Category: SGI

Do You Consider Yourself To Be An Activist?

Do You Consider Yourself To Be An Activist?

sgicoalition

By Frank Sherman

I was at a sustainability conference last week that was attended mostly by business and academia. After introducing myself and SGI at our table, I was asked “Do you consider yourself to be an activist?”

I hesitated for what felt like an eternity. What a loaded question! Was this a trap? Did he think I was going to the Milwaukee Art Museum after the conference to throw tomato soup on the paintings and glue my hands to the wall?

Given all the buzz about “anti-ESG,” “woke capitalism,” and “socialist political agenda” these days, I didn’t want to play into the culture war narrative. Republicans candidates for financial offices in Arizona, Florida, Illinois, Kansas, and Minnesota have all taken anti-ESG positions. They and other Republicans say big financial firms are abusing their power to advance a liberal agenda on issues like diversity, social justice and, especially, climate change. One Senator even accused Blackrock of breaking antitrust laws by being a member of the Climate Action 100+ coalition (which includes SGI, by the way). 

Most of the general public don’t understand what ESG means. The simplest description is a set of environmental, social, and governance considerations that investors use to try to understand risks and opportunities that aren’t accounted for in traditional financial models. For example, environmental risks like climate change present physical and transition risks that are not reflected in a company’s P&L or balance sheet. Another risk unaccounted for in the company’s financial statements are their impacts on human rights: to their employees, suppliers, customers and society at large. Although not recognized in financial reporting, these risks are very real…to individual companies and to the economy as a whole. They vary by region, industry, and individual company. Most investors and the public are blind to the magnitude of these risks. As society’s awareness of these risks increases, asset managers large and small are taking them into account in their portfolio management and corporate engagements.

Companies like Blackrock are pushing back on state laws which try to protect the fossil fuel industry (e.g. TX, WV) by explaining that ESG strategies are part of their fiduciary duty to manage material risks for their clients. But is that why SGI members use the ESG strategies? Is our sole incentive to manage long-term financial risks?

That’s part of it, no doubt. We are responsible for managing these funds as an obligation to our community members or clients. But SGI’s mission statement states that we also want to “to build a more just and sustainable world for those most vulnerable.” Our fiduciary duty goes beyond getting an adequate return on investment to also promote human dignity, act justly, enhance the common good, and provide care for the environment. The recently updated USCCB SRI guidelines speak to this double objective. The Guidelines are based on two principles: responsible financial stewardship and ethical & social stewardship based on Catholic moral principles. They espouse three strategies: Avoid Doing Harm, Actively Work for Change, and Promote the Common Good.

In addition to managing financial risks, SGI members view shareholder engagement with corporations as a powerful catalyst for social change. ICCR’s tag-line – “inspired by faith, committed to action” – sets forth our pledge to be active owners. Although I wouldn’t label SGI members as “activists,” we have been active owners for nearly 50 years. And I wouldn’t describe our capitalism as “woke” yet, but people are starting to wake up to the fact that the economy is supposed to serve society rather than the other way around.

Back to my conference table… I don’t think I answered the question posed to me very well at the time. With more time to reflect, I would respond that rather than an activist, I would describe SGI members as active owners inspired by faith!

Some helpful resources concerning the pushback on ESG investing:

2021 – A Year of Resilience

2021 – A Year of Resilience

Chris Cox

Likely, we all thought the pandemic would be over sometime in 2021, and our hopes rose and fell with the daily infection counts. The vaccines worked better than expected, restrictions were relaxed, and things started to return to normal. Then came the COVID variants, which threw a wrench into our hopes for a swift recovery, and Omicron raises the specter of a deadly winter.

While the year had its joys, we would be remiss if we neglected to recall that, in our personal lives, SGI members and staff also mourned losses, including one who endured the loss of a daughter, and weathered storms.

The great problems that we face, such as racism, poverty and the climate crisis, are structural in nature. With long histories, they are embedded socially in ways that are often masked in day-to-day life.

Sadly, we learned on January 6th that the U.S., like so many places around the globe, is an all-too-fragile democracy, vulnerable to demagoguery and the exploitation of populist sentiment. Aware that corporate donations contributed to the chaos, shareholder calls for greater corporate political spending and lobbying disclosure garnered higher support than usual.

This year we saw what is possible as the 2021 Proxy Season provided a watershed moment in shareholder advocacy with record-breaking support for environmental proposals (Exxon Mobil being a case in point). SGI members drove a series of significant corporate engagements including Walmart, Merck, Restaurant Brands International, Wendy’s, Yum! Brands, and Kraft Heinz.

After President Biden’s increased the 2030 NDC to reduce GHG by 50%, the 26th meeting of the UN Conference of the Parties (COP26) fell short of expectations. However, important pledges on deforestation and methane and the phase down of coal and fossil fuel subsidies were steps forward. Senator Joe Manchin’s declaration that he opposes the Build Back Better reconciliation bill makes the administration’s task of meeting its climate goals far more difficult. As corporations and asset managers make net-zero commitments, Milton Friedman is turning in his grave; but it would be unwise to trust that companies will deliver on their promises, without investor pressure and third-party verification.

As we wrap up 2021, we look back at an amazing year. SGI has grown to 36 institutional members, elected a new board president and added new board members, including at-large members. We refreshed our strategic plan and hosted a great conference on Resilience: Building a Just & Equitable Economy for All. Our mission to build a more just and sustainable world for those most vulnerable continues in 2022. In the New Year, SGI will be hosting events to better understand the revised U.S. Catholic Conference of Bishops Guidelines for Socially Responsible Investment. We will advocate for the critical components of the Build Back Better plan. And we will work with companies to live out their societal purpose. As we end another year marked by both pain and hope, we want to thank you, our members, for your contributions to our ministry. Shareholder advocacy works. May the holiday season refresh all of us for our important work for people and planet in the New Year.

SGI launches new four-year strategy

SGI launches new four-year strategy

Chris Cox

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

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

Natalie Wasek

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.

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

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

Chris Cox

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!

Sisters of St. Francis of Assisi Rejoin SGI

Sisters of St. Francis of Assisi Rejoin SGI

Chris Cox

SGI is in the midst of welcoming new members. We will features some brief profiles of them so that the broader membership has an opportunity to welcome them. Our first new member is really a member who rejoins us. The Sisters of Sr. Francis of Assisi have been members of SGI through many years. The membership lapsed a few years back, and, now, we are delighted to renew our collaboration!

Jill & Steven Haberman, the community’s Justice and Peace Animators, share the following:

The Sisters of St. Francis of Assisi is a community of women religious with a 172-year history of acting on Franciscan Christian values in the world. Trusting in God’s providence, the sisters strive to live the Gospel by nurturing a deep sense of the worth of every person and of all creation. They have a longstanding commitment to social justice action and socially responsible investing. Their relationship with SGI has its roots in Irene Senn’s work with Fr. Mike Crosby. We are delighted to rejoin this collaboration!

As the current Justice and Peace Animators, we are the SGI member contacts for our congregation. We are new to the role, having spent years as middle and high school Catholic educators, including mission teaching on the Texas/Mexico border and in Appalachian Kentucky. Steven also worked for three years against the death penalty in Texas. Social justice is always close to our hearts.

Areas of action we would like to focus include anti-racism, human trafficking, care of creation, and immigration. Thank you for making us feel so welcome; we look forward to working with this dynamic group.

We offer a hearty welcome to the Sisters of St. Francis as we continue our collaboration in building a more just and sustainable world!

Human Rights Remain a Focus

Human Rights Remain a Focus

Natalie Wasek

SGI members have been engaging mac & cheese and ketchup producer, Kraft Heinz, on issues including nutrition, deforestation, and human rights for several years. In 2019, Kraft Heinz published a Human Rights Policy after withdrawal of a shareholder resolution filed by The Capuchin Province of St. Joseph. Subsequently, after an ESG materiality assessment, Kraft Heinz ranked human rights as among the issues with the greatest impact on the company and of most importance to its stakeholders. 

The Capuchins and other SGI and ICCR members continued to engage the company on the implementation of their new policy. However, their lack of transparency and slow progress on implementing a due diligence process resulted in a low score of 21 out of 100, ranking 27 out of 43 companies on the most recent Know the Chain Benchmark, which has also identified tomatoes, cattle, and coffee being sourced by Kraft Heinz as having a high risk of human rights abuses. This was further confirmed by the Corporate Human Rights Benchmark who scored Kraft Heinz 7.5 out of 26, including 0 points on Human Rights Due Diligence. 

Given this lack of progress, SGI members filed a second proposal asking the company to complete a Human Rights Impact Assessment to “mitigate against significant operational, financial, and reputational risks associated with negative human rights impacts throughout its supply chain.” Although the company undertook a global human rights risk assessment last year, they did not publish plans to complete a due diligence process. However, they have committed to undertake third-party due diligence audits prioritizing the most problematic countries and commodities identified in its risk assessment. Kraft Heinz further acknowledged that social audits are not designed to capture sensitive labor and human rights violations such as forced labor and harassment, and their due diligence audits will engage workers in a meaningful way to determine root causes and address remediation and capacity building. Based on this commitment, shareholders withdrew the proposal.

Despite the movement that we are seeing from the company, Kraft Heinz remains one of 106 companies whom ICCR members and allies are engaging on their weak human rights policy implementation. ICCR’s Investor Alliance for Human Rights reached out to those 106 companies, including others engaged by SGI members: Kohl’s, Macy’s, Phillips 66, TJX, and Yum! Brands, about scoring 0 across the human rights due diligence indicators in the Corporate Human Rights Benchmark (CHRB) 2020 Report. 

The statement sent to each company explains that “Companies need to know and show their respect for human rights under the UN Guiding Principles for Human Rights, through public disclosure of the implementation and ongoing results of human rights due diligence processes.” Similar to corporate greenwashing, companies often rely on policies, codes of conduct, and traditional audits which have been shown to be insufficient in addressing and remediating human rights impacts.

While it is important for a company to understand their material financial risks, a holistic human rights policy requires understanding of their salient risks. These salient risks focus on the risks to people rather than the financial performance of the company. Implementing a human rights policy and doing the proper due diligence is required for a social license to operate and should not create an internal dilemma. This is about fair and just treatment of people. It is not a question of if this needs to be done; it is a question of why it has not already been done. 

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.