Russian aggressors. Their denials aside, those companies still operating in Russia are materially involved in the Russian war effort as they comply with the terms of Russia’s mobilization law. This article from B4Ukraine offers additional data points and analysis, and it draws a firm conclusion:

“Threats to profits and portfolios, but most importantly to the Ukrainian people, lead to one inevitable conclusion for businesses – to end all operations and business relationships with the Russian government or risk being complicit in its crimes.”

In light of the severe risks endemic to conflict, the UN Business and Human Rights Working Group developed a tool for that due diligence, published last June: Heightened Due Diligence for Business in Conflict-Affected Contexts: A Guide. As mandatory due diligence legislation continues its advance in the European Union, alongside a growing body of international jurisprudence, investors can no longer ignore geopolitical risks associated with autocracy, military aggression, and corruption.

The war confirms that investors need to improve human rights due diligence processes. Given Russia’s human rights history over recent decades, some investors preempted this foreseeable issue. Other investors belatedly found that companies had undue exposure to Russia. At the outset of the war, SGI called for companies to conduct heightened due diligence to ensure that their activities do not support the Russian war effort.  As well, SGI joined a coalition of investors who quickly condemned the act of aggression and called on companies to undertake heightened human rights due diligence. That coalition letter, and other efforts where SGI has participated, have received critical support from our colleagues at the Heartland Initiative. With their support, SGI has joined letters and dialogues with technology and finance firms about risks associated with their operations in Russia.

Sadly, those calls have gone unheeded in many quarters. New data shows that companies’ responses fall far short of what is required under international frameworks, like the UN Guiding Principles on Business and Human Rights. A new report, Unfinished Business, based on data from the Kyiv School of Economics examining 3,078 multinationals found that 56% (1,717 companies) which had ties to Russia at the start of the war continue to do business with the country. The data also showed that: 

“Of the companies that had a local Russian subsidiary at the start of the full-scale invasion of Ukraine, only one in ten has completed the liquidation or sale of its Russian business. 

“The remaining companies paid at least $18 billion in taxes to Russia in 2021 — enough to fund Russia’s war against Ukraine for two months.” 

(Credit: B4Ukraine)

Our keynoter from last fall’s conference, Bennett Freeman wrote about these concerns in a recent article for the Business and Human Rights Resource Centre. He concludes with an observation and a question:

“This tragic anniversary challenges the remaining foreign companies still operating in Russia to leave. At the same time, will a new geopolitical corporate responsibility take shape – and take action – in time to help fortify the battered remnants of the international rules-based order?”

A year ago, CEOs of global companies offered statements against the war. On this sad anniversary, we want to call companies to prioritize actions over words. Companies like Procter & Gamble, Mondelez, Nestle, Baker Hughes, Schlumberger, and Johnson & Johnson would do well to heed the words of Benjamin Franklin: “He that lieth down with dogs shall rise up with fleas.”

SGI hosts a Lobbying Disclosure and Lobbying Alignment Webinar

SGI hosts a Lobbying Disclosure and Lobbying Alignment Webinar

Chris Cox

Companies invest billions of dollars in political influence through lobbying, campaign contributions, and other means. Corporations are societally chartered institutions of enormous importance and value, creating jobs, producing goods and services that consumers rely upon, impact the environment we live in and pay salaries to worker who hope to lead fulfilling lives. At the same time, corporations spend vastly greater sums on lobbying than the funds available to pro-consumer, pro-environment, and pro-worker organizations. Hence, we consider this an important, basic area of corporate governance, and adequate disclosure of corporate lobbying remains a pressing shareholder proposal topic.

SGI members filed or co-filed 12 proposals related to lobbying for the 2023 proxy season. Over the last few years, resolutions have moved from beyond basic disclosure to reporting on alignment and misalignment between a company’s stated position and the lobbying efforts that a company funds indirectly via trade associations,  501(c)(4) social welfare nonprofits, and 527 political organizations, often referred to as “dark money.” Those reports are important as the reveal the risks of lobbying misalignment.

To dig deeper into these themes, we hosted Tim Smith, senior policy advisor at ICCR, and John Keenan, Corporate Governance Analyst for Capital Strategies for the American Federation of State, County and Municipal Employees (AFSCME), for a webinar on Lobbying Disclosure and Lobbying Alignment.

The webinar also points investors to valuable resources concerning lobbying:

We are grateful for Tim Smith and John Keenan joining us. We want to thank all of our members and guests for attending our webinar.

Slides are available here. The video is available here.

Join SGI for a Webinar on Lobbing Disclosure and Alignment

Join SGI for a Webinar on Lobbing Disclosure and Alignment

Chris Cox

Join us for our first webinar of 2023 on Wednesday, February 15th, at 10:00 a.m. Central. We will address efforts for increased lobbying disclosure. Similar to previous years, SGI members filed or co-filed a dozen resolutions that pertain to lobbying disclosure and lobbying alignment. Joining us will be Tim Smith, newly returning to the ICCR staff, and John Keenan, of AFSCME. Register for the webinar here. 

Why is this important? Visit any company’s website. Take a look at the company’s existing disclosures and assess:

  • Do they currently provide you with a clear idea of how and where the company is lobbying, to what end and with what efficacy, and how those activities are aligned with your interests?
  • Could you cite a number that represents how much the company has spent on influencing public policy, directly or indirectly, and with what partners, and on what issues?
  • Beyond its activities in the US, do you have a clear understanding of how the company attempts to impact policies in non-US jurisdictions?

Corporations are societally chartered institutions of enormous importance and value, creating jobs, producing goods and services that consumers rely upon, impact the environment we live in and pay salaries to worker who hope to lead fulfilling lives. At the same time, corporations spend vastly greater sums on lobbying than the funds available to pro-consumer, pro-environment, and pro-worker organizations. Hence, we consider this an important, basic area of corporate governance, and, in this webinar, we are going to dig into these engagements and resolutions.

Again, please, join us!

Amplifying the Voices of Indigenous Peoples

Amplifying the Voices of Indigenous Peoples

Chris Cox

A number of SGI members have long histories of working amid indigenous peoples. In this webinar, we offer a modest goal: we explore how we might stand with indigenous peoples and amplify their concerns in our engagements with portfolio companies. We were joined by Kate Finn (Executive Director, First Peoples Worldwide), Keith Doxtator (Trust Enrollments Director of the Oneida Nation), and Steven Heim (Managing Director for Boston Common Asset Management).

Our very name, Seventh Generation Interfaith, is an homage to the Great Law of the Iroquois. The planet faces an existential crisis, and Indigenous people have been talking about it, planning for it, fighting against it, and organizing around it since the beginnings of colonial settlement around the world. Most non-Indigenous people don’t have this long-term perspective—nor the many-centuries-old knowledge of natural cycles, and what to do to manage these and modify human practices when needed to get back into balance with the natural world.

We see today’s webinar as a step in a conversation or connection to a much bigger story. The best way to acknowledge the place where we live and work is to know and appreciate it. We encourage our SGI members to trace and celebrate their own connections to land and water and get to know the local indigenous history of sustainable, resilient human presence in this and other places. We should know the nearby native nations and encourage work toward reconciliation where land has been taken and culture erased.

If you are not a member of the Investors & Indigenous Peoples Working Group and would like to learn more about joining IIPWG, please email [email protected]. The IIPWG invites investors to join its monthly calls. As well, the Group serves as a clearinghouse for education, news, and joint action to bridge and bring together Native and Non-Native communities on issues related to sustainable and responsible investing.

We’ll also remind you that tomorrow (November 17th) the IIPWG hosts a webinar on Indigenous Peoples, Biodiversity and Sustainable Finance. You can register for the webinar here.

We want to thank all of our members and guests for attending our webinar.

Slides are available here. The video is available here.

Thanks for joining us for the 2022 Conference

Thanks for joining us for the 2022 Conference

Chris Cox

On October 11, 2022 Seventh Generation Interfaith Coalition for Responsible Investment (SGI-CRI) held its annual conference at Fox Point Lutheran Church, as well as with an option to attend virtually.

Good stewardship requires posing and answering difficult questions, especially concerning business activities in conflict-affected and high-risk areas where the risks are highest to people and planet and portfolios. The World Bank estimates that two-thirds of the world’s poor will live in such areas by 2030, while Russia’s invasion of Ukraine, the military coup in Myanmar, and forced labor in the XUAR of China make this an urgent and compelling topic now. It is up to investors and companies to respond to these systemic risks with systemic solutions, putting conflict-sensitive policies and practices into place. With our guests, we delved into those issues.

This year’s theme was Corporate Human Rights Due Diligence in Conflict-Affected and High-Risk Areas. Business and human rights leader Bennett Freeman opened the event with a keynote speech followed by an expert panel discussion. Chris Cox, our associate director, moderated the panel with:

A video of the full conference can be found here. The event program can be found here.

As well, Frank Sherman received the Fr. Mike Crosby Award at the conference reception.

SGI is very grateful to all of our sponsors of this year’s conference.