The SEC issued the first ever climate-related disclosure rule earlier this week. In the 3-2 vote, commissioners adopted the rule requiring companies to disclose certain-climate related risks. This rule, which has been long awaited by investors, will require companies to disclose material climate-related risks, activities the company is taking to mitigate these risks, the Board oversight to the climate risk and mitigation, climate targets material to the business, as well as scope 1 and scope 2 emissions deemed material by the company, and reasonable attestation.
While this rule has been weakened from the proposed 2022 rule, Seventh Generation Interfaith, Inc. welcomes the final climate disclosure rule and the SEC’s consideration of our comments. SGI formally submitted one of thousands of comment letters with the proposal of the rule in 2022. In fact, the SGI comment letter was cited seven times by the SEC in the final rulemaking. This rulemaking brings the US closer in alignment to its global peers. SGI is committed to playing an active role in creating a more just and sustainable world. Investors have and will continue to seek clear, consistent, and comparable information on how companies are managing their climate- related risks and opportunities.
We are disappointed that Scope 3 emission disclosure was omitted from the final rule as the omission will convey an incomplete picture of companies’ risk exposure. This omission means companies will not have to disclose a category of emissions that account for as much as 80-90% of total emissions in some industries. We hope that companies will provide this information to investors voluntarily. We also believe that companies that choose not to disclose Scope 3 emissions will fall and have already fallen behind peers as it will be required in European reporting requirements under CSRD as well as California’s new disclosure laws. The new rule is a starting point, and higher achieving companies with more robust disclosure will produce greater long term value for shareholders.
The United Nations Climate Summit (COP28), which took place in Dubai, recently ended with a monumental report that still falls short of necessary progress. World leaders, climate experts, at least 1,300 fossil fuel lobbyists, and one CEO of a large fossil fuel company attended the meetings. ExxonMobil CEO, Robert Woods, attended COP28, marking the first time the CEO of a large fossil fuel company attended the meetings. And sure, while Woods said the conversations “put way too much emphasis on getting rid of fossil fuels, oil and gas” and not enough on “dealing with the emissions associated with them,” he at least was still part of the discussions.
The long-awaited and contested COP report recognizes the need for a transition “away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.”
For the first time fossil fuels were explicitly discussed and named as a cause to the climate crisis. While the report’s vague language requires more work to ensure its potential, Mindy Lubber, CEO of Ceres, sums it up nicely:
The agreement comes at an urgent moment. Extreme weather and other climate-related catastrophes are already causing hundreds of billions of dollars in damage each year. The world is at severe risk of far greater challenges as we are on track to miss the 2030 goals of the Paris Agreement and achieve a zero emissions economy in time to prevent catastrophic climate change. At the same time, governments, businesses, and investors have a monumental opportunity to invest in secure, affordable, and reliable clean energy technology that brings enormous economic benefits and job growth.
In addition to the climate talks at COP, other commitments concerning Methane Emissions recently showed some progress.
Methane, a highly potent climate pollutant, that is responsible for approximately one-third of current warming resulting from human activities. While ExxonMobil, the world’s second largest oil refiner, reported making great progress on its methane emissions reduction, the company was only doing so with estimated emissions, not direct measurements. Without measured data, studies have shown that companies may misallocate capital to less impactful and less cost-effective mitigation opportunities.
Immediately before COP 28 ExxonMobil, announced that it was joining OGMP 2.0, the Oil & Gas Methane Partnership. This came as shocking and exciting news after last proxy season. The Sisters of St. Francis of Dubuque, along with co-filers Benedictine Sisters of Mount St. Scholastica, Congregation des Soeurs des Saints Noms de Jesus et de Marie, and Dana Investment Advisors filed a resolution at ExxonMobil asking the company to issue a report analyzing the reliability of its methane emission disclosures. While ExxonMobil’s opposition to the resolution highlighted their participation in OGCI, Global Methane Partnership, and legal hurdles, the resolution garnered an impressive 36% vote.
This announcement of Exxon joining OGMP 2.0 is a huge step forward because under OGMP reporting, better-quality emissions data allows operators to accurately understand and characterize methane emissions from their assets, informing a more effective mitigation strategy.
In addition to ExxonMobil and others joining OGMP in the past few weeks, the EPA released its new methane standards which should help reduce methane emissions. EDF reported on the new rules and how they will help OGMP members comply. There’s been other methane regulation advancements in the EU, China, Australia, and Canada as well.
The COP agreement, Methane regulation, and hopefully new SEC climate disclosure rules in 2024, there is a lot of forward momentum in the climate world. What is needed now is continued corporate action and more climate policy nationally and internationally.
SGI members are continuing engagement on climate crisis issues such as GHG emissions, methane, the Just Transition, science based targets and climate transition action plans, as well as climate lobbying.
There’s still much more work to be done. Next year’s COP is planned to be held in Azerbaijan, one of the birthplaces of the oil industry.
Recently, I had the honor to represent SGI at the Mensuram Bonam Conference hosted by the Pontifical Academy of Social Sciences in Rome. The conference drew about 120 people from around the globe to reflect upon the document and the state of faith-consistent investing. Participants included clergy and religious and lay persons who serve within religious congregations, archdioceses and dioceses, asset advisors and managers, banks, foundations, and faith-based investor coalitions.
Cardinal Peter Turkson addresses the conference.
The conference gathered us a few days after the Vatican’s Synod on Synodality concluded, and so we dialogued, in the synod’s spirit, with deep listening to others alongside a commitment to co-responsibility. The conference aimed to to prompt collaborative learning and reflection on Catholic Social Thought, using Mensuram Bonam as a source and guide in faith-consistent investing. We shared lessons, ongoing questions, best-practices, and dreams. Practically, the conference identified certain future collaborations to advance the faith-consistent investing movement.
As the document nears its first anniversary, Mensuram Bonam increasingly bears greater weight in Catholic investing. For instance, Catholic bishops make an Ad Limina visit to the Holy See every five years. During the visit, they provide written reports and meet with Pope Francis and with the various dicasteries and offices of the Roman Curia. (U.S. Catholic bishops will make their next visit in 2025.) In the visitation to the Pontifical Academy of Social Sciences, Mensuram Bonam is on the agenda.
Further, the climate crisis makes Mensuram Bonam increasingly important. Months after Pope Francis published his 2015 environmental encyclical Laudato Si’, the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement were adopted. Now, eight years later and with the world halfway toward the SDGs’ 2030 deadline and the Paris Agreement’s goal to halve global emissions, Pope Francis renewed the call for urgent climate action in the apostolic exhortation Laudate Deum. Pope Francis underscored that our responses to the climate crisis have been inadequate.
Numerous local churches, especially in the global North, adopted guidelines prior to Mensuram Bonam, and Mensuram Bonam represents the affirmation and on-going development of that work. The U.S. Catholic Conference of Bishops adopted their first socially responsible investment guidelines in 1991, revised them in 2003, and revised them yet again in 2021. German Bishops issued guidelines in 2015 and revised them in 2021 (English translation), Austrian Bishops have had guidelines since 2018 (English translation), and the Italian Bishops Conference issued their guidelines in 2020, among others. During the conference, I came to appreciate how advanced European asset managers are in the practice of ESG. Mensuram Bonam also aims to urge those local churches without them to develop their own guidelines.
Fr. Séamus Finn, O.M.I., Chris Cox, Anna Falkenberg, and Katie McCloskey
ICCR members had a significant role in the conference. Fr. Séamus Finn, O.M.I. was one of the organizers. Mercy Investment Services, Christian Brothers Investment Services (CBIS), and Socially Responsible Investment Coalition (SRIC) also participated. We had ample opportunities to share our experiences, and I felt privileged to share stories from SGI’s fifty years in faith-consistent investing. While the U.S. and Europe were early adopters, led by ICCR and pioneers like Fr. Mike Crosby, O.F.M., Cap., the global South had important interventions in the conference. There were many hopeful signs at the conference. For instance, Italy’s Alessandra Viscovi recently launched an Italian organization modeled on ICCR.
The conference advanced reflection and practice concerning the relationship between faith and finance. Starting from the shared conviction that no investment is morally neutral, participants explored the vocation of investor, inspired to invest in the production of good goods, with a commitment to good work, so that the enterprise of business might yield good wealth.
On September 12th, Seventh Generation Interfaith Coalition for Responsible Investment (SGI) will celebrate fifty years of service for people and planet. Founded in 1973 by pioneers in corporate shareholder engagement, Fr. Michael Crosby, O.F.M., Cap., Sr. Alphonsa Puls, S.S.S.F., and Sr. Charlita Foxhoven, S.S.S.F., SGI members have engaged multinational corporations to promote more sustainable and just practices for five decades.
The 50th Anniversary Celebration will take place at SGI’s annual conference on Tuesday, September 12th, from 4:30 p.m. to 7:30 p.m. at St. Francis Parish, located at 1937 N. Vel R. Phillips Avenue, Milwaukee, WI 53212. There will also be an option to attend virtually.
While recognizing the landmark achievements of the organization under Fr. Crosby and its co-founders, the conference will also focus forward, on how Milwaukee-based SGI is working to shape better outcomes at corporations in the 2020s and beyond.
In addition, Dan Tretow, the member representative for the School Sisters of St. Francis (S.S.S.F.), will receive the 2023 Fr. Mike Crosby Award.
From SGI’s inception, Fr. Mike aided faith groups to ensure their investments reflect their beliefs and values, rather than inadvertently funding activities that conflict with those values. While smaller faith groups face particular obstacles given the complexity and challenges of investing, SGI has proven to be low cost and efficient as members implement faith-consistent investing with limited resources. SGI was the first coalition to join ICCR to enhance its shareholder advocacy for systemic change.
SGI’s 50-year track record promoting environmental and social corporate responsibility and facilitating values-aligned investing spans many of the most urgent environmental and social issues facing people today, including climate change, economic inequality, racial justice, workplace diversity, political spending and lobbying disclosure, and executive compensation.
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.
Tomorrow, August 16th, marks the one year anniversary since the passing of the Inflation Reduction Act 2022 (IRA). The legislation provides authorization for Medicare to negotiate directly with drug manufacturers to bring down the price of ten high-cost prescription drugs for the benefit of seniors covered by Medicare.
Prescription drugs have assumed an increasingly important role in American health care, a trend likely to continue. One study estimates that “[p]rescription drug spending on retail and non-retail drugs is poised to grow 63% from 2020 to 2030, reaching $917 billion dollars” (p. 2).
In the 2023 proxy season, a national coalition of long term, faith and values-based investors, who are members of the Interfaith Center on Corporate Responsibility (ICCR), filed resolutions with five major pharmaceutical companies, with a brand new ask: a report on the process that pharmaceutical companies use to determine whether to apply for a secondary or tertiary patent, intended to qualitatively verify if promoting access for patients, was a relevant factor in this process.
This resolution received 31.1% of investors’ support at the Merck AGM held on May 23rd 2023. The resolution secured 30% of the vote at Pfizer; 16.5% of the vote at Gilead, 14.42% at Johnson & Johnson. Just a few weeks later, on June 6th, 2023, Merck & Co. Inc. filed a lawsuit against the Department of Health & Human services (HHS) and Centers for Medicare and Medicaid Services (CMS), alleging “extortion” and a violation of their 1st and 4th amendment rights, in respect to the proposed negotiations of drug prices, on behalf of seniors covered under Medicare, as legislated under the Inflation Reduction Act 2022. Bristol Myers Squibb (BMY) followed with a similar lawsuit. Both companies are represented by the law firm, Jones Day. Lawsuits have been filed by Astellas and Johnson & Johnson in other jurisdictions. As well, the U.S. Chamber of Commerce and the trade association Pharmaceutical Research and Manufacturers of America (PhRMA) have filed suits with similar claims.
“Patients continue to suffer as prescription drug manufacturers jack up prices and rake in billions in profits,” the letter said. “We have yet to see the USPTO take substantial steps to exercise its existing administrative authorities to help lower drug prices, encourage competition, and increase innovation.”
A Thicket of Lawsuits
The lawsuits that Merck and the others have opted to file serve to fuel the controversy and fail to address the underlying concerns for equitable business decisions that serve the public who need access to these life saving drugs. Pharmaceutical companies have had a long run of putting their profit above all else, and this unregulated behavior has not served the patient, the taxpayer, seniors or any member of the public who is uninsured, underinsured and/or has an insurance company disallow a claim to secure access to the prohibitively expensive drugs, even though these drugs may save an individual’s life. While innovation was intended to save lives, the profit motive instead has rendered access to life saving drugs a luxury for those who are rich enough to afford them.
Here are the hard truths:
Pharmaceutical companies have benefitted from federal research and development tax credits, on the grounds that they require investment for innovation to develop life saving drugs. Over time and due to the adherence to free market economic theories, buttressed by failures to regulate the business conduct of these pharmaceutical companies, they have business standards and processes that serve their profit motive without due consideration of how patients can secure their access to gain the innovative benefits of these patented drugs.
These same pharmaceutical companies have engaged in lobbying to keep their profits healthy and growing, while they continue to pocket the federal tax credits and “covet” the research of the National Institute of Health (NIH), all paid for by the very same taxpayers they now litigate and have been lobbying against over decades.
The allegation that negotiating drug prices for ten drugs yet to be named, for the benefit of seniors covered under Medicare, is “extortion”, exposes the singular profit motive of the leaders and management teams of these pharmaceutical companies.
Lawsuits are expensive and contentious and they run afoul of the values statement of every pharmaceutical company in respect to their mission of serving the needs of patients, with their innovative medicines and vaccines.
The claims in the lawsuits are explosive and tactically crafted in response to the politics of the day and accusations of profiteering and gaming the patent system levied by both the Republicans and Democrats in oversight committee hearings.
The legal claim seeking an injunction is frivolous, premature and may be an abuse of the legal system, since no loss or damage has been sustained by Merck or BMY, nor is there any continuing loss and/or damage being sustained by these companies or any other party to the litigation, which is the only basis for a claim for an injunction.
The claim that the IRA requirement to negotiate drug prices is a violation of Merck’s and BMY’s 1st and 4th amendment rights, adds insult to injury, since these lucrative and highly profitable pharmaceutical corporations have unfettered rights to unilaterally fix drug prices and to extend their patent exclusive periods, unfairly preserving their monopoly.
Given the news coverage exposing the reality of patent thickets and how the pharmaceutical companies are gaming the patent system, the lawsuit filed by Merck and BMY is tone deaf to public sentiment and dismissive of public wellbeing, and, as investors, we urge pharmaceutical companies to refrain from filing lawsuits that do not address the public right to healthcare, that do not address the underlying concerns over the unaffordable prices of life saving drugs and that do not align with their own Mission and Values statements to serve the benefit, interest, wellbeing and life of the patient.
As part of our series on remembering Fr. Mike Crosby and Celebrating 50 years of SGI, we wanted to highlight the histories and growth of all of the CRIs.
The Socially Responsible Investment Coalition (SRIC) began as a dream of Sr. Francis Lorene Lange CDP in 1974. She believed that a Coalition for Responsible Investment (CRI) could be started in this region. She had worked with Fr. Mike Crosby OFM Cap to found a Texas group to work with Interfaith Center on Corporate Responsibility (ICCR). The seed was planted but did not sprout until 1982.
Texas CRI was founded in 1982 with a number of religious congregations: Congregation of Divine Providence, Missionary Catechists of Divine Providence, School Sisters of Notre Dame, Sisters of Charity of the Incarnate Word—San Antonio, Texas, Missionary Oblates of Mary Immaculate, Sisters of the Sacred Heart of Jesus, Benedictine Sisters—Boerne, Texas, The Society of St. Teresa of Jesus, Sisters of Charity of the Incarnate Word—Houston, Texas, and Congregation of the Holy Spirit. By 1997, Texas CRI officially changed its name to the Socially Responsible Investment Coalition (SRIC). Since that time, SRIC has grown to 19 Institutional and Associate members and a number of individual members. We continue to work to bring about responsible corporate behavior through the power of shareholder resolutions as well as corporate dialogues.
In the early years, members participated in various shareholder initiatives that included the boycott of Campbell’s Soup and Nestlé’s products and actions to end apartheid in South Africa. SRIC members documented working conditions, environmental contamination, and community issues surrounding Maquiladoras located at U.S./Mexico border. Members also raised questions with Houston Industries regarding the safety of the South Texas Nuclear Project and with DuPont and Chevron about their practices and clean-up of uranium mines.
For 40 years, as faith and values–based investors, we have a long history of shareholder advocacy on socially responsible issues as we prompt companies to act on positive outcomes for society. Some of our many SRIC initiatives include: addressing environmental pollution; advocating for state-wide Medicaid expansion; working on sustainable mining issues in Ghana, Colombia and Peru with the Faith Reflections Initiative. We have also worked nationally to generate awareness of human and sex trafficking in hotels during several Super Bowls and have spoken out on negative environmental and health impacts of fracking and methane emissions in oil and gas production. As we look towards the future, we will continue to engage corporations encouraging them to adopt more ethical and sustainable business practices and address their impacts on people and the planet.
Since 1982, SRIC has been a member of Interfaith Center on Corporate Responsibility (ICCR). Currently, we are collaborating with ICCR members to focus on advancing worker justice, human rights, climate crisis, access to medicine, nutrition insecurity, responsible banking and finance, environmental justice and corporate governance
Thank you to Ruben Lopez and Anna Falkenberg for sharing this history with us!
We are grateful to Andrew Behar, CEO of As You Sow, who has shared this excerpt from his 2016 book, The Shareholder Action Guide, for our series remembering Fr. Mike Crosby and fifty years of SGI.
It goes without saying that a chorus requires more than one voice, so allying yourself with an existing community of like-minded people has obvious advantages. For years, churches and faith-based organizations have been very active in issues of social justice, and those issues have often touched upon corporate behavior. It was through his religious order that Reverend Michael Crosby took on the tobacco industry starting in the 1970s.
Reverend Crosby probably doesn’t fit the expected profile of a shareholder advocate. He’s a Catholic priest at the Province of St. Joseph of the Capuchin Order. In the late 1970s, Crosby was visiting Nicaragua, where his order had a mission, and he couldn’t help but notice how the countryside was plastered with billboards extolling the glories of the revolution and its leader, Daniel Ortega. “I had kind of a distinct reaction,” Crosby said. “How can people be so influenced by such propaganda?”
Soon after his visit to Nicaragua, Crosby was at another mission in Costa Rica. The road to the airport there was lined with billboards, too, but these were quite different. “One billboard after another advertised this and that, and a huge number were cigarettes,” said Crosby, a recovering three-pack-a-day smoker.
The billboards in both countries touted different things, but the campaigns were similar. “All of a sudden it hit me that both were propaganda. In the United States and throughout the world in the market economy, it’s ‘buy, buy, buy.’ What is the difference between one revolution and the other?”
Crosby decided to start something of a revolution of his own. When he returned to the United States, he asked his treasurer to buy ten shares of R.J. Reynolds Tobacco and ten shares of Philip Morris. The small ownership stake was enough to give the order standing to attend the corporations’ next annual general meetings and to file shareholder resolutions if necessary.
When he studied the demographics of smoking, it became clear to Crosby that the majority of smokers begin the habit when they were in their teenage years—just as he had. Father Crosby refined his focus and efforts on addressing the impact that cigarette advertising had on young people.
The Marlboro Man, the peppy models for Virginia Slims with their slogan “You’ve come a long way, baby,” and the defiant Tareyton smokers who would rather fight than switch, were arguably created by Madison Avenue “Mad Men” in the 1960s to appeal to adults.
But what about Joe Camel, the lovable cartoon dromedary who touted R.J. Reynolds’s Camel brand in magazine and billboard ads? Created in 1974 and first used in French ad campaigns, Joe Camel appeared in the United States starting in 1988. Although he lacked a hump, Joe Camel had attitude to spare, and he had lots of leisure time, too. He rode a motorcycle, played pool, and hung out in a hot tub with bikini-clad babes. In short, he did everything an adolescent boy longed to do. Oh, and a Camel cigarette always dangled from his lip.
Talk about swagger. Did he have a face that could pretty easily be confused with parts of the male anatomy? Would advertisers stoop so low? It’s a matter of debate. Google “Joe Camel images” (as we could not get the rights to publish a picture of Joe in this book), and you decide.
Of course, only a cynic would suggest that Joe Camel’s mission was to recruit younger smokers to take the place of the ones dying by the thousands of lung cancer and emphysema.
Crosby focused particularly on R.J. Reynolds, and unfortunately for them, the barrage of publicity, lawsuits, and the shareholder resolution brought by Crosby’s group and by others brought a lot of attention to the matter of youth smoking, including a 1991 study in the Journal of the American Medical Association that showed that as many six-year-olds knew that Joe Camel was linked to tobacco as knew that Mickey Mouse was tied to Disney.
R.J. Reynolds doesn’t inspire the same affection as Disney, and Crosby had it out for Joe Camel, just as he would for a drug dealer hanging around the candy store.
“We generated a tremendous amount of publicity about Joe Camel and its appeal to youth,” said Crosby. “Ultimately, we were one of the voices that got Reynolds to stop. Then we found out they were doing it abroad, and so we filed shareholder actions internationally, and they stopped. That was a big campaign with a significant result.”
Crosby’s campaign against the detrimental health effects of tobacco continues to the present day and has included shareholder resolutions, negotiations, public demonstrations, legal action, political lobbying, and more. Crosby’s order has gone on to file numerous resolutions on the issue of green tobacco sickness, human rights, and the exploitation of workers. It turns out there’s a strong association between youth viewing characters in movies who smoke and their own initiation of smoking. So Crosby and ICCR, along with As You Sow, initiated a shareholder engagement to get Hollywood studios to give an “R” rating to all movies with smoking imagery—a practice that would save 1,000,000 lives, according to a 2012 Surgeon General report and backed up with CDC data.i
By Cathy Rowan, Director of Socially Responsible Investments for Trinity Health
In celebrating SGI’s 50th Anniversary, I am grateful for the years of working with and learning from one of your founders, Rev. Mike Crosby.
In the mid-1990s, when I began participating in the ICCR conferences, I did not know Mike well, but knew him as the person who was always busy typing during the meetings. He produced extensive summaries of all the conference sessions, for the benefit of all the regional coalitions for responsible investment. No one had asked him to do that; it was one of his many ways of faithfully serving others.
Tobacco is a priority issue for Trinity Health, for whom I started working in 2003, and Mike helped and welcomed me in engaging tobacco companies, working to change their marketing practices – with a vision of ultimately transforming those companies to stop selling cigarettes – and in engaging the parent companies of movie studios, to eliminate the depiction of tobacco in youth-rated films.
Mike’s own past experience as a smoker, his sensitivity to the overwhelming marketing of cigarettes to recruit new smokers, plus his faith that does justice were what drew him to take on the issue of tobacco and corporate responsibility.
His work was often questioned by those involved in the tobacco control movement: “Why would you engage with tobacco companies?” His reply: “Why wouldn’t you?”
Mike’s thinking was that if one person’s life could be saved, if one young person decided not to start smoking because the dangers of secondhand smoke were attended to, and incessant marketing to young people was stopped (e.g. Joe Camel or via the portrayal of smoking in movies), he had to engage the companies as a shareholder.
What impact has his work had? Well, for one, we no longer see Joe Camel ads. His efforts to stop the advertising, marketing and selling of cigarettes using the terms ‘light’ or ‘ultra-light’ contributed to the Food and Drug Administration’s 2010 rule banning the use of ‘light’, ‘mild’ and ‘low’ on cigarette packaging. All the parent companies of major studios have policies to limit the depiction of tobacco in youth-rated films, with Disney banning tobacco depictions in all its movies.
Mike’s shareholder advocacy was grounded in human rights. His concerns around tobacco extended to the working, living and health conditions of tobacco farmworkers. He heard about green tobacco sickness – which can occur when farmworkers absorb nicotine through the skin as they come into contact with the leaves of the tobacco plant, causing nausea, vomiting, headaches, dizziness – from Sisters in Kentucky for whom he was giving a retreat. He took the issue to the Altria CEO, who said he never heard of this occupational poisoning.
His initiative led to all the major tobacco companies adopting polices that take into account the health and the working conditions of farmworkers. The resolutions Mike crafted around human rights led to the creation of a multi-stakeholder effort, the Farm Labor Practices Group — companies, labor, government and investors – working to promote worker and human rights in agriculture.
Mike witnessed to Life before an industry whose products produce so much sickness and death. We will never know how many lives have been saved – thanks to his decades of shareholder advocacy.
He is still mentoring me, and cheering us all on as we continue his work.
This reflection is part of a series to observe SGI’s 50th anniversary. On September 12, 2023 Seventh Generation Interfaith Coalition for Responsible Investment (SGI-CRI) will hold its annual conference. This year’s theme is Celebrating 50 Years: The Evolution of Responsible Investing. Learn more here.
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:
Court Sentences Florida Labor Contractor To Nearly 10 Years In Prison In Case Involving Forced Labor, Part Of US Department Of Labor Investigation(US Department of Labor, 2/2/23 – criminal conviction against H-2A LC.) “Los Villatoros Harvesting LLC employed workers to harvest watermelons for Carlton Farms Inc., operating as Sun Fresh Farms Inc. in Wauchula, Florida, for sale to Walmart and Kroger locations. In Indiana, the employer provided crews for Cardinal Farms in Oaktown and Wonning Melons in Vincennes to pack melons for sale through a distributor to chains including Kroger, Schnucks and Sam’s Clubs.”
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.
Seventh Generation Interfaith Coalition for Responsible Investing 