SGI launches new four-year strategy

At the Oct. 12th member meeting, SGI members approved the adoption of the strategic plan for 2022-2025. Building upon the 2018 strategic plan, this one continues in the framework of the three pillars from the previous plan: Making a Difference, Empowering Members, and Building Capacity. The new plan comes at a confluence of significant events: the COVID-19 pandemic, rising concern for the climate crisis, and a renewed awareness of the call for racial justice and equity, as well as a growing interest in sustainable investing.

SGI Board President Cindy Bohlen said, “I am so very thankful for the contributions of members and staff to the development of this strategic plan. It gives direction and invites collaboration toward fulfilling SGI’s mission to ‘build a more just and sustainable world for those most vulnerable by integrating social and environmental values into corporate and investor actions.’ This work is imperative to build a resilient society for all.”

To read the plan in full, please visit here.

Resilience: Building A Just and Equitable Economy for All – A Virtual Conference

The world looks different today than it did ten years ago, than it did five years ago, and even different than it looked just last year. Like many conferences, we were forced to move our 2020 conference to a virtual format as we dealt with the effects of the pandemic. This year is no different.

We are still grappling with the “new normal” and the remnants of an out of date structure which put those who are most vulnerable, last. COVID-19 surfaced other issues that, while crucial, have previously been neglected. The exacerbation of economic and racial inequities demonstrated and accentuated the fragility of our systems, structures, and policies. The pandemic shifted the narrative around “non-essential” employees and raised awareness of the critical importance of frontline workers, such as: grocery clerks, meat processing and farmworkers, delivery drivers, and many more in maintaining business operations and in ensuring the functioning of our global economic system. Many of these workers are women and people of color and this public health crisis has demonstrated their vulnerability and the disproportionate economic and health impacts they experience.

In one week, on October 12, 2021, Seventh Generation Interfaith Coalition for Responsible Investment (SGI-CRI) will hold its annual conference, aptly titled Resilience: Building a Just & Equitable Economy for All, virtually, from 4:30 p.m. to 7:30 p.m.

As we begin the recovery process from the COVID-19 pandemic, we see a need and an opportunity to build a resilient society with systems and structures that are just and equitable for all. Our panel of company, investor, and labor representatives will offer their perspectives on how we can implement positive change from the learnings and challenges of 2020, dismantle systems that perpetuate gender and racial inequities, and build an economy that serves all people and ensures the dignity of all workers.

Our keynote address will be from Rev. Dr. Liz Theoharis, Co-Chair of the Poor People’s Campaign: A National Call for Moral Revival. Our panel, moderated by Caroline Boden of Mercy Investment Services, will include lively discussion with a diverse group of experts:   

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

The webinar link and information will be sent out prior to the conference date. We hope to see you there.

Time to Reckon with Insider Trading

News outlets have unleashed an avalanche of allegations of insider trading:

These articles heighten a sense to ordinary people that the system is rigged; they call for significant action, but major problems remain unattended.

Insider trading consists of buying or selling a security, being in possession of material, nonpublic information (MNPI) about the security, in breach of a fiduciary duty or other relationship of trust and confidence. The action is damaging whether one is the person who shared or “tipped” the information or the person who traded the securities based on the information. The trading can occur in the anticipation of “bad” news for a company, selling before the stock crashes, or it may coincide with the announcement of favorable news and a stock rising to new heights.

As executives and board members regularly are exposed to MNPI, the window of opportunity to trade their own shares without violating insider trading rules is narrow. So, the SEC adopted Rule 10b5-1 in 2000, which allows insiders of publicly-traded corporations to set up a trading plan – whereby the executive sells a predetermined number of shares at predetermined intervals –  to facilitate effective selling of personal shares of company stock.

Professor Daniel Taylor of the Wharton School at the University of Pennsylvania has done a deep dive into Rule 10b5-1, and his research has exposed some “cracks” in this system that are ripe for abuse. He and his colleagues reported on some “red flags” in January of 2021:

  1.  An archaic paper-filing system for sales from Rule 10b5-1 plans. A simple remedy is to make them digital and put on the SEC website through the EDGAR portal.
  2. Rule 10b5-1 requires no interval between the creation of a plan and its execution. A recent study found that more than one-third of the plans adopted in a given quarter saw an insider execute a trade before that quarter’s earnings announcement, avoiding considerable losses. A remedy to restore confidence would be to require a cooling off period of four to six months.
  3. Some insiders create Rule 10b5-1 plans to effect a single trade. Prohibiting this option makes for a reasonable remedy.
  4. Some insiders create multiple Rule 10b5-1 plans to run concurrently and cancel all but the most advantageous plans. Prohibiting a single person or entity to have more than one Rule 10b5-1 plan at a time would advance the credibility of the system.
  5. Currently, the Form 4 disclosures of insider trades lack relevant information. The date of plan adoption or modification provides greater transparency.
  6. Boards and/or compensation committees may not be giving sufficient oversight to the issue. The board or compensation committee should monitor executive stock sales.

(If you prefer a podcast, Taylor describes the issue here.)

In June, Chairman Gary Gensler acknowledged that “these plans have led to real cracks in our insider trading regime” and asked the SEC staff for recommendations on how to “freshen up” Rule 10b5-1. As well, the Investor-as-Owner Subcommittee of the SEC Investor Advisory Committee has released draft recommendations and discussed the topic at its September meeting.

Even if the studies by Professor Taylor and his peers cannot determine with absolute certainty whether any insiders that avoided losses or otherwise achieved “market-beating returns” actually traded on the basis of MNPI misses the point; insider trades must not only be legal, they must also appear ethical. The current system allows for far too much ethical ambiguity and erodes basic trust in the common good.

“Effective governance is a pillar of sustainable companies,” according to Cindy Bohlen of Riverwater Partners. “Executive alignment with company success is a governance factor considered important by many investors, including Riverwater. It is imperative that insider trading rules allow executives to share in the success of the businesses they run, while at the same time ensuring they are not afforded preferential outcomes given their insider status.”

Donna Meyer to receive SGI’s 2021 Fr. Mike Crosby Award

The Board of Seventh Generation Interfaith Coalition for Responsible Investment is pleased to announce that Donna Meyer, recently retired from Mercy Investment Services, has been selected to receive the 2021 Fr. Mike Crosby Award. The award will be presented at the SGI member meeting and conference 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’re so happy to recognize Donna with the Fr. Mike Crosby Award. In addition to working closely with Father Mike in tobacco engagements, she has been a leader in ICCR and beyond by promoting health equity for the most vulnerable in our society,” said Frank Sherman, SGI executive director. He added, “Companies and investors alike recognize Donna for her knowledge and compassion. Mike is smiling today!”

Donna Meyer

“Through her quiet but steadfast dedication, and gracious leadership, Donna has promoted health equity and helped improve the health of local and global communities,” said Katie McCloskey, vice president of social responsibility at Mercy Investment Services.

Donna Meyer, PhD, was Director of Shareholder Advocacy for Mercy, where she specialized in Public Health and Health Services. She actively participated with the Interfaith Center on Corporate Responsibility (ICCR), serving alongside Fr. Mike on its board from 2007 to 2013 and using her expertise in health care and public health to provide leadership for domestic and global health issues. Recently, she helped lead the focus on increasing access to COVID vaccines and treatments.

Throughout more than two decades of shareholder advocacy, Donna was a regular collaborator with Fr. Mike. Fr. Mike collaborated with Donna in the design of the SRI program for CHRISTUS Health, and he guided her into an engagement about the sale and advertisement of tobacco products that was her first “win.”

Donna also served as co-chair of the Investors for Opioid and Pharmaceutical Accountability (IOPA). The IOPA is a coalition of 61 investors with $4.2trn in combined assets under management. In four years, this coalition has engaged major opioid manufacturers, distributors, and retail pharmacies on gaps in governance and oversight, leading to companies pulling back pay from executives, producing public reports on their board oversight of opioid-related risks, and instituting oversight committees.

Donna’s career in healthcare administration includes serving on the Board of Directors of a number of health-related organizations. She currently serves on the Board of the Texas Health Institute and as a member of the Catholic Health Initiatives (Common Spirit) Mission and Ministry Board Committee. She is a Fellow of the American College of Health Care Executives; she earned her BS and MS from the University of Minnesota and her Doctorate from the University of Texas School of Public Health.

Please join us in congratulating Donna!

John Ruggie, human rights icon, dies at 76

Some SGI members may not recognize his name, but much of our work in human rights over the last 20 years has been built upon John Ruggie’s vision, imagination, determination, and political skill.

John G. Ruggie, a Harvard professor who developed the U.N. Global Compact and its Guiding Principles on Business and Human Rights (UNGPs), died on Thursday, September 16, at age 76.

SGI joins with so many who mourn the passing of this icon in human rights. May we, who believe in the work that he advanced, continue the efforts that he initiated.

Ruggie was a professor at Harvard’s Kennedy School of Government. From 1997-2001, he served as United Nations Assistant Secretary-General for Strategic Planning, a post created specifically for him by then Secretary-General Kofi Annan. His areas of responsibility included assisting the Secretary-General in establishing and overseeing the UN Global Compact, now the world’s largest corporate citizenship initiative; proposing and gaining General Assembly approval for the Millennium Development Goals; and broadly contributing to the effort at institutional reform and renewal for which Annan and the United Nations as a whole were awarded the Nobel Peace Prize in 2001. In 2005, Annan appointed Ruggie as the UN Secretary-General’s Special Representative for Business and Human Rights, tasked with proposing measures to strengthen the human rights performance of the global business sector. In June 2011 the UN Human Rights Council, in an unprecedented step, unanimously endorsed the UNGPs that Professor Ruggie developed through extensive consultations, pilot projects and research. The UNGPs, dubbed the “Ruggie Principles,” celebrated their 10th anniversary this year.

I’d recommend reading these tributes to his work:

What’s all the Fuss about Exxon Mobil and Investors lately?

By Sr. Barbara Jennings, CSJ

On May 26, 2021, a little known investment company called Engine No. 1 challenged and won a proxy battle with one of the world’s largest public oil and gas companies, Exxon Mobil.  Three of Engine No. 1’s four proposed Board Members who have qualified energy industry experience were elected to the board. They will challenge company management to transform their business model for a low carbon economy, which will benefit all stakeholders including workers and shareholders alike. 

Shareholder elected Greg Goff, former CEO of Andeavor and EVP of Marathon Petroleum who thinks that mitigating climate change is part of corporate responsibility; Kaisa Hietala, a former VP of Finnish renewable energy company, Neste Oyi; and Alexander Karsner, a strategist at Alphabet, Inc.  These three candidates beat out three of Exxon Mobil’s current, reelected board members. 

Shareholders proposals co-filed by members of the Seventh Generation Interfaith also received majority votes at the Exxon Mobil AGM. Dana Investments, the Capuchins, and the School Sisters of Notre Dame, Central Province co-filed a proposal asking for a report on climate lobbying (64% vote). The Sisters of St. Agnes co-filed the proposal asking for broader lobbying disclosure (55% vote). The Dubuque Franciscan’s co-filed the separate chair proposal (22% vote). Members of SGI and ICCR also co-filed successful climate proposals at Chevron, ConocoPhillips and Phillips66. 

Members of ICCR have dialogued and filed shareholder resolutions at Exxon Mobil since the early 1990’s. The company always responded with platitudes about their amoeba studies for alternative fuels, but refused to set targets or goals.  What has changed?

Here are my educated guesses:

  1. The Time has come! Finally, extreme weather events and consistent calls from scientists have increased public awareness of climate change, although a decreasing percentage remain climate deniers. Climate Activists like Greta Thunberg are finally getting through to all of us, especially to young people.
  2. It is irrefutable that drilling, and burning petroleum produces is a major cause of climate change as well as of human rights abuses. The latest IPCC report removed any uncertainty: “It is unequivocal that human influence has warmed the atmosphere, ocean and land.” 
  3. There is growing popularity of ESG strategies. It has become easier to invest sustainably through many asset managers. Bloomberg projects ESG assets may hit $53 trillion by 2025, a third of global AUM.
  4. The International Energy Agency (IEA) Net Zero by 2050: a Roadmap for the Global Energy Sector report published shortly before the Exxon Mobil AGM called on governments and companies to stop investment in new fossil fuel supply projects or coal plants; no sales of new internal combustion engine passenger cars after 2035; and net-zero emissions in the global electricity sector by 2040.
  5. Pope Francis continues to remind us to care for our common home. The Vatican released 14 recommended actions in June 2020, including ‘ethical responsible and integral criteria for investment decision making.” The Vatican Dicastery for Promoting Integral Human Development urges that Church divestment from fossil fuels and reinvestment in renewables is a moral imperative.
  6. The U. S. Catholic Bishops are reviewing their Socially Responsible Investment Guidelines for the first time in 20 years. Bishop Gregory Parkes, USCCB Treasurer, who worked in the banking industry before entering the priesthood, is seeing the “financial writing on the wall” for fossil fuel companies who will not or cannot diversify. 
  7. A U. S. House subcommittee is “demanding that Exxon Mobil, Shell, Chevron testify before Congress about the industry’s decades-long effort to wage disinformation campaigns around climate change.” (St. Louis PostDispach, July 3, 2021 and New York Times, June 16, 2021) 

The majority votes at Exxon Mobile indicate a tipping point in pushing fossil fuel companies to transition to low-carbon business models. SGI and ICCR members have persisted and led the way with corporate engagements…and are continuing to see success. 

What’s a “Good Buy?”

According to the latest statistics released by the American Apparel & Footwear Association: In 2020, on average, every man, woman, and child in the United States spent $1,067.93 to buy 51.8 pieces of clothes and 5.8 pairs of shoes. Normally, those numbers are higher, but the COVID-19 pandemic reduced them.

In Laudato Si’, Pope Francis reminds us: “Purchasing is always a moral – and not simply economic – act” (#206).

We have five times more clothing today than 40 years ago. We prize bigger, walk-in closets to accommodate our clothes. Clothing purchased this year will have seven uses on average before being discarded by the purchaser.

That’s a lot of clothing with a hefty impact on carbon emissions and the climate crisis. That’s a lot of stuff sitting in people’s closets. That’s a lot of that ends up in landfills.

Our overflowing landfills aren’t the only obvious signs of a “throwaway culture.” The purchase of discardable clothing lends itself to thinking of the workers as disposable as well.

The old notion of a “good buy” is that it is cheap and makes you look thin. A renewed notion: a “good buy” has ethical content. How was it sourced? How does it care for creation? How were the workers treated in the making of this garment? Were they paid a living wage?


In April 2021, 200 ICCR members and affiliates signed the ICCR Investor Statement Calling for Renewal of Bangladesh Accord, a month before the agreement was set to expire. A brief extension of the Accord secured protections for worker rights and remedy solutions for 2 million workers at 600 factories through August 31st. We are delighted that the Accord has been renewed and expanded for two years as the International Accord for Health and Safety in the Textile and Garment Industry. This new Accord takes effect on September 1, one day after the current Bangladesh Accord is set to expire. Like its predecessor agreement, the new International Accord is a legally binding agreement between companies and trade unions that aims to make ready-made garments (RMG) and textile factories safe. True to its new title, the new Accord aims to expand these safety standards and worker to other countries and labor markets using the Bangladesh Accord model.

A list of signatories to the International Accord is available here. While it includes American labels like Fanatics and PVH (owner of Tommy Hilfiger, Calvin Klein, Warner’s, Olga and True & Co., and licenses brands such as Kenneth Cole New York and Michael Kors), we are disappointed that U.S. companies like Costco, the Gap, Kohl’s, Macy’s, Target, TJX (owner of TJ Maxx and Marshalls), and Walmart are not yet signatories. This roster of American non-signatories aligns with those who refused to join the Accord in 2013, opting to create the now defunct Alliance for Bangladesh Worker Safety instead. Given that a fire swept through a garment factory, killing 17 people in Pakistan on Friday (8/27), worker safety remains an urgent concern and requires multilateral action. To sit on the sidelines is irresponsible.

Connecting the first section of this post with the second, I’d suggest that, while we, as consumers, can “buy better,” the Accord, a legally binding, multi-stakeholder agreement, advances commitments to worker safety in ways that corporate “codes of conduct” and audits cannot. If a company hasn’t signed it, the onus is on them to demonstrate that they are doing something better.

Please see the New York Times and Reuters articles for more background on the new Accord.

Do You Know Where Your Asset Manager Is (on climate)?

By Frank Sherman

This article augments an earlier blog by John Mueller of Dana Investment Advisors on Questions to Ask Your Money Manager.

There is a growing recognition within the financial sector of its responsibility, as well as its power, to transition the economy to a low carbon future.  The Glasgow Financial Alliance for Net Zero (GFANZ), representing $70tn in assets, is committed to achieving the objective of the Paris Agreement to limit global temperature increases to 1.5°C. Combined with Net Zero commitments from countries representing approximately 70% of global GDP, it sounds like the world has turned the corner on climate change. However, there is a gap between these long term ambitions and short term actions. The latest round of UN Nationally Determined Contributions (NDC) put the world on track for less than a 1% reduction in emissions by 2030 vs. 45% called for by the Intergovernmental Panel on Climate Change (see Responsible Investor, Aug 17, 2021).

As a small asset owner, what can an SGI member do to ensure they are part of the solution rather than contributing to the problem? One easy strategy is to ask your asset manager about their climate stewardship activities, including proxy voting. The UN-convened Net-Zero Asset Owner Alliance, part of the GFANZ composed of over 40 institutional investors (including some ICCR members), recently released a new resource designed to help asset owners set expectations for, evaluate, and engage with asset managers on their climate-related proxy voting activities. As well, the resource is useful to asset owners who retain the right to vote their shares or to those asset owners with internally managed portfolios by integrating the principles into their own proxy voting and asset manager selection, appointment, and monitoring processes. These foundational guidelines are centered on four themes: governance, interest alignment, merit-based evaluation, and transparency. They help asset owners construct their own expectations of their asset managers’ proxy voting approaches.

Many asset managers have already made the commitment to align their portfolios with net-zero as part of the Net-Zero Asset Manager Initiative (NZAMI), which is also part of the GFANZ. Among the 128 signatories with $43tn in assets under management have already signed on to this Initiative are some of the biggies like Blackrock, Vanguard, and State Street. If you find your asset managers are part of NZAMI, you have the opportunity as a client to ask about how they are actualizing this goal within their management of their portfolio. If your asset managers have not yet signed on to NZAMI, you should ask them “why not?” I suggest you share this resource with your Investment Committee with a recommendation to review your own proxy voting guidelines and your expectations set with your asset management service providers. At the same time, you may want to challenge your Investment Committee to consider signing on to the Net-Zero Asset Owner Alliance themselves. As Blackrock’s Larry Fink has made clear, “climate risk is investment risk.”

Use Finance to Reduce Gender-based Violence

Today is Women’s Equality Day, a day that commemorates the ratification of the 19th Amendment to the U.S. Constitution, granting women the right to vote. Earlier this week, I circulated a request to SGI members asking them to sign an investor letter to a company that requires employees to submit to forced arbitration in matters of workplace discrimination, harassment, and other worker complaints. As these employment agreements disproportionately have adverse effects for women and People of Color, we are asking the company if the use of forced arbitration is consistent with their commitment towards gender and racial equity.

In some respects, supporting an investor letter of that nature is consistent with our mission and automatic for SGI, so I appreciated a recent invitation to be a part of the Criterion Institute’s design sessions for a Roadmap for Christian Denominations to Use Finance to Reduce Gender-based Violence. This allowed for some greater reflection on why we take these actions and what we hope to achieve.

While I recommend that you read the Roadmap for yourself, I’d like to make three observations.

First, the document begins with “Sparking the financial imagination,” a fruitful origin that I experienced in the design sessions, embedded in an exercise with our hands that we performed as we began. A theologian from Duke Divinity School, Craig Dykstra, coined the term “pastoral imagination.” As he put it, in any profession (law, architecture, music, etc.), those particularly apt in its practice see things that most of us will miss. Dykstra also writes of ecclesial imagination: “the way of seeing and being that emerges when a community of faith, together as a community, comes increasingly to share the knowledge of God and to live a way of abundant life–not only in church but also in the many contexts in which they live their daily lives.” This roadmap aims to spark that imagination “in the many contexts in which [we] live [our] daily lives.”

Second, the roadmap address “prophetic hope.” A Biblical prophet is not one who sees the future so much as one who sees clearly what is happening here and now. A lesson in community organizing is about seeing with two eyes: one eye sees “the world as it is,” and the other sees “the world as it should be, as God made it to be.” A prophetic hope, then, is a stubborn conviction that we can live into that second world, in spite of the immediate evidence to the contrary. It took many years for women to obtain the right to vote, and obtaining the goal of eliminating gender-based violence appears to be on a distant horizon. We, as faith-based investors are called to practice this prophetic hope.

Third, I am a Catholic; so please, then, let me leverage a little Catholic guilt in a final observation about “bystanders.” Many conversations about violence typically frame the discussion in terms of “victim” and “perpetrator.” While that conversation is important, it only addresses part of the problem. A comprehensive response to gender-based violence must also address the role of collective passivity in the face of anything that dehumanizes. Given the pervasiveness of inaction, whether in the form of denial, willful ignorance, or silent complicity, we who are bystanders must be held accountable, especially those of us who occupy social positions of privilege. We can’t afford to stay on the sidelines.

I am reminded of when I heard a member of an African-American church who helped drive a bus to integrate some schools in the Boston area. Like the kids, he faced insults and potential violence regularly. When he was asked: why did you do it? He replied, “Well, I think you’re either working to make the world a better place, or you’re working to keep it the same. So I had to drive the bus.”

I hope that all of us feel similarly compelled to act, engaging all of the imagination and hope that we can muster!

Webinar: Water Stewardship

When describing the geography of SGI, one can use bodies of water as a descriptor: The Great Lakes and the Mississippi River. We have a new member from the other side of Lake Michigan, the Grand Rapids Dominicans as well as another new member near the Lake’s southern shore, the Poor Handmaids of Jesus Christ. We are based on the western shore of Lake Michigan in Milwaukee, and a returning member here is more commonly known as the Lake Franciscans and our board president is from Riverwater Partners. Most other members can be characterized by their proximity to the Mississippi: The Franciscans Sisters of Little Falls near the Mississippi’s origin, our members from the Twin Cities, the FSPA’s in La Crosse, the Dubuque Franciscans and the BVMs, our St. Louis members, down to the Jesuits in New Orleans.

One might say that water is in our DNA as an organization.

On August 19th, we continued efforts to educate ourselves on issues related to water. In a webinar on Water Stewardship, we learned about some tools that we can use and actions we can take in these efforts. We are grateful that Robin Miller of Ceres and Lydia Miller Dana Investment Advisors joined us to enrich our conversation.

“The ultimate stranded asset related to water is people.”

Climate change, loss of biodiversity, and access to water have become existential threats, and, while politicians have been forced to collaborate on a global scale, the financial sector and businesses must also contribute if we are to have a chance of success. Until recently, there was not enough publicly available information for investors to assess the real-world impacts of their investments on water availability, making it difficult to accurately assess water-related risks. New tools present opportunities for investors to become involved through active ownership and investing in companies that provide water solutions. 

Water stewardship, in corporate life, means understanding the risks faced from water scarcity and pollution, and taking action to help ensure sustainable water management. In its plainest sense, water is a shared, public resource.

Again, we are very grateful for the presence of Robin and Lydia 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.

Water Stewardship Resources: