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… 

Webinar: Fossil Fuels: Engage or Divest

On Monday, November 9th, the U.S. Federal Reserve Bank recognized climate as a risk. Investors of all types can no longer afford to be on auto-pilot concerning investments in fossil fuels. This webinar explores two options: active engagement or divestment. We hear from Rob Berridge and Morgan LaManna of Ceres on how the recommendations of the CA 100+ and the Task Force on Climate-related Financial Disclosures (TCFD) can enhance engagement with companies. We hear from Fr. Peter Bisson, S.J., former provincial of the Canadian Jesuit province. Under his leadership, the province became the first province to divest from fossil fuels shortly after Laudato Si’. Again, we are very grateful for the presence of Rob, Morgan, and Fr. Peter in this webinar, for their commitment to this work, and their generosity in sharing their wisdom and experience with us. As always, we welcome your feedback via a confidential evaluation found here. Slides are available here.

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.”

SEC’s rule changes set back transparency and shareholder voice

Today, the SEC approved in a 3-2 party-line vote new rules that severely restrict shareholders’ access to the corporate proxy by limiting the filing of resolutions. These new rules are a consequence of lobbying by powerful industry trade associations that have sought to limit shareholder engagement with corporations on critical environmental, social, and governance issues.

The shareholder resolution process, governed by the SEC’s Rule 14a-8, has been effective for decades and has allowed smaller shareholders who had held at least $2,000 of shares for over one year to file proposals asking companies to consider non-binding proposals that may raise questions of environmental and social impacts of corporate policies and practices, or governance best practices.

Today’s new rules will significantly limit investors’ ability to submit these proposals. The new rules raise the thresholds of ownership both in terms of the number of shares and length of time they must be held. Under the new rule, new purchasers of stock must hold $25,000 in shares for at least a year, or hold $2,000 in shares for at least three years.

As well, the new rules make it much more difficult to refile a proposal that has been voted on. The prior rule required 3% support on a first-year vote, 6% on a second vote, and 10% on a third vote to keep a proposal before a company’s shareholders. Now resubmission will require 5% on a first vote, 15% on a second vote and 25% on a third vote. Emerging issues will be much more difficult to bring to the proxy.

SGI’s executive director, Frank Sherman said, “The choice to approve the new rule aims to fix something that is not broken. A half-century of evidence shows that shareholders have an important voice that companies need to hear. Pioneers like Fr. Mike Crosby have helped companies pay attention to environmental, social, and governance concerns that they were missing. To the detriment of U.S. companies, this rule restricts that important voice.”

In a press release, ICCR executive director, Josh Zinner said: “The new rule guts the existing shareholder proposal process, which has long served as a cost-effective way for shareholders to communicate their priorities and concerns to management, with little economic analysis supporting the needs for these substantial changes. The new rules appear to be based on a wholly unsupported assumption that shareholder proposals are simply a burden to companies with no benefits for companies or non-proponent investors when there is 50 years of evidence to the contrary.”

Over many decades, the shareholder proposal process has served as an efficient way for corporate management and boards to gain a better understanding of shareholder priorities and concerns, particularly those of longer-term shareholders concerned about the long-term value of the companies that they own.  Engagement by shareholders has served as a crucial “early warning system” for companies to identify emerging risks and there are hundreds of examples of companies changing their policies and practices in light of productive engagement with shareowners.

For more information:

  • ICCR’s press release can be found here.
  • Joint letter from investor groups regarding the shifting interpretation of 14a-8 No-Action Challenges can be found here.
  • Case Studies showing the impact of the new rules on shareholder engagement can be found here.
  • For more information on the history of comments submitted to the SEC regarding these rule changes visit ICCR and Shareholder Rights Group
  • See also SEC’s Proposed New Rules Threaten Shareholder Democracy
  • See as well SGI’s formal comment submission to the SEC here.

Just Transition to Clean Energy: A Virtual Conference

Seventh Generation’s 2020 Conference will look a little different than years past. 

Rather than a member meeting of networking, a panel of speakers on stage, and members, colleagues, educators, investors, advisors, and friends, we’re preparing for a virtual panel discussion, donning the style of a “Brady Bunch” title screen we all have been experiencing these past few months. 

The year, 2020, marks 50 years since the first Earth Day, and we are grappling with the effects of the climate crisis. At present, and in years past, SGI members urge utilities, among other companies, to publish decarbonization plans that meet Science-Based Targets (SBT) aiming to limit global warming to 1.5 degrees celsius. Without corporate action, this is seemingly impossible. Moving towards a low-carbon economy presents new challenges on technology and the workforce.  

This year’s annual conference: Just Transition to Clean Energy will take place virtually on October 12th, 2020. 

Joining us to take on the questions of “what is a Just Transition?,” and “what does it mean for energy providers, employees, consumers, and investors?,” are:

These expert panelists will bring a unique set of experiences and remarks, challenging each other, and us, on the path to achieving a Just Transition. A social issue as much as a technology, climate’s intersection with human work becomes more apparent in the energy sector as the push towards electrification grows. We are lucky to have this great panel lined up for this event, and we look forward to learning all we can from them! 

It would be hard to hold this conference and not mention the impacts of COVID-19 on all those affected. While we hope our virtual conference allows for the inclusion of those previously unable to attend, we hope all are staying safe and healthy amid this pandemic.

If you are interested in attending, and haven’t previously registered, please do so here.

The webinar link and information will be sent out via Eventbrite prior to the conference date. 

Sr. Ruth Geraets, PBVM to receive SGI’s 2020 Fr. Mike Crosby Award

Sr. Ruth Geraets, P.B.V.M.

The Board of Seventh Generation Interfaith coalition is pleased to announce that Sister Ruth Geraets of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, SD has been selected to receive the 2020 Fr. Mike Crosby Award. The award will be presented at the SGI member meeting on October 12. 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 so happy to honor my dear friend Sister Ruth”, said SGI Board Chair Dan Tretow. “She worked closely with the SGI staff and other members in engaging several companies to operate more just and sustainably.”

“Ruth’s dedication to those most vulnerable guides her shareholder advocacy”, added Frank Sherman, SGI Executive Director. “At the same time, her cheerful and gracious attitude creates common ground with corporate management. This is why Sister Ruth has been so effective in her work with companies. Father Mike would be very pleased with this well-deserved recognition.”

Sister Ruth entered the Presentation Convent in August 1961. She earned a Bachelor Degree in Elementary Education and Mathematics at Northern State University and went on to obtain a Masters of Arts Degree in Pastoral Studies from the University of St. Thomas, St. Paul, MN. For 21 years, Sister Ruth taught in Catholic Schools in MN and SD. Her ministry then led her to McDowell County, WV, where she worked with Catholic Community Services serving with those made poor as coal companies were leaving the area. Her compassionate heart led her back to South Dakota where she directed shelters for abused and neglected women and children on the Cheyenne River Reservation. She was Coordinator of Formation and Director of Novices 1999-2011. In January 2008, she was appointed Congregational Treasurer, a position she still holds today.

Sister Ruth became involved with SGI in 2008, serving on the Board for the past 6 years. Her Presentation Congregation has a particular interest in Care of the Earth and the Rights of Women and Children.

Please join us in congratulating Sister Ruth.

Webinar: Positive Screens: Going Beyond the Negative

On Friday, August 21st, SGI’s quarterly webinar addressed adopting positive portfolio screens. Many portfolios rely simply upon negative screens, the exclusion of certain companies from investment consideration based on social or environmental criteria. A negative screen, for instance, can preclude investing in tobacco, gambling, alcohol or weapons manufacturing. John Mueller of Dana Investment Advisors and Ariane de Vienne of Institutional Shareholder Services (ISS) discuss how one might view and implement positive selection criteria from the perspective of the asset manager and the asset owner. Again, we are very grateful for the presence of John and Ariane in this webinar, for their commitment to this work, and their generosity in sharing their wisdom and experience with us. As always, we welcome your feedback via a confidential evaluation found here. Slides are available here.

Chevron Investors Call for Climate Disclosure

This is the first of a series on the 2020 shareholder meetings

Chevron Corp.’s busy annual shareholder meeting this year featured seven shareholder proposals, on topics ranging from lobbying, climate, and human rights. Cindy Bohlen of Riverwater Investments and Mary Minette of Mercy Investment Services co-filed the human rights proposal led by Sister Nora Nash, OSF, asking the company to provide a report on Chevron’s effectiveness to prevent, mitigate, and remedy human rights impacts of its operations. We were pleased to have received a vote of 17% for a first-year proposal. Other proposals were presented to the company during the AGM by notable figures: Alec Baldwin, Roger Waters, and Jody Williams, which focused on governance issues, and pointed to Chevron’s 50-year involvement (through its acquisition of Texaco) in toxic pollution in Ecuador. 

Another resolution focusing on climate lobbying garnered a 53%, majority vote. The proposal asked the Company for a report explaining how it ensures its lobbying activities are aligned with the Paris climate accord and the goal of limiting global warming. This majority vote agrees with the investor push for companies to be more transparent about their lobbying activities, especially through their membership in trade associations. 

Recent news highlights why this resolution, and this vote, are critical for the Company. Amid the Black Lives Matter protests, news reports tie Chevron to a public affairs firm urging journalists to examine how green groups were claiming solidarity with black protesters while backing policies which would “hurt” minority communities. Naomi Oreskes, a Harvard University history professor and the co-author of “Merchants of Doubt” said that it is “remarkable that the Company tried to leverage national unrest about systemic racism and police violence to promote an expansion of oil and gas drilling.” While Chevron has denied the claims of being a part of this campaign, it raises the question of Chevron’s public statements supporting the Paris Agreement, while its lobbying activities send the opposite message. 

Additionally, the District of Columbia filed a lawsuit against Chevron and other oil and gas companies  for “systematically and intentionally misleading” consumers about the role their products play in causing climate change.” This lawsuit is of another way, of many, of which stakeholders are trying to hold the company accountable for its actions. 
SGI members are calling on Chevron and other corporations to respect human rights. As a member of the Business Roundtable, Chevron signed on to the new statement of purpose for corporations to serve all stakeholders. It’s time for Chevron to live up to their rhetoric!

2020 Trafficking in Persons Report

The U.S. State Department today (June 25th) released the latest edition of the Trafficking in Persons Report (TIP Report). (We wrote about the 2019 edition here and 2018 here.)

We are particularly pleased that the 2020 edition recognizes the efforts of ICCR:

The Interfaith Center on Corporate Responsibility (ICCR)
based in the United States uses a multi-faith approach from a
different angle. A coalition of more than 300 global institutional
investors with more than $500 billion in managed assets, it
uses the power of shareholder advocacy to engage companies
to identify, mitigate, and address social and environmental
risks associated with corporate operations, including human
trafficking. ICCR members call on companies they hold to
adopt policies banning human trafficking as a key part of
their core business polices, and to train their personnel and
suppliers to safeguard against these risks throughout their
supply chains. ICCR’s Statement of Principles & Recommended
Practices for Confronting Human Trafficking & Modern Slavery
provides guidance to companies to protect their supply chains
from sex and labor trafficking.

2020 Trafficking in Persons Report (p. 25)

SGI members prioritize this work, and this recognition from the State Department’s Office to Monitor and Combat Trafficking in Persons confirms the efficacy of our efforts with corporations.

David Schilling, ICCR’s senior program director for human rights, said, “Whether it is workers trafficked into forced labor in a factory in Bangladesh or on a plantation in Indonesia; whether it is women trafficked for sex in the US or children exploited on-line, the Interfaith Center on Corporate Responsibility’s members utilize their role as shareholders in a range of companies to promote policies and practices to end modern slavery. The framework we use is the UN Guiding Principles on Business and Human Rights which defines what it means for a company to respect human rights, especially for persons made vulnerable by economic systems that marginalize and exploit.”

Pat Zerega, of Mercy Investment Services and chair of the Human Trafficking- Worker Rights leadership team, said:

For several decades, ICCR has been a leader on supply chain issues, and advocacy work on trafficking brought a new aspect to corporate dialogues. Mercy Investment Services’ involvement since the start of this effort includes working domestically with the travel, transportation and tourism industries around corporations training staff to spot trafficking. Resources such as the Celebration without Exploitation toolkit provided the groundwork for investors.

ICCR expanded its focus to labor trafficking, including the development of a Principles for Confronting Human Trafficking and investor tools for issues of ethical recruitment and, more recently, the Investor Alliance for Human Rights resources. These tools enhance the ability of all shareholders to understand the issues and address corporations.

Ranking governments based on their perceived efforts to acknowledge and combat human trafficking, each year’s TIP report includes tiers of troubled countries. The report assigns countries into three tiers. Tier 1 consists of “countries whose governments fully meet the Trafficking Victims Protection Act’s (TVPA) minimum standards.” Below Tier 1, Tier 2 contains countries that may not meet the TPVA standards, “but are making significant efforts to bring themselves into compliance with those standards.” A “Tier 2 Watch List” consists of countries that are similar to Tier 2, but have other issues, such as an increasing number of trafficking cases or a lack of improvement on previously-implemented anti-trafficking efforts. Tier 3 countries are those “whose governments do not fully meet the minimum standards and are not making significant efforts to do so.”

The 2020 report underscores longstanding concern about China, especially in the Xinjiang Uighur Autonomous Region. The report also identified U.S. agricultural workers as particularly vulnerable. As well, the report acknowledges that its compilation was hindered by COVID-19, even as COVID-19 makes more people vulnerable to trafficking. A recent webinar put it well: “In many places, human traffickers, sadly, are the first responders to the pandemic.” While grateful for the recognition from the State Department, no doubt, we ICCR members must renew and redouble our efforts.

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.