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.

“Come now, let us set things right”

“Come now, let us set things right, says the Lord.” (Isaiah 1:18)

Upon hearing those words from Isaiah, my heart was drawn to the recent events in Parkland, Florida. How can we, how can I “set things right?” We cannot bring back those 17 who died at Marjory Stoneman Douglas High School. Nor can we bring back the two killed at Kentucky’s Marshall County High School (Jan 2018), nor the three at New Mexico’s Aztec High School (Dec 2017), nor the six at California’s Rancho Tehama Elementary School (Nov 2017), nor any of those many tragedies among school shootings in the U.S.

The youth from Marjory Stoneman Douglas High School have undertaken a herculean task: getting Congressional action on guns. At this point, Congress remains crippled. If Congress passes comprehensive background checks for gun sales, raises the minimum legal age for gun purchases, and restricts the sale of certain firearms, the inspired leadership from students Emma González and David Hogg will have accomplished a miracle of biblical proportions.

Do Not Stand Idly By details actions that local and state public officials can take, including identifying “bad-apple” gun dealers and changing firearm procurement policies for local law enforcement. They also have some modest and meaningful proposals for firearms manufacturers, including building a network of reputable dealers and deploying smart technologies in firearm safety. In spite of the availability of new technologies, gun makers have not chosen to deploy them. A simple way to see it is to compare a common firearm and a cell phone. The average cell phone has greater and more extensive security than any firearm on the market in the U.S., but the firearm is much more lethal than the cell phone.

For our part as shareholders, how can we “set things right?” Some (under the hashtag of #BoycottNRA) have pressured companies to break agreements and preferences extended to the National Rifle Association (NRA). A host of firms have ended partnerships with the NRA. has provided a running list of companies that have ended their agreements with the NRA hereBlackstone, a large private equity asset management group, called its outside fund managers to make a report over the weekend about investments in firearms.  FedEx seems to gone further than most other companies who merely ended partnership agreements. FedEx offered a statement that expressed specific values about assault weapons.

Barron’s Reshma Kapadia outlined a strategy in a recent article: “We’re All Gun Owners, and Here’s Why.” Kapadia explains that even Florida teachers, via their retirement funds, hold shares in the companies that make the AR-15 rifle. Vanguard and BlackRock hold major stakes in the three manufacturers of firearms. The gun makers are small relative the size of the two large funds, the value of a “rounding error” according to Kapadia, but she notes: “The gun makers may not matter to asset managers, but the reverse isn’t true. The fund giants help keep the stocks of gun makers afloat.” At least 16 banks, including Bank of America, Capital One, JPMogran Chase, U.S. Bank, and Wells Fargo, also are significant shareholders in firearms manufacturers.

Reuters reports that BlackRock has not remained idle: “BlackRock puts gunmakers on notice after Florida school shooting.” The article duly notes that BlackRock has not defined what actions it will take. For my part, I’d recommend that BlackRock join with Sr. Judy Byron, O.P. who filed resolutions with American Outdoor Brands (Smith & Wesson) and Sturm Ruger. The resolutions ask the companies to report on their activities related to gun safety measures and the mitigation of harm associated with gun products, including efforts to research and produce safer guns and gun products, and to assess the reputational and financial risks they face from gun violence in the U.S.

Let us commit ourselves to “set things right.” Even the words from Isaiah that precede it deeply resonate with our work in corporate social responsibility: “Make justice your aim: redress the wronged, hear the orphan’s plea, defend the widow” (Isaiah 1:17). Let us not be deaf to the cries of school children. Let us not fail to act.

ICCR has a press release about the resolutions here

SGI members score progress with utilities on climate change

This year, SGI members filed resolutions with two midwestern utilities: CMS Energy and WEC Energy Group. Each resolution aimed for the public disclosure of an assessment of the long-term business impacts of limiting global warming to under 2-degrees Celsius, as adopted by the Paris Climate Agreement.

We have great news: both resolutions have been withdrawn as the companies agreed to the main components of the resolutions. Despite the Trump administration’s decision to end the Clean Power Plan, both midwestern utilities rise to meet the challenges of climate change. In fact, CMS announced last week that they reduce carbon emissions by 80 percent and no longer using coal to generate electricity by 2040.

Sr. Ruth Geraets, PBVM of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, SD who led the filing of the resolution at CMS Energy said, “My congregation is concerned about climate change and the critical need to reduce greenhouse emissions because our mission calls us to care for creation. As longterm shareholders in CMS, we believe having a strategy in place to meet climate challenges head-on will improve CMS’ competitive position over the long term. We were pleased to see CMS step up to this challenge with its recently announced clean energy breakthrough goals.”

With respect to the dialogue with WEC Energy Group, on behalf of the School Sisters of Notre Dame, Central Pacific Province, Tim Dewane said, “Pope Francis has said, ‘Reducing greenhouse gases requires honesty, courage and responsibility.’ We thank WEC Energy Group for its efforts in this regard so far. We believe they are not only good for the planet, but they are also in the bottom-line best interests of the company, its customers and shareholders.”

“These two utility companies are climate leaders in the Midwest,” said Frank Sherman, Executive Director of SGI. “They recognize that market forces and their customer base are pushing them to exceed federal climate regulations and state renewable portfolio standards. Although they are big companies, utilities have a very local focus and are highly dependent on the social license granted by the communities where they operate.”

Our partners at ICCR shared a press release about this win which can be found here.

SGI members join investor letter to Walt Disney regarding tobacco depictions in films

When CEO Bob Iger said, during a Q&A session at Disney’s 2015 annual shareholder meeting, the company will “absolutely prohibit” the use of smoking in Disney films rated PG-13 and under, faith-based investors lauded the decision. It built on a prior commitment from 2007 that prohibited smoking in Disney films, but not yet across their brands.

The 2015 commitment was not a decision limited to certain labels: “We are extending our policy to prohibit smoking in movies across the board: Marvel, Lucas, Pixar, and Disney films,” said Iger. Iger offered only two exceptions: films which involve historical figures known for smoking, or scenes that portray smoking in a negative light (emphasizing the detrimental health consequences of smoking). Disney’s full policy can be found here.

In December of 2017, Disney acquired Fox film and television for $52 billion. It remains unclear what Disney will do with the new acquisitions.

SGI and its members joined other investors in a letter to Disney that calls upon the company to apply the same standards to the film and television properties acquired from Fox that it applies to other film and television holdings already within its portfolio.

Again, read the full investor letter here.

SGI Webinar Recording: Immigration and the Shareholder

We offer hearty thanks to Hannah Evans Graf of the Friends Committee on National Legislation (also co-chair of the Interfaith Immigration Coalition) and Dylan Corbett from the Hope Border Institute who joined us for the webinar. Also, to our members and allies from within ICCR or other networks, we are grateful that you joined us.

If you are only seeing this for the first time now, in the webinar we:

  • Reviewed our values and commitments on immigration
  • Assessed the state of play on policy
  • Highlighted what some allies are doing
  • Encouraged deeper investor engagement with our companies around concerns on immigration (e.g., the shareholder letter to JPMorgan Chase concerning investment in private prisons and immigration detention centers)
The slides from the webinar are available here.

Some helpful resources include:

Please, consider evaluating the webinar by clicking here.

SGI Member Webinar on Immigration: February 16th

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 on immigration
  • Assess the state of play on policy
  • Highlight what some allies are doing
  • Encourage deeper investor engagement with our companies around concerns on immigration (e.g., the shareholder letter to JPMorgan Chase concerning investment in private prisons and immigration detention centers)
We are very excited that Hannah Evans Graf of the Friends Committee on National Legislation (also co-chair of the Interfaith Immigration Coalition) and Dylan Corbett from the Hope Border Institute will be with us for the webinar.

Feel free to share this invitation with people within your network. For how to join the webinar, please, contact Christopher Cox, our associate director at

BlackRock CEO challenges companies to “serve a social purpose”

Larry Fink, CEO of BlackRock, called for corporations to act with social responsibility and to see beyond short-term gains in his annual letter to S & P 500 CEOs. The critical paragraph reads:

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.

Larry Fink, CEO, BlackRock (courtesy of FT)

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:

Pick your least favorite public company — guns or tobacco or oil or opioids or Facebook or whatever you think is doing the most harm to society — and BlackRock Inc. is among the top five holders. Fink’s threat — contribute to society or you’ll lose BlackRock’s support — rings a bit hollow since BlackRock’s index funds can’t sell. (They can vote against directors, sure, but what exactly do you want a gun maker’s directors to do?)

Aside from supporting the ICCR proposal to enhance Exxon Mobile’s climate disclosures, BlackRock has  avoided shareholder advocacy in the past. If BlackRock genuinely engages, it has an opportunity to dramatically move the needle in favor of corporate social responsibility.