Sisters of St. Francis of Assisi Rejoin SGI

SGI is in the midst of welcoming new members. We will features some brief profiles of them so that the broader membership has an opportunity to welcome them. Our first new member is really a member who rejoins us. The Sisters of Sr. Francis of Assisi have been members of SGI through many years. The membership lapsed a few years back, and, now, we are delighted to renew our collaboration!

Jill & Steven Haberman, the community’s Justice and Peace Animators, share the following:

The Sisters of St. Francis of Assisi is a community of women religious with a 172-year history of acting on Franciscan Christian values in the world. Trusting in God’s providence, the sisters strive to live the Gospel by nurturing a deep sense of the worth of every person and of all creation. They have a longstanding commitment to social justice action and socially responsible investing. Their relationship with SGI has its roots in Irene Senn’s work with Fr. Mike Crosby. We are delighted to rejoin this collaboration!

As the current Justice and Peace Animators, we are the SGI member contacts for our congregation. We are new to the role, having spent years as middle and high school Catholic educators, including mission teaching on the Texas/Mexico border and in Appalachian Kentucky. Steven also worked for three years against the death penalty in Texas. Social justice is always close to our hearts.

Areas of action we would like to focus include anti-racism, human trafficking, care of creation, and immigration. Thank you for making us feel so welcome; we look forward to working with this dynamic group.

We offer a hearty welcome to the Sisters of St. Francis as we continue our collaboration in building a more just and sustainable world!

Pay and Wealth Disparity: Still our greatest social challenge

By Frank Sherman

Sister Sue Ernster’s (Franciscan Sisters of Perpetual Adoration) proposal on racial equity & starting pay at the Walmart AGM earlier this week obtained strong shareholder support for a first-time resolution (12.5% of total shares or 27% of independent shares voted). Congratulations to Sue and the many ICCR co-filers.

I’m reminded of Father Mike Crosby’s 2015 campaign on income disparity. At that time, President Obama called the growing pay & wealth gap in our country “the greatest social challenge of our time“…. and it hasn’t gotten better since then. We didn’t get very far back then after the SEC’s sided with the companies, permitting them to omit our proposal from the proxy based on the “ordinary business” exclusion.

Starting in 2011, the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 required companies to include disclosure of the total compensation of the top 5 paid executives in their annual proxy statements. Shareholders are allowed to cast a non-binding advisory vote for or against these pay packages (“say-on-pay”). Very few companies “failed” their say-on-pay vote in recent years. A failure occurs if the company does not obtain majority support from shareholders for the executive compensation proposal.

The tide may be shifting. Twice as many say-on-pay proposals failed this year as in previous years, including some companies that had never had a failure in these resolutions. As You Sow’s Rosanna Landis Weaver does great work digging through the fine print of the “Compensation Discussion and Analysis” section of each company’s proxy statement with an annual report on the 100 Most Overpaid CEOs. A recent NEI article on CEO compensation (A Promising Start To The Challenge Of Excessive CEO Pay) notes that support for pay packages among S&P 500 firms fell to an average of 87%, down 3 percentage points from 2020 and 2019, and down 4 points from 2016 to 2018. It references a report from the Institute for Policy Studies (Pandemic Pay Plunder: Low-Wage Workers Lost Hours, Jobs, and Lives. Their Employers Bent the Rules – to Pump up CEO Paychecks) which found that 51 of the S&P 500 firms with the lowest median worker wage revised their pay rules in 2020, so that median worker pay fell 2%, while CEO pay rose—by 29%.

Investors pushed corporations to tie their pay packages to stock performance (…to better align management pay with investor returns) in the early ’90s. Little did they know that this would be used by companies to successively ratchet up CEO, and as a result, the rest of management’s, comp packages every year to a level that makes U.S. CEOs stand out on the global stage.

The Dodd–Frank Act also required companies to disclose the ratio of CEO compensation to the median compensation of their employees. The rule has only been in effect since 2017, but the SEC allows companies “substantial flexibility” in the calculation of the ratio, making it difficult for investors and society to make meaningful comparisons.

Of course, CEO’s know that their pay relative to the median pay of their workers is out of control. But even if they wanted to change this (and I’m not sure many “want” to do so), they are reluctant to be a first mover on restructuring pay because it would “negatively impact retention and make them less competitive”.

As we complete the next draft of SGI’s strategic plan and think about our engagement focus for the 2022 season (which starts this summer), I believe pay disparity has to be high on our list. I hope you concur.

FSPA begins compensation project as it joins the Fight for $15

By Sister Sue Ernster, Vice President & Treasurer/CFO, FSPA


In appreciation of our valued partners in mission and in support of the actions of ICCR, SGI and Raise the Wage Act of 2021, FSPA has partnered with Wipfli consultants to begin a compensation project that will ultimately raise our organization’s minimum wage to $15 in 2021. 

According to the Franciscan Sisters of Perpetual Adoration (FSPA) Leadership Team, “This isn’t just about economic justice. We recognize our partners in mission serving on staff are gold. We’re advocating for livable wages and we want it to start at home. We’re investing in our partners as they help us carry forward our mission.” The FSPA Merged HR Team note that all wages are evaluated annually, which will continue after the new minimum wage is in place.

FSPA stands with ICCR calling on the federal government to “implement a mandatory minimum wage of at least $15 per hour as a floor, with an eye towards establishing a living wage standard.” ICCR’s 300-plus faith and values-based institutional investors view the management of their investments as a catalyst for social change. In addition, the Leadership Conference of Women Religious Region 9, of which FSPA is a part of, is also advocating for living wages. This is in line with Pope Francis’ Easter message of solidarity with movements that support workers’ dignity through changing economic structures, including consideration of a universal basic wage.  

As our compensation project and advocacy for a living wage intersects with our commitment to unveil our white privilege. Throughout 2021, guided by our Dismantling FSPA Racism Team, we will work to raise awareness of our participation in systemic racism, analyze our congregation’s anti-racist vision and act authentically for racial equity.

FSPA recently took the lead in advocating for racial and economic justice by filing a shareholder resolution (see our exempt solicitation) with Walmart, calling for a higher starting wage — intersecting our compensation project and advocacy with our 2018 commitment to unveil white privilege. Walmart’s low starting wages are not aligned with the its professed values of respect for the individual and promoting healthy communities or its commitment to sustainability. Boosting wages for the lowest paid employees, which are disproportionately people of color, would advance Walmart’s stated commitment to racial justice. Remedying systemic racism provides everyone with tangible benefits. Wages are the most important element of employee compensation, according to Walmart Associates, and the negative effects of lower wages undermine their ability to serve the customer.

Our community is also growing our impact investing. Our 2020 Seeding a Legacy of Healing initiative will usher in a second round of seeding grants including the Apis & Heritage Capital Partners, whose mission  is to attack the racial wealth gap to restore dignity and status to the American Worker. A second investment in the Religious Communities Impact Fund will benefit the economically poor, especially women and children, concentrating on those who are unserved or poorly served through traditional financial sources.

As Pope Francis says in Evangelii Gaudium (The Joy of the Gospel), “The dignity of each human person and the pursuit of the common good are concerns which ought to shape all economic policies” (#203). The dignity of each person can be recognized through fair wages.

SGI Joins Business Leaders In Calling For Aggressive Climate Targets

By Frank Sherman

President Biden will host 40 world leaders next week in a virtual Leaders Summit on Climate to galvanize support to tackle climate change. Having rejoined the Paris Climate Agreement on his first day in office, Biden wants to retake global leadership of this existential issue to underscore the urgency and economic benefits of stronger climate action.

Before the Leaders Summit, the Biden Administration will announce a new U.S. Nationally Determined Contribution (NDC), an emissions reduction target for 2030. Upon signing the Paris Agreement in 2015, each of the 190 participating countries submitted their initial NDC. President Obama pledged to cut U.S. emissions by 26-28% below 2005 levels by 2025. We are currently less than halfway to our original goal. Under Paris, countries are expected to submit updated commitments every five years.

Today, the We Mean Business Coalition announced that 310 businesses and investors, including Google, McDonalds, Walmart, CalSTRS……and Seventh Generation Interfaith, have signed an open letter to President Biden indicating our support for nearly doubling the emission reduction targets set by the Obama administration. This is consistent with the Intergovernmental Panel on Climate Change (IPCC) conclusion that, to have any chance of limiting temperature rise to 1.5˚C, global emissions must fall at least 50 percent by 2030. Corporate executives called the 50% reduction target “ambitious and attainable.”

For SGI, the decision to sign is fairly straight-forward. The COVID-19 pandemic and racial justice concerns may have overshadowed the climate crisis in the news much of last year, but the climate crisis will continue its march as the 21st century’s most dangerous and intractable threat. Hence, SGI members continue to engage companies to address the risks and opportunities of the warming planet.

Business leaders’ decision to break with Republicans in the post-Trump era follows similar moves on voting rights and racial justice. They risk further alienating Republicans by pressing Biden to aggressively combat climate change. But they also recognize the risks and the benefits posed by the climate crisis. In a counter argument to the fossil fuel narrative that climate action will cost jobs and raise energy costs, Patrick Flynn, vice president of sustainability for Salesforce, which signed on to the letter, said he hopes businesses will lobby Congress to support the Biden administration’s target. “We know it will create millions of jobs, we know it’s a good thing for the economy, and we know if we do it right we can do it in a way that leaves no one behind” (NYT, April 13, 2021).

These are historic times. When your grandchildren ask you someday in the future… “where were you when these decisions were being made?,” you’ll be able to tell them that you were on the right side of history.

Investor Engagement by a Novice

By Judy Sinnwell, OSF Dubuque

A year after retiring to Mount St. Francis in July 2015, the president of our congregation asked if I would facilitate the formation of what came to be the Sisters of St. Francis-Dubuque SRI Working Group. My previous ministry experience was elementary education-administration, adult formation, licensed health practitioner and after-school tutoring in the rural south. Saying ‘yes’ acknowledged that the topic would be interesting and that the ‘working’ part of the label would have me personally engaged in a significantly new arena addressing life’s meaning and purpose.

And so it has! Especially in recent years, as active ownership has effectively increased its voice and influence in the investment arena. Belonging to a faith- and values-based investor coalition, Seventh Generation Interfaith based in Milwaukee, provided education, professional resources, and mentoring in this important work, which for the Dubuque Franciscans, is a way of keeping our congregational mission alive.

One thing I became aware of in those first years was the annual general meeting, the AGM, which a company has for shareholders to weigh in on important company matters. Being a co-owner enabled me to file a shareholder resolution, challenging the company to make improvements in its governance, environmental and social practices. It seemed to be the right thing to do when we had the chance; but at times, it felt a bit intimidating. Recently, that was my experience as a co-filer on a resolution presented at the Tyson Food Inc. annual meeting.

The resolution asked for human rights due diligence in Tyson’s meat packing sites across the country. Iowa has several Tyson sites; one is in Waterloo, where Rath Packing Co. once had a positive reputation and provided a level of economic mobility for Blacks who migrated from the South until it was shut down in 1985. Learning about workers’ conditions during the COVID pandemic in Tyson’s Waterloo plant, where our congregation provided staff at two elementary and a central high school, became a concern and made this an obvious focus of our shareholder action.

When the resolution was made public and the AGM date was nearing, Investor Advocacy for Social Justice (a sister coalition to SGI) began to build awareness among the press and all shareholders who would have a proxy vote on the proposal during the meeting. Reporters from the Des Moines Register and Reuters contacted me for comment, specifically interested in the fact that ‘nuns’ were engaged with a national company; and the Iowa connection because of the negative news that had been previously reported about the Iowa Tyson site and COVID. Their news coverage educated readers about the broad impact of shareholder action. Each request also made me very aware that this experience was not something I anticipated when I agreed to facilitate a group investment effort five years previous!

Was it worth it? Definitely! Yes! Taking the chance to be the voice for marginalized sisters and brothers had to be done. It’s who we are as Dubuque Franciscans. And it stretched me. The support of faith-based and value-based organizations like SGI and IASJ made this possible as an investor. It’s what the world needs right now as one way to reclaim the commitment to the common good and the dignity of the individual person in the economic arena.

Thanksgiving Blessings and Prayers for Those Without

After reading this morning’s headlines (“Dow Cracks 30,000 for First Time“), I went for a run. I had heard the 1 minute press conference yesterday where President Trump referred to this milestone as a “sacred number”.

In a contrast that has defined this year, I listened to the NYT The Daily podcast: A Day at the Food Pantry during my run. A Times journalist described her visit to a food pantry in Brooklyn a few weeks ago. In pre-Covid days, this pantry served 60 people a week and is now dealing with a line of over a thousand. The journalist interviewed people in line, most of which had never visited a pantry before the pandemic hit. “This is my worst nightmare.” The journalist even shared a bit of her own past, growing up on food stamps and sharing a frozen burrito with her sister. Although painful to listen to, I highly recommend you take the 36 minutes to listen to it. 

The pandemic has exacerbated food insecurity that already existed in the U.S. The crisis has revealed the dysfunction of our food system and how structural inequalities contribute to the growing number of food insecure and hungry across the nation. Job losses from the pandemic overwhelmingly affected women, low-wage earners, and minority workers the most. As a result, one in six adults were food insecure two months into the COVID-19 recession. Feeding America reports that, among children, the projected food insecurity rates for 2020 range from 15% (North Dakota) to 32% (Louisiana and Nevada). You heard that right: one third of the children in the richest country of the world go to bed hungry!

So as I sit down to our Thanksgiving turkey tomorrow, perhaps feeling a little sorry for myself for not being surrounded by our typical family gathering, I will count my blessings and pray for those without.

Happy Thanksgiving to all of you… 

Reflections on the 2020 Election

By Frank Sherman

Like many in this country, I was glued to the TV and cell phone last week waiting to hear the final outcome of the most contentious election in modern history. I volunteered for the first time at a polling location on the south side of Milwaukee to see Americans turned out in record numbers to vote in the midst of the worst pandemic in the last century.

Shortly after the race was called for Biden & Harris on Saturday, ICCR issued a statement saying “We have faced many obstacles and headwinds over the last four years… we must turn the page and get back to work.” Ceres said the election results are a “win for our health, our planet, our economy and our future.” The Catholic Climate Covenant added “the work begins anew to heal together and to work together to protect God’s creation.” I must admit, my heart rate lowered… until Monday morning when reality set in.

The cover article of The Wall Street Journal stated that the election looks like it may yield a “dream scenario for business: a moderate Democratic president whose more aggressive plans can’t pass the Senate, but who eschews the unpredictability that has often marked the Trump administration”. As COVID infections and hospitalizations hit new records this week, and unemployment and food bank lines grow ever bigger, the stark realities facing the next Administration…and us…came back into focus.

So what can we take away from this election? Analyst Bruce Mehlman states that, although President Trump lost for failing to competently manage the pandemic and for sowing excessive chaos and division, House Democrats lost because voters feared too-aggressive ‘socialist’ policies from the Left. We learned that the electorate is not monolithic….and the 72 million Trump voters are not all white nationalists. Many fear that globalization and technology threaten their jobs; their voices aren’t heard by the coastal elitist; and they fundamentally disagree with some policies offered by the Left (e.g. defunding the police, decriminalizing the border, ending fossil fuels, higher taxes).

Our nation remains closely and bitterly divided. Both parties face internal battles over future direction and leadership. Biden is viewed as a transitional leader, hired to manage COVID and bring back civility to our politics. A divided Congress will limit his options. He’s already dismissed      Healthcare For All, the Green New Deal, and a Wealth Tax from the progressive wing of his party. He will now have to rely on executive orders and his regulatory authority to even execute his more moderate agenda.

But there are reasons for hope. Biden is a legislator with a history of finding common ground with Congressional opponents. He is an institutionalist with respect for the people, processes, and      protocol that make government work. The business community recognizes the growing expectations of their stakeholders, asking for them to stand for a higher purpose and to speak out for more inclusive and equitable public policy. The global investor community is demanding corporations to address their environmental and social impacts that haven’t yet appeared on their quarterly earnings statement.

I don’t expect the GOP to suddenly take a knee, like the guards in the Wizard of Oz, to say “All hail Dorothy. The wicked witch is dead!”; no more than I expect Senator Bernie Sanders to invite Senator Mitch McConnell over for Thanksgiving dinner. But as we approach the holiday season, we all can learn from the words of that great and powerful Wizard: “A heart is not judged by how much you love; but by how much you are loved by others.”

SGI Statement of Solidarity

Milwaukee, WI, June 1, 2020: Members of Seventh Generation Interfaith Coalition for Responsible Investment are traumatized and outraged by recent incidents of police brutality in our neighborhoods and cities that manifests individual and institutional racism. We mourn the recent police killings of George Floyd and Breonna Taylor and the murder of Ahmaud Arbery, and stand in solidarity with the victims of systemic racial injustice in the United States. While recent events disclose injustice in law enforcement and our criminal justice system, we recognize that institutional racism exists as well in our corporations, our economy and throughout our society.

We lament that years of protests, demonstrations, and marches have failed to bring an end to the suffering, the dehumanization, the oppression, and the loss of so many precious lives. So many people of color who historically have been disenfranchised continue to experience economic inequities, sadness and pain; a pattern seen as well in the path of the COVID-19 pandemic, disproportionately affecting people of color in the number of cases and fatalities.

We recognize our obligation to work as institutional investors, as citizens, and, most importantly, as people of faith to address and change unjust and immoral cultural patterns and social systems. We commit ourselves to listening to the stories of those subjected to institutionalized racism to more authentically accompany them. Through the lens of faith, we will reform our investment practices and challenge companies to increase diversity and address their negative impacts on people of color. We recommit to building a more just and sustainable world for our brothers and sisters who are most vulnerable.

How did you respond to the Coronavirus pandemic?

By Frank Sherman

As some hard hit cities start to report a slowing of COVID-19 cases and express hope that we’ve indeed reached the much anticipated peak, our federal and state government leaders are struggling with the challenge of reopening the economy. The same debates on balancing public health and economic pain are playing out in corporate boardrooms and at small business owners’ kitchen tables. The slow response and lack of leadership at the federal level has not only shifted decision-making to states and local levels, they force the private sector to face the dilemma of when and how to bring back their employees, supply chains, and customers.

As faith communities, we recognize that the pandemic has put a spotlight on economic inequalities and a fragile social safety net leaving vulnerable communities to bear the economic brunt of the crisis (Human Rights Watch, March 19, 2020). In the U.S., four decades of income and wealth disparity was partly hidden by record low unemployment but is now exposed in unemployment insurance and food pantry lines. While many Americans were already knee-deep in debt pre-pandemic, half of households have no emergency savings at all (WSJ, April 15, 2020). Nearly 30 million children who count on schools for free or low-cost breakfast, lunch, snacks and sometimes dinner are now at home (NPR, March 20, 2020). Thankfully Congress has shifted most of the disaster relief to the workers and individuals this time rather than solely to companies as done in 2009.

As companies start to report their first-quarter financials, the message is clear: this recession is going to be bad! What will be the corporate response to these unprecedented times? The pandemic and impending recession have created an urgent opportunity for CEOs and corporate leaders to put the promise of purpose-driven leadership and stakeholder capitalism into practice (Just Capital).

I certainly noticed a change in the tone and focus of corporate communications, both internal and external. Instead of productivity and new product launches, companies are talking about employee and customer safety, corporate values, and community support. Examples such as Walmart’s enhanced paid sick leave, McDonald’s free meals for students and seniors, GM and Ford retooling auto assembly lines for ventilators (WAPO, April 4, 2020), Amazon prioritizing shipments of medical supplies and household staples (WSJ, March 17, 2020), and Thank You For Not Riding Uber (YouTube, April 8, 2020) appear to be empathetic. The public perception of whether these corporate responses are authentic or ‘COVID washing’ may depend on whether the company was purpose-driven before the crisis.

At the end of the day (…and there will be an end to this crisis), employees, consumers and society in general will ask these companies and their leaders one simple question: How did you respond to the Coronavirus pandemic? And when the corporate marketing machine restarts, let’s hope we have long memories.

The Awakening of a Giant?

By Frank Sherman

Much has been written about socially responsible investing becoming mainstream. US SIF reported two years ago that $1 in every $4 of professionally managed assets in the U.S utilize ESG criteria or shareholder advocacy, a double digit annual increase since the mid-1990s. SRI concerns have also broadened from governance issues (e.g. proxy access, political and lobby spending, executive pay, separate chair) to corporate environmental impact (e.g. sustainability reporting, climate, water) and more recently, social impacts (e.g. human rights, labor rights, diversity).

Another trend in the investment world is the disproportionate growth of passive investing. As open-end and exchange-traded mutual funds managed by large asset managers make up a growing portion of U.S. equity holdings, they take on a growing fiduciary responsibility. When you buy these funds, you transfer your fiduciary responsibility to fund managers to engage companies and vote proxies for you. These long-term and diversified owners have no way to exit a stock, so the only way to influence shareholder value at a portfolio company is through exercising active ownership rights.

Given these trends, it is not surprising to read Morningstar’s recently released proxy voting report stating investor support for ESG resolutions reached a record high in 2019 averaging 29%. This excludes the proposals which were withdrawn based on company agreements. Average support for ESG shareholder resolutions across the 50 fund families analyzed rose from 27% in 2015 to 46% in 2019. However, they found that five of the 10 largest fund families —Vanguard, BlackRock, American Funds, T. Rowe Price, and DFA— voted against more than 88% of ESG-related shareholder resolutions. Their support would have caused 19 of 23 resolutions earning more than 40% support to pass if supported by just one of the largest two asset managers. In response, these fund managers claim to ‘engage companies privately’.

The silver lining highlighted by Morningstar is Blackrock. Recall that two years ago Larry Fink, CEO of BlackRock, the world’s largest asset manager, told CEOs that to sustain financial performance they must “understand the societal impact of your business as well as the ways that broad, structural trends – from slow wage growth to rising automation to climate change – affect your potential for growth”. He went on to say that companies need to engage their stakeholders and if they wait until they receive a proxy proposal to engage, “we believe the opportunity for meaningful dialogue has often already been missed”. This year in BlackRock’s annual letter, Fink stated that climate risk is changing the fundamentals of the financial system. BlackRock would be aligning its investment approach, including how it votes proxies, with sustainability. Fink committed to using proxy voting to advance TCFD- and SASB-aligned financial disclosures and to an unprecedented standard of proxy voting transparency. They demonstrated their seriousness by joining the Climate Action 100+, a global investor initiative which SGI is a member, representing $34 trillion in managed assets, to engage the world’s largest corporate greenhouse gas emitters to take necessary action on climate change.

Morningstar predicted that BlackRock’s “willingness to vote against management would give engagements on sustainability issues more teeth…as corporate management becomes more open to engaging with shareholder proponents”. I remain hopeful…