Shareholders work for racial justice

Four SGI members participated in ICCR‘s Spring Conference: Sr. Ruth Battaglia, C.S.A., Chris Cox, Frank Sherman, and Friar Robert Wotypka, O.F.M., Cap. We will report back what we heard and learned in a variety of ways in the coming weeks.

Today’s tweet from Pope Francis reminds us that preventing evil is not enough; we must take positive action together. Since its inception, SGI has endeavored to make the voices and concerns of those who suffer injustice the center of our reflection and action. I see it reflected as well in the work of the new Racial Justice Investing group within ICCR.

National events in 2017 intensified focus on racial, ethnic, and gender equality. The #MeToo movement, protests concerning the Confederate Flag and Confederate statues, the Women’s March, and the Black Lives Matter movement all contributed to this shift in focus. While personal conversion is vital to change, it is not enough. Addressing systemic injustice requires changes in structures at the level of policy, economics, and worldviews.

A session at the recent ICCR conference included a session from the newly formed Racial Justice Investing group. Pat Tomaino of Zevin Asset Management chaired the session. We also heard from Lisa Hayles of Boston Common Asset Management, Susan Baker of Trillium Asset Management, and Mari Schwartzer of NorthStar Asset Management. Hayles spoke of The 30% Coalition (that corporate boardrooms reflect the gender, racial and ethnic diversity of the United States workforce). Susan Baker discussed workforce diversity and the case for pressing companies to make the composition of the workforce transparent. Schwartzer voiced concerns about prison labor (NPR reported on some of the issues). Finally,  Tomaino addressed diversity and inclusion, especially within the tech workforce.

Pat Tomaino

The Racial Justice Investing group has monthly/semi-monthly calls and has a webpage within ICCR’s member area where SGI members can sign up to participate and to receive regular updates. Previously, the group drafted a Mission Statement:

Racial Justice Investing is a group of socially responsible investors and others in the business community who are taking action for racial justice within our own organizations, as well as in our engagements with portfolio companies.

This important work will contribute to our corporate engagements. We heard about success from Johns Hopkins in hiring of ex-offenders. We talked about resolutions asking tech companies to tie portion of executive compensation to diversity and inclusion goals among other sustainability goals. We also heard about work from the American Friends Service Committee investigating corporate investments in the prison industry. Much remains to be done, but it is exciting to see our partners deeply engaging this issue.

Capuchin friar offers remarks at ICCR conference opening

This past week, four from SGI participated in ICCR‘s Spring Conference: Sr. Ruth Battaglia, C.S.A., Chris Cox, Frank Sherman, and Friar Robert Wotypka, O.F.M., Cap. We will report back what we heard and learned in a variety of ways in the coming weeks– here on the blog, at our May member meeting, to name but two channels. To lead off, we want to share the contribution of one of our members: Robert was asked to deliver some remarks in the Interfaith Session during the conference’s first day.

I begin by living out my desire to be inclusive and to acknowledge my theological, my cosmic presupposition maybe, by sharing the best definition of the Franciscan movement that I ever heard. I don’t remember who said it, but it is this: “The Franciscans are the Protestants who never left the Church.” So I am one of you.

And that’s relevant for our purposes here because of the movement’s first days – which could have gone differently than they did. Saint Francis of Assisi formed a new way of living out the Gospel, he wrote a Rule and he took his Rule to Pope Innocent III, who gave it verbal approval. To study the context of pope’s decision is to know that he preferred to have Francis within the Church, advocating for change and introducing these new things and shaking things up, than to banish him and treat him as an outsider. Isn’t that a starting point of the ICCR? That it’s better that we sit down together and work things out than to separate from each other in this work?

The heart of the Gospel as I have been formed to hear and proclaim it – and none of this is original – is to build up the Reign of God. What is that? I have best heard this defined as God’s rule working in human relations – and what defines God’s rule? These values: Peace, Freedom, Justice, Sister/Brotherhood. That’s what the Gospel is all about, that is how Jesus lived. So before there was a rule, before Saint Francis, before Jesus proclaimed the Reign of God, there was the Covenant.

And what is a covenant? A covenant is a way for two unequal parties to enter into and sustain a relationship. And I think about the work of ICCR, as I am slowly coming to understand it, and I come to see it as a covenantal work. ICCR does not have the voice, the resources, the pull of the parties we’re engaging with. We are equal in dignity, equal in potential, equal before the law … but we are not equal in resources or influence. And I say this out of my first direct experience of dialogue with a corporation. A company rep told us on a conference call, referencing a Greenhouse Gas reduction regime that we were advocating his company enter into, that no other of his investors was coming to the company about this.

What did that show? For me it felt to me that this company rep was showing us mercy, which is the fuel of the work of the Reign of God. Mercy, as I have heard it defined, is to meet people where they are, be ready to offer your gifts, and to be ready to respond to the gifts of others. And that is how this rep met us and greeted our work.

Which brings me to another Francis, a 21st century Francis, Pope Francis, and his vision and desire that the Catholic Church be the Church of Mercy for the world, which above all points to above all point to and to carry on the mission of Jesus, who Pope Francis calls “the face of God’s mercy.” Pope Francis loves three words – he’s a Catholic, he likes Trinitarian imagery – and he loves these three words: mercy, encounter, and conversion.

And I see these words, these values, these energies, building up the mission and the work of ICCR, and I feel so grateful. Encounter requires collaboration, I continue to be astonished by the profound and peaceful encounters that occur here between parties with different pre- suppositions. Encounter: encounter is the presupposition of collaboration, and here we are, doing collaborate work to build up peace, freedom, justice, sister/brotherhood. And conversion – conversion says we don’t take small steps, we don’t fiddle around the edges, we see and we say: things are not as they could be, things are not as they should be. Pope Francis calls this “not as the should be” “the cry of the Earth and the cry of the poor.”

Pope Francis reminds us, or awakens us, to the fact that “purchasing is always a moral and not just an economic choice,” he writes, this also from his encyclical Laudato Si that “…we still lack the culture needed to confront …” the crises that are afflicting life on earth.” He says, “We lack leadership capable of striking out on new paths and meeting the needs of the present with concern for all and without prejudice towards coming generations.” I consider this forum, these engagements, this ministry of ICCR, the very place where such leaders can be and are being formed. And I give thanks to God for the chance to walk with you in your work. I close the way Pope Francis closed his encyclical on care for creation, Laudato Sí: “Let us sing as we go. May our struggles and our concern for this planet never take away the joy of our hope.”

ICCR 2018 Proxy Resolutions and Voting Guide

A key tenet of socially responsible investing is the voting of proxies. Proxy voting gives shareholders a say in the workings of corporations, allowing those who own the company to decide on matters of corporate governance. Reviewing both company and shareholder sponsored resolutions is critical in supporting good governance and effective socially responsible practices.

ICCR recently published their 2018 Proxy Resolutions and Voting Guide (download here). This annual Guide has been published since 1974.  This year’s Guide outlines the proxy season, contextualizes the 10 issue areas, and provides the language of the 266 resolutions that were filed by ICCR members. It also describes shareholder advocacy and the proxy process (pg 213). They hosted a webinar (slides here; listen here) to provide an overview of the proxy season and profile a few of most important campaigns including: gender pay gap and paid family leave; ethical labor recruitment; methane emissions; pollinator decline; and drug pricing and the opioid crisis. ICCR members have already negotiated 33 substantive agreements with companies, and have withdrawn their resolutions as a result. Successes include:

  • Costco agreed to disclose its gender and race-based pay gaps;
  • T. Rowe Price has hired a new responsible investing official;
  • AT&T agreed to its first-ever disclosure on key sustainability goals;
  • Marten and Saia agreed to begin training their drivers to spot human trafficking;
  • WEC Energy Group agreed to prepare a 2 degree scenario assessment report (led by School Sisters of Notre Dame).

You are encouraged to use ICCR’s Proxy Resolutions and Voting Guide to vote your proxies or to ask your asset manager to vote them for you.

SGI joins investors to call on companies to stay the course on Bangladesh Accord

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.

Members of the Bangladesh Investor Initiative issued a statement today calling on companies sourcing from the Bangladesh apparel sector to renew their commitment to protect worker health and safety by endorsing the three-year extension of the Accord on Fire and Building Safety in Bangladesh (Accord).

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:

  1. Accord companies, who have yet to sign the 2018 Accord, do so during the first Quarter of this year.
  2. 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.
  3. 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.
  4. Brands, retailers and other stakeholders strengthen the National Tripartite Plan of Action on Fire Safety and Structural Integrity in Bangladesh’s garment sector to ensure an integrated approach to promoting fire safety and building integrity, and to provide a platform for stakeholders engaged in fire safety initiatives.

“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.”

The Guardian profiles Sr. Nora Nash

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.

Please, visit the article. Perhaps you may even share it with others who may wish to learn more about socially responsible investment. Again, the article is found here:

Investors say executive pay packages at pharma may incentivize drug pricing risks

Today, the ICCR published a press release about resolutions filed with five U.S. pharmaceutical companies. SGI members are co-filers on each of the five resolutions. These resolutions are important components of SGI’s activity this year in health. The resolutions can be described as tools to gain insight into how executive compensation aligns with the values, vision, and business strategy of the companies.

This post will be updated with media coverage:

The press release is shared in full below.

Investors say executive pay packages at pharma may incentivize drug pricing risks

Dec 13th 2017

In resolutions at five U.S. drug makers, investors request a review of compensation policies that may drive senior execs to ignore the long-term business risks of skyrocketing drug costs.

NEW YORK, NY, Wednesday, December 13, 2017 – Investors today announced they have filed resolutions at five major pharmaceutical companies asking for information about how well executive pay incentives mitigate long-term financial risks associated with mounting public concerns over the affordability of prescription medicines.

The investors are all members of the Interfaith Center on Corporate Responsibility (ICCR), a shareholder coalition that has been engaging the pharma sector for decades on drug access and affordability. In the resolutions, the investors argue that an executive compensation incentive program reliant on revenue growth solely from drug price increases is a risky and unsustainable strategy.

The resolution specifically requests a report on the extent to which risks related to public concern over drug pricing strategies are reflected in executive compensation policies, plans and programs. Read the full resolution text here. The five companies receiving the resolutions are Abbvie, Amgen, Biogen, Bristol Myers Squibb, and Eli Lilly. ICCR members also filed a separate but similar resolution at Pfizer and Vertex requesting a report on the business risks from rising pressure to contain U.S. prescription drug prices.

“As investors in these companies, we are concerned that misaligned incentive pay may encourage executives to sacrifice long-term, organic growth from drug discovery for short-term, ‘quick fix’ strategies that may pose business risks,” said Meredith Miller of the UAW Retiree Medical Benefits Trust.

Public anxiety over drug prices has soared in recent years as millions of Americans struggle to afford the essential medicines needed to maintain their health. Scandals over excessive price hikes at several pharma companies have made the pharma industry the target of Congressional hearings, law suits, denials of coverage from insurers and ballot initiatives in several states which would force manufacturers to negotiate the prices of key medicines with government agencies such as Medicare and Medicaid.

Against this backdrop, the investors say, companies need to prove to their investors and to the public that they are doing everything possible to control drug prices in order to manage business and brand risk. The investors view executive incentive programs as a governance tool designed to ensure adequate oversight of risk and alignment of corporate strategies with mission.

Said Donna Meyer of Mercy Investment Services, “The increased scrutiny around drug pricing and how it is being managed by pharma management has had reputational consequences for the entire industry. Our resolution request is very straightforward: an evaluation of how these concerns are being integrated into corporate governance structures. To the degree that executive incentives reflect a company’s mission and growth strategies, this is clearly a critical and material issue for investors.”

“Our goal is to better understand what oversight these pharmaceutical company boards are exercising when executive incentives are tied so closely to profits,” said Cathy Rowan, who represents Trinity Health as a member of ICCR. “When these profits appear to be derived wholly from price hikes, it raises concerns among those of us who care about access to, and the affordability of, medicines — particularly for vulnerable populations like women, children and seniors.”

Investors are expected to vote on the resolutions at each company’s 2018 annual meeting of shareholders.

SGI Webinar Recording: Navigating the ICCR and SGI Websites

During our November member meeting, we announced our plan to conduct quarterly webinars to educate SGI Members on ICCR issues and processes. At the time, we agreed to start with an orientation of ICCR’s and SGI’s websites. We were fortunate to have Julie Wokaty of ICCR join us to give us a tour of ICCR’s website and Chris Cox to do the same for SGI’s website.

A recording of the webinar can be found here. The slides from Chris’ presentation on using social media for corporate social responsibility are here.

We will maintain an index of webinars and links to the recordings on our Resources page.