SGI Joins Business Leaders In Calling For Aggressive Climate Targets

SGI Joins Business Leaders In Calling For Aggressive Climate Targets

Chris Cox

By Frank Sherman

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

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

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

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

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

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

Socially Responsible Investing requires effort

Chris Cox

Tariq Fancy, BlackRock’s former chief investment officer for sustainable investing, made a startling confession in a recent USA Today editorial:

In essence, Wall Street is greenwashing the economic system and, in the process, creating a deadly distraction. I should know; I was at the heart of it.

Fancy went on: “In truth, sustainable investing boils down to little more than marketing hype, PR spin and disingenuous promises from the investment community.”

It’s quite an indictment from a significant voice in the ESG sector, but, based on my personal experience working for Seventh Generation Interfaith for the past several years, I do not believe that it conveys the whole truth of the matter.

Yes, there are asset management firms that over-hype their ESG product. They slap an ESG label on a fund that screens out certain sectors and perhaps speak to a few companies about their climate actions and sell it at a higher price than non-ESG products. A recent Wall Street Journal article reported 43% higher fees for ESG products in one class of assets. Visit a grocery store, and a higher-priced item with a “Naturally Raised” or “Fresh” label may attract more consumers, even if neither quality is in any measurable sense true. The old Latin adage holds: Caveat Emptor! Buyer beware!

When we look under the hood, so to speak, at many ESG funds, there are reasons to be concerned.

Even as investors demand ESG investments, those funds labeled ESG may not always reflect investor preferences in their proxy voting. Last month, a study from Robeco Asset Management and the Erasmus University of Rotterdam School investigated a decade of proxy voting data, and concluded that large, passive asset managers vote the least in favor of ESG proposals. Further, PRI signatories in the U.S. did not even vote their proxies as well as other U.S. firms that did not describe themselves with an ESG label. Fiona Reynolds, CEO at PRI, recently responded to the report with a commitment to take action. Reynolds went on to give an unusual warning: “being a PRI signatory should not be the only due diligence test for investors.” 

Asset owners who rely on negative screens and “ESG” funds can be misled. Vincent Deluard of StoneX authored a recent report entitled “The ESG Bubble: Saving the Planet and Destroying Societies.” Deluard points to blind spots in customary ESG screens. He notes, “companies with a high ESG rating pay a much lower tax rate than their less virtuous peers.” As well, he observed that “ESG funds are biased against humans: the 15 most highly-rated companies employ just 1.9 million workers, versus 5.1 million for the 15 worst-rated ones.” He concludes: “By channeling more money towards these (already wealthy) companies, ESG funds are unconsciously worsening the social and political crisis associated with automation, inequality, and monopolistic concentration.”

While Deluard’s study can cause suspicion of all ESG products, there are hopeful signs on the horizon. Last week, acting SEC chair Allison Herren Lee spoke to the proxy voting issue, saying, “We know investors are demanding ESG investment strategies and opportunities, but funds may not always reflect those investor preferences in their voting” and suggested that the SEC may need to take action on proxy voting disclosure. Further, Gary Gensler, the nominee to lead the Security and Exchange Commission, has indicated that he favors greater ESG disclosures, and the SEC as a whole is making ESG a priority. Most importantly, there are firms that do the hard work. For an asset owner, asking good questions of an asset manager can help discern if the firm is committed to doing this work. [We will soon have a blog post that examines some good questions to ask.] 

The faith community, with ICCR leading the way, has pioneered socially responsible investing for fifty years. Many asset managers and advisors who are ICCR members are not doing the greenwashing that Mr. Fancy called out. And SGI members recognize their fiduciary responsibility and power of ownership to change the system for the better. SGI members create value by improving the conduct of portfolio companies and, at the same time, create real world impact for people and planet.

Investor Engagement by a Novice

Investor Engagement by a Novice

Chris Cox

By Judy Sinnwell, OSF Dubuque

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

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

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

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

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

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

Essential Workers: COVID-19 and Racial Equity

Essential Workers: COVID-19 and Racial Equity

Chris Cox

On February 19th, SGI’s quarterly member webinar examined how the engagement season will be shaped by the pandemic and racial justice issues. We are grateful that Corey Klemmer of Domini Impact Investments and Hanna Lucal of Open MIC joined us to enrich our conversation. We had some great interaction in the question and answer period, and we added some resources that were shared in the webinar’s chat feature to a final slide in the slide deck.

At the start of the COVID-19 pandemic, many Americans were shocked at the sight of empty shelves in stores as global supply chains sputtered to keep up with the demand for a variety of products. The fragility of these supply chains has suddenly become evident to a lot of Americans who expect them to always operate seamlessly. Global supply chains connect people worldwide, from garment workers in Bangladesh to consumers in the United States. They are built to be ruthlessly efficient, manufacturing and delivering goods exactly when and where they are needed. The ability to move quickly and seamlessly across the globe also helps companies find cheaper labor or other opportunities to make products more cheaply. While this system may be good for corporate owners and supply chain managers, it takes a toll on workers. In the face of COVID-19, poultry workers literally put their life on the line every time they punch in to work. The opportunity of 2021 is to place worker dignity at the center of supply chain transformation plans.

The Black Lives Matter movement has also created an unprecedented urgency for a more genuinely diverse and inclusive workforce. The COVID-19 pandemic has inflicted devastating effects on the U.S. economy, with job losses, especially concentrated among women, minorities, and low-wage workers. It illustrates the systemic racism that lives in our financial institutions. Corporations are making statements in support of Black Lives Matter, but statements are easy. Ensuring that People of Color are hired, paid, promoted, and retained equitably is less so. We cannot allow the corporate response to be merely words. Together, we can compel action.

Again, we are very grateful for the presence of Corey and Hannah 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.

Shareholder Resolution Timeline

Natalie Wasek

We often get questions on deadlines associated with the shareholder resolution process. Because SEC rules can be difficult to read, I have outlined the Shareholder Resolution Timeline. This won’t answer all the questions, but will hopefully make the process a little more digestible.

When companies do not engage with their shareholders on salient ESG issues, or they make insufficient progress, shareholders can resort to filing a resolution to be included in the company’s proxy statement and to be voted on at the company’s next annual general meeting (AGM). While the SEC approved several changes to the 14a(8) shareholder resolution process in the final months of the Trump administration, the timeline did not change. 

According to the SEC, a proposal “must be received at the company’s principal executive offices not less than 120 calendar days before the release date of the previous year’s annual meeting proxy statement. Both the release date and the deadline for receiving rule 14a-8 proposals for the next annual meeting should be identified in that proxy statement.” Thankfully, a company’s proxy statement is required to state the deadline for resolution submissions for the following year.

After a proposal is filed, the company has 14 days to ask the proponent to fix any procedural requirements (e.g. proof of ownership, word count) if they are not met. The proponent then has 14 days to resolve those issues. If the proponent does not respond or resolve the issues, the company can appeal to the SEC to exclude the proposal. The company cannot omit the resolution without giving the proponent a chance to resolve the issues, or without an appeal to the SEC.

The company has up to 80 days before its proxy is printed to challenge the proposal via a no-action request to the SEC. The company is required to provide a copy of the no-action submission to the proponents and will be published on the SEC website. After a company files a no-action request, such as substantial implementation or micro management (full list for potential exclusion, here), the proponent can appeal this challenge to the SEC. The SEC’s timeline on this decision is usually driven by the company’s proxy printing; however, the SEC does not have to wait for the proponent’s appeal, and can make a decision at any time. Because of this, it is recommended that the proponent inform the SEC on their plans to respond, and submit their appeal to the SEC as soon as possible, generally within 30 days of receiving the no-action.The SEC no longer has to respond to the company’s no-action request in writing, but rather can post their advice to their website on whether the proposal can be omitted from the company’s proxy. 

Oftentimes after a no-action request is submitted by the company, the proponents decide to withdraw the proposal, usually after they reach a mutual agreement with the company. While the proponent can withdraw their proposal any time up until the day of the shareholder meeting, we generally try to withdraw before the company’s proxy statement is printed. It is sometimes preferable to withdraw the proposal before the SEC sides with the company allowing it to omit the proposal, if the company’s no action arguments are compelling.

If the proponent does not withdraw the proposal, and the SEC does not rule in favor of the company to omit it from the proxy statement, the company has to send a management statement to the proponent. The statement, typically referred to as the company’s opposition statement, must be sent at least 30 days before the proxy is printed, recommending shareholders vote either for or against the shareholder proposal. If the statement of opposition makes any arguments that are false or misleading, the proponent can ask the company to make the appropriate changes. If the company makes any flagrant errors, the proponent can write to the SEC to challenge the statement, though the SEC does not have to respond to this challenge.

In preparation of the annual general meeting (AGM), the proponent has a few opportunities to “build the vote” by informing other shareholders why they should vote in favor of the proposal. 

  • The proponent can write and publish a Proxy Memo, detailing more information on why they filed the resolution, and why voting for the resolution is necessary. This memo is usually published on the proponent’s website and distributed to other shareholders through partner organizations.
  • The proponent can also file an Exempt Solicitation. Similar to a proxy memo, it expands on the proposal and argues why other shareholders should vote in favor of the proposal. This document must be reformatted by a third party to be uploaded to the SEC Electronic Data Gathering, Analysis, and Retrieval (EDGAR). It is then distributed to all subscribers to SEC filings for that company and is publicly available. This generally reaches more shareholders, and asset management firms. 

Leading up to the AGM, to continue to “build the vote,” proponents can also reach out to proxy service companies or firms that prepare company reports and provide proxy voting service on behalf of shareholders. The proponent can also reach out to large asset managers to inform them of their arguments for voting in favor of the resolution, and can promote their proposal through the media to build awareness and support.

After the proposal is voted on at the AGM, the company is required to publish the results of the vote, and other matters discussed, in an 8-K SEC filing within 4 days of the AGM. These filings can be found on the company’s website.

The timeline can be complicated, so you may want to refer to the table below. 

Summarized Timeline: 

120 Days from release date of previous years company proxyDeadline to submit shareholder proposal
14 Days (after submission)Company exclusion based on eligibility or requirements
14 Days (after exclusion) Proponent can resubmit proposal fixing the issues 
80 Days (before proxy is printed) Company challenge to SEC with a no-action request 
ASAP (after No Action request)Proponent to challenge or appeal the no-action request 
Any Time after No Action requestSEC makes a decision on no-action request 
Any Time before AGMShareholder can withdraw proposal 
30 Days before proxy is printed Company issues Management Statement recommending how to vote on the proposal, to be printed in the proxy 
Any Time (usually 6 weeks) before AGMProponent published or files Proxy Memo / Exempt Solicitation 
~30 days before AGMProponent “builds vote” with Proxy Service companies 
4 days after AGMCompany files 8-K with proposal vote results 

See the SEC Bulletin with more information here. 

Writing letters is easy; Will BlackRock act on it?

Writing letters is easy; Will BlackRock act on it?

Chris Cox

Today, BlackRock’s Larry Fink issued his 2021 letter to CEOs. As usual, the New York Times devoted significant coverage to it. Again, we at SGI are heartened by Fink’s words. I’ll call your attention to this nugget near the letter’s conclusion:

Questions of racial justice, economic inequality, or community engagement are often classed as an “S” issue in ESG conversations. But it is misguided to draw such stark lines between these categories. For example, climate change is already having a disproportionate impact on low-income communities around the world – is that an E or an S issue? What matters is less the category we place these questions in, but the information we have to understand them and how they interact with each other. Improved data and disclosures will help us better understand the deep interdependence between environmental and social issues.

I loved this line: “And now, business leaders and boards will need to show great courage and commitment to their stakeholders.”

At the same time, I am reminded of the “Peanuts” comic. Time and again, Lucy tells Charlie Brown that she will hold a football while he runs up to kick it. Initially, Charlie Brown usually refuses to kick it, not trusting Lucy. Then, Lucy says something to persuade Charlie Brown to trust her. Charlie Brown runs up to kick the ball, but at the very last moment before he can kick it, Lucy removes the ball. As a consequence, Charlie Brown flies into the air, falls down on his back, and hurts himself.

We’ve seen these letters each year from Fink, and we have written about our reactions to them before. Nonetheless, when it comes to voting their proxies, BlackRock, like Lucy, yanks the ball away (See: BlackRock voted against climate resolutions over 80% of the time in 2020). To be honest, I hope that I am wrong. I pray for an abundance of “great courage and commitment.” Time will tell if 2021 will be any different.

COVID-19 and Racial Justice: Pharmacy Deserts

COVID-19 and Racial Justice: Pharmacy Deserts

Chris Cox

We know that our healthcare system does not work well for those who are poor. Studies report that socioeconomic disparities in health care are significantly worse in the U.S. than in other wealthy countries. These disparities have daily real-world implications. Over the last ten months, we’ve seen how those who are poor are more likely to be infected with COVID-19 and, ultimately, to die from it, especially people of color.

The pharmaceutical industry deserves praise for producing safe and effective COVID-19 vaccines so quickly. However, drugs don’t work if people can’t afford them. Those pharma companies have been pursuing monopolistic deals with the fruits of taxpayer-funded innovation, rather than volunteering to share their know-how to get those vaccines to everyone, everywhere, at the lowest cost possible and as quickly as possible. This is why SGI members joined other investors in asking pharma companies to take into account public financial support for development and manufacture of vaccines or therapeutics for COVID-19 when making decisions on access and prices.

Similar to the term “food deserts,” research has also disclosed a phenomena of “pharmacy deserts” in the journal Health Affairs. Frankly, it is foreign to my experience. I live within ten blocks of four pharmacies: a CVS, two Walgreens, and an independent pharmacy. Meanwhile, neighborhoods in cities like Chicago increasingly are places where people are unable to fill medical prescriptions locally because their drugstores have closed or will not accept Medicaid. A pharmacy desert is the result of basic economics: because pharmacies get the lowest reimbursements for filling Medicaid prescriptions, companies are more likely to close stores in low-income, minority neighborhoods and open them in wealthy ones.

According to new research published this month in the Journal of the American Medical Association, racial disparities in mortality are not improving despite an increasing awareness of the problem and a focus on social determinants of health. Apart from COVID-19, Black mortality remains far higher than white mortality in America’s 30 largest cities. Add in COVID-19, and Axios reports that, in the U.S., 22,000 Black and Latino Americans would still be alive today if their coronavirus mortality rates were the same as white people.

Systemic racism has found its way into vaccine distribution as well. To address these concerns, Dallas County, Texas aimed to prioritize COVID-19 vaccine doses to “the county’s most vulnerable ZIP codes, primarily in communities of color.” The plan drew the ire of state officials who threatened to cut off the county’s vaccine supply, and county officials quickly retreated. In Dallas, as in other major Texas cities, distribution sites are more commonly located in white neighborhoods, and early data showed that Dallas County had distributed most of its shots to residents of whiter, wealthier neighborhoods.  Black and brown people who are disproportionately affected by the coronavirus are also least likely to get vaccinated. There are lots of reasons why, but access to the internet to sign up for shots, and access to pharmacies and hospitals to receive the shots, are significant issues.

To beat this virus as quickly as possible, the Biden administration, state and local governments, and corporations must work collaboratively to prioritize the distribution of the vaccine to those communities most at-risk, especially people of color. 

SGI Board Elects Officers for 2021

SGI Board Elects Officers for 2021

Chris Cox

SGI  is pleased to announce the election of board officers for the year 2021. These include:

  • President: Cindy Bohlen, Riverwater Partners
  • Treasurer: Peg Groth, Sisters of the Sorrowful Mother International Finance, Inc.
  • Secretary: Ann Roberts, Dana Investment Advisors

Both Peg and Ann are continuing in their positions as officers. Cindy Bohlen, Chief Mindfulness Officer at Riverwater Partners, leads the firm’s sustainability practice and does primary research for the health care and technology sectors. Cindy has prior research experience at Robert W. Baird and M&I Investment Management. She added a sustainability lens to her investment process while working for another private firm and for a local foundation. Cindy earned a B.B.A. in Finance and a B.A. in Spanish from the University of Wisconsin – Madison. In addition, she is a CFA® charterholder. Cindy joined SGI’s board this year.

The outgoing board president is Dan Tretow, Director of Financial Services in the International Office,  School Sisters of St. Francis. Dan, who served as board president from 2018 through 2020 remains on the SGI board and will participate in the development committee.

Frank Sherman, executive director of SGI, said, “I congratulate Cindy on her election as president of the SGI Board of Directors.  Her commitment to ESG issues and her professional experience are great assets to SGI.  We value her leadership at SGI and know that she will help guide us in our work for people and planet.”

The entire team at SGI thanks Dan for his service as president. Under his leadership, we have grown in members, hired staff, expanded our corporate engagements, and commenced our annual conference. We are grateful for Dan’s generous service to our organization since the 1980s and to the School Sisters of St Francis, one of our founding members.

The SGI board is elected by SGI members in staggered three-year terms. Board members elected in the October 11th member meeting were: Caroline Boden (Mercy Investment Services), Ed Fitzpatrick (The Fitzpatrick Group, Wells Fargo), Ann Roberts (Dana Investment Advisors), and Sr. Carmen Schnyder  (Sisters of the Precious Blood). The board officers are elected by the board, as per the Articles of Incorporation and Bylaws. To learn more about SGI’s board, click here. 

Supreme Court to weigh in on Child Slavery

Supreme Court to weigh in on Child Slavery

Chris Cox

Today (December 2nd) is International Day for the Abolition of Slavery.

Yesterday, in a cruel irony, the U.S. Supreme Court heard consolidated oral arguments in Nestlé USA, Inc v. Doe I, Docket number 19-416 and Cargill, Inc v. Doe I, a consolidated case on U.S. corporations and liabilities for alleged child slave labor violations abroad.

The basic facts of what happened are beyond dispute: six Africans were trafficked out of Mali as children, where they were forced to work long hours on Ivory Coast cocoa farms and locked at night into shacks. Attorneys for the six Africans argued that the companies should have better monitored their cocoa suppliers in West Africa and have liability. The countries of the region grow about two-thirds of the world’s cocoa, and child labor is endemic.

Looking at the docket files for the case, one finds amicus briefs from Coca-Cola, Chevron, the U.S. Chamber of Commerce, and a joint filing for three trade associations (National Confectioners Association, the World Cocoa Foundation, and the European Cocoa Association), all in support of Cargill. As well, the Washington Legal Foundation and the Cato Institute filed amicus briefs in support of the corporations.

Cargill and Nestle selected a lawyer well-known to MSNBC aficionados to represent them: Neal Katyal, a former Acting Solicitor General of the United States, and the creator of an inspiring TED Talk.  Both companies have strongly worded policies against child labor and human trafficking and the like. All of the amicus briefs stated that they abhor child slavery and the corporations actively take steps to eradicate such practices among their suppliers.

The broad outline of the companies’ argument is found in the second page of Katyal and his team’s brief:

Plaintiffs’ brief confirms that all they have alleged (and can allege) is that Nestlé USA lawfully purchased some cocoa from Côte d’Ivoire and exercised some generalized supervision. The true wrongdoers are the Malian and Ivorian traffickers, farmers, and overseers who injured Plaintiffs in West Africa.

In other words, the practices of Nestlé, Cargill and, by extension, Chevron, Coca-Cola, and all multi-national corporations with dispersed supply chains are sufficient. The terms of their contracts are clear and exclude child labor, human trafficking, and all forms of modern slavery. Occasionally, they do audits of their suppliers. Isn’t that enough? How can a company be responsible for all the actions of their suppliers?

At issue, according to the briefs, is liability under the Alien Tort Statute, a part of the Judiciary Act of 1789.  It has been enshrined in U.S. law for more than 230 years. To me, the most interesting exchange during the hearing was between Justice Elena Kagan and Katyal (pages 19-21 of the transcript):

JUSTICE KAGAN: Mr. Katyal, is child slavery, not aiding and abetting it but the offense itself, is that a violation of a specific universal and obligatory norm?

KATYAL: We’re — we’re not – yes, I think we’re not challenging that here. It’s just the aiding and abetting.

JUSTICE KAGAN: Okay. So, if that’s right, could a former child slave bring a suit against an individual slaveholder under the ATS?

KATYAL: So they — if it were – if it weren’t extraterritorial and it wasn’t a corporate action, yes.

JUSTICE KAGAN: Yeah, no problem extraterritorial, no problem aiding and abetting, just a straight suit.

KATYAL: Correct.

JUSTICE KAGAN: Okay. And could the same child — former child slave in the same circumstances bring a suit against 10 slaveholders?

KATYAL: You know, if they – if they met the — you know, the requirements under the — the law, yeah, sure. I mean, if they —

JUSTICE KAGAN: Okay. So if —

KATYAL: — if it was a plausible allegation.

JUSTICE KAGAN: — if you could bring a suit against 10 slaveholders when those 10 slaveholders form a corporation, why can’t you bring a suit against the corporation?

KATYAL: Because the corporation requires an individual form of liability under a norm, a specific norm, of — of – under international law, which doesn’t exist here. I think Sosa in Footnote —

JUSTICE KAGAN: I — I — I guess what I’m asking is, like, what sense does this make? This goes back to Justice Breyer’s question. What sense does this make? You have a suit against 10 slaveholders, 10 slaveholders decide to form a corporation specifically to remove liability from themselves, and now you’re saying you can’t sue the corporation?

Justice Kagan was pointing toward an amicus brief from the Yale Law School Center for Global Legal Challenges filed in support of the six Africans. In the brief, Oona Hathaway sets forth a compelling argument that:

Slavery, forced labor, and human trafficking constitute the worst forms of human exploitation. The law of nations has long prohibited these practices in specific, universal, and obligatory terms. Indeed, these prohibitions are among the most longstanding, deeply rooted prohibitions in international human rights law. Each of these prohibitory norms of international law extends, moreover, to natural and juridical [corporations] persons alike. (p. 33)

Citizens United v FEC decided that corporations are people, when it comes to political spending, but corporations are now arguing that they are not people when it comes to child labor, human trafficking, and modern slavery.

I won’t pretend to know how this court will decide the case, but it should go without saying that aiding and abetting slavery is wrong, whether it is done by an individual or a corporation.

Thanksgiving Blessings and Prayers for Those Without

Thanksgiving Blessings and Prayers for Those Without

Chris Cox

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…