As requested by members, we will host our next webinar on shareholder engagement in immigration on Friday, February 16th at 10 a.m. (Central time). The webinar will last 90 minutes.
In the webinar, we will:
Review our values and commitments onimmigration
Assess the state of play on policy
Highlight what some allies are doing
Encourage deeper investor engagement with our companies around concerns onimmigration (e.g., the shareholder letter to JPMorgan Chase concerning investment in private prisons and immigration detention centers)
We also see many governments failing to prepare for the future, on issues ranging from retirement and infrastructure to automation and worker retraining. As a result, society increasingly is turning to the private sector and asking that companies respond to broader societal challenges. Indeed, the public expectations of your company have never been greater. Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.
In the letter, Fink calls on companies to proactively manage environmental, social, and governance matters through deeper board and investor engagement and thoughtful strategy development. Companies, Fink suggests, should act as stewards for all their stakeholders – including employees, customers, and communities.
Public response to the letter has been mixed. While some find a billionaire’s plan to combat inequality to be ironic, hypocritical, and hollow, many, including us here at SGI, hope this call-to-action will have effect.
BlackRock, the world’s largest asset manager with $5.7 trillion in assets under management as of July 2017 (or, put another way, 20% of the U.S. market), is a significant shareholder in all the largest companies, for better or worse. As Bloomberg’s Matt Levine noted:
Statement endorsed by 147 investors representing $3.7 trillion appeals to global brands to recommit to three-year extension to fulfill Accord’s mandate to remediate fire and safety violations in apparel sector.
The investors, including Seventh Generation Interfaith Coalition for Responsible Investment and its members, say additional time is needed to complete the remediation plans and worker training indicated by audits at the over 1,600 factories covered by the Accord. The statement will accompany letters being sent to the 160 companies that have not yet become signatories to the three-year extension of the Accord, urging them to participate.
The investors are part of the Bangladesh Investor Initiative organized by the Interfaith Center on Corporate Responsibility to press brands and retailers sourcing in Bangladesh to join the Accord and remediate human rights risks in their supply chains. The statement was endorsed by 147 institutional investors that collectively represent $3.7 trillion in managed assets.
Said Henrike Kulmann of Allianz Global Investors GmbH, “The new agreement between global trade unions and companies ensures that the industry continues to remediate safety issues found in garment factories and build effective worker safety committees. They are an important component to mitigating risks to workers and supply chain disruption as well as reputational risks to global brands sourcing in Bangladesh. We call on all companies sourcing from Bangladesh to become Accord signatories to mitigate these serious human rights and business risks.”
For the 1,600 factories have been inspected under the Accord, 82 percent of the identified safety issues have been fixed, the majority of them electrical. “Investors have been particularly pleased to see that, in addition to fixing specific problems, the Accord has worked to address the systemic issues that led to disasters like Rana Plaza,” said Lauren Compere of Boston Common Asset Management, “It is critical to ensure that future safety problems are detected before they become life-threatening events. The detailed comprehensive work achieved by the Accord is a positive signal to investors that safety risks are being carefully and sustainably managed.”
The investor statement recommends brands undertake the following:
Accord companies, who have yet to sign the 2018 Accord, do so during the first Quarter of this year.
Companies that were part of the Alliance, which is disbanding in 2018, join the Accord and therefore maximize collective leverage to complete safety reforms and strengthen action to build the capacity of the Bangladesh government’s oversight of worker safety by 2021.
Brands and retailers sourcing in the garment sector expand safety inspections to knitting, spinning & weaving; washing, dyeing & printing facilities; embroidery & accessories; home textiles; leather and footwear.
“To date, only 60 of the 220 signatories of the Accord have signed the new agreement to extend the program until May 2021,” stated David Schilling, senior program director of ICCR. “While much has been achieved in making garment factories in Bangladesh safer, there is more to be done, including the establishment of worker safety committees in each factory. The success of the Accord to date is built on the unprecedented collective action of brands and trade unions. Continued solidarity is needed to finish the job and prevent hard-earned gains from disappearing.”
Frank Sherman, Executive Director of Seventh Generation Interfaith
We experienced a record number of extreme weather events in 2017. We also witnessed a different kind of inversion. As our government reversed environmental and social regulations, companies took voluntary actions to protect people and the planet. In a Harvard Business Review profile of the Top 10 Sustainable Business Stories of 2017, business leaders took steps to reduce climate change. As the new administration pulled out of the Paris Agreement and made an all-out assault on our air, water, climate, and land, multinational corporations joined state and local governments to declare We Are Still In. Large institutional investors such as Blackrock and Vanguard woke up to the risk of climate change in voting with faith-based shareholder proposals.
China accelerated their sustainability efforts, stepping into the leadership position given up by the U.S., by committing to cut coal by 30% and cancelling 103 coal plants; making big moves in electric vehicles; and becoming the world’s largest solar producer. As the U.S. administration moved to relax fuel efficiency standards, GM, Ford and Volvo announced major investments in electric vehicles (EV). France, India, Britain, Norway, and China commitment to ban diesel and gas vehicles over the next couple of decades helped push EV sales up 63% globally last year!
Business leaders like Apple’s Tim Cook stood up stating that sustainability that isn’t about philanthropy, but rather about the core business and its role in society. Companies supported state attorney generals’ suit of the administration’s immigration ban and discrimination based on sexual orientation.
Looking ahead at 2018, author Andrew Winston predicted that “Millennials and Gen Z will continue to push for purpose and meaning in work and life”. Companies will set more aggressive sustainability goals and embrace “clean labels” (…like Walmart, Target, and Panera did in 2017). The #metoo movement against sexual harassment will move beyond media and politics to the corporate suites.
In a new series of posts, SGI will offer reviews and suggestions of books related to our work in shareholder advocacy.
For those who want an inspirational primer about shareholder advocacy, Andrew Behar’s The Shareholder Action Guide: Unleash Your Hidden Powers to Hold Corporations Accountable fits the bill. Replete with anecdotes and advice, coupled with references to on-line resources, this book explains the tools and strategies available to empower shareholders. Further, this handbook may well inspire new activist shareholders to demand corporate accountability.
The author leads As You Sow, a nonprofit organization that focuses on environmental and social corporate responsibility. As You Sow focuses on climate change, sustainability, human rights, and environmental health, and it engages, among others, companies like ExxonMobil, Chevron, Southern, FirstEnergy, Duke, Dow, DuPont, Monsanto, HP, Dell, Apple, Proctor & Gamble, and Coca-Cola.
In 15 brief chapters, Behar takes readers through the basics. The first seven chapters include: shareholder responsibilities, how shareholders began to use their power with General Motors in South Africa, defining some limits on shareholder actions, explaining proxy votes, influencing fund managers, and corporate engagements and filing shareholder resolutions. Chapter 8 of The Shareholder Action Guide also tells the story of many campaigns in shareholder advocacy from across the past forty years. It profiles leaders in shareholder advocacy, including a testament to the work of SGI’s founder, the late Fr. Mike Crosby, for his efforts in tobacco. Those involved with SGI will recognize the names of numerous allies referenced in the book, including Tim Smith and Sr. Nora Nash, O.S.F. Subsequent chapters contemporary strategies in shareholder advocacy .
Behar explores how corporations are the most powerful entities on the planet. Sadly, many have had a long record of failing to care for creation, exploiting vulnerable people, and hiding boardroom decision-making. Since, by law, corporations are beholden to their shareholders, some philanthropic trusts, pension funds, and other institutional investors have used shareholder advocacy to press for changes in corporate policy. Behar also underscores the opportunity to engage individual investors, who have largely been silent, mistakenly thinking themselves powerless. The Shareholder Action Guide is designed to inform, inspire, and instruct investors in how to exercise their power to effect meaningful change on critical issues including environmental justice, food sustainability, executive compensation, and worker’s rights. Owners of as little as $2,000 worth of stock in a publicly traded corporation have the power to be heard. This book is a call to action designed to build a movement of active investors. Behar illustrates how investors can stop abdicating their power and act to make a better world.
The Guardian, heralded for its independent and investigative journalism, ran a feature story on Sr. Nora Nash, O.S.F.: Sister act: how a Philadelphia nun faced up to Wall Street. Sr. Nora, a member of the Sisters of St. Francis of Philadelphia, engages in the work of corporate social responsibility through Philadelphia Area Coalition for Responsible Investment (PACRI) and ICCR.
The Guardian’s article is excellent in its outline of why and how a religious community engages in CSR work and offers considerable detail about the breadth of issues that Sr. Nora and her colleagues take on as well as significant detail about the shape of those efforts with Wells Fargo and Kroger. The Guardian interviewed not only Sr. Nora’s colleagues in CSR work but also got Kroger’s communication chief to speak about the experience of working with faith-based investors.
The Seventh Generation Interfaith Board of Directors elected new officers for the 2018 calendar year. Dan Tretow (School Sisters of St. Francis), formally Treasurer, has stepped up to become President. Sister Sue Ernster (Franciscan Sisters of Perpetual Adoration) was elected to take the Treasurer position and Peg Groth (Sisters of the Sorrowful Mother) has agreed to serve as Secretary. The Officers deal with the administrative duties of the coalition and act as a sounding board for the staff. The membership is grateful for these volunteers for their service on behalf of the membership. Please join me in congratulating our new Officers.
The Board is thankful to Mark Peters (Priests of the Secret Heart) and Sr. Ruth Geraets (Presentation Sisters, Aberdeen, SD) who served as President and Secretary for the past two years for their service and commitment to bring good news to the poor.
Frank Sherman, executive director of SGI, wrote this post.