SGI joins Major U.S. Companies and Investors To Urge Congress to LEAD on Climate

SGI participated in a delegation of more than 100 large companies and investors to meet with key lawmakers of both parties this week to ask them to LEAD on Climate 2022. It was a united call for Congress to pass an ambitious package of federal clean energy, transportation, infrastructure, and advanced manufacturing investments.

Best Buy, bp America, Gap, General Mills, HPand Microsoft were among the major U.S. employers, innovators, and manufacturers spanning all sectors of the economy participating in this advocacy event. Representatives from the participating organizations met with lawmakers and Congressional staff on Wednesday, May 11, and Thursday, May 12, in virtual forums. 90 meetings were scheduled over this two-day period.

View the full list of LEAD on Climate 2022 participants here.

This fourth annual business advocacy event gives leading companies and investors the opportunity to make the strong economic case for federal climate action, elevating their calls for clean energy and environmental justice investments that will bolster the nation’s competitiveness, lower energy costs, strengthen domestic supply chains, and confront the threat of the climate crisis. U.S. Sen. Sheldon Whitehouse, Siemens Corporation’s Barbara Humpton, PSEG’s Ralph Izzo, and Hannon Armstrong’s Susan Nickey participated in a virtual roundtable and media briefing as part of LEAD on Climate 2022 on May 11th.

Representing SGI in the meetings, associate director Chris Cox said, “Fr. Mike Crosby began making the moral and business case for addressing climate change decades ago. It’s an honor to continue this work in pressing for environmental justice, as the harms of climate fall most heavily on the poor, those on the periphery.”

Organized by the sustainability nonprofit Ceres, LEAD on Climate 2022 features companies and investors that collectively count more than $1.6 trillion in annual revenue and $4.6 trillion in assets under management, and that employ more than 3 million people in all 50 states. The event comes at a critical time when Congress considers major investments in clean energy, transportation, and infrastructure, as well as the advanced manufacturing and supply chain capabilities to support it, either through a budget reconciliation deal or a bipartisan energy package.

Specifically, companies and investors are calling for Congress to:

  • Meet the urgency and scale of the climate crisis with ambitious federal investments to accelerate the transition to affordable, secure, domestic clean energy.
  • Seize the economic opportunities to lead the world in clean energy manufacturing and deployment to create jobs, spur innovation, strengthen supply chains, and reduce costs and price volatility for businesses and consumers. 
  • Tackle inequity by targeting climate and clean energy investments in disadvantaged, rural, and frontline energy communities.

This is the second year that SGI has supported Ceres’ LEAD on Climate. With the midterm elections quickly approaching, the window is closing for the last, best chance of getting significant federal climate and clean energy investments passed in time to meet our climate, energy, and economic security goals.

Click here to watch the full recording of the roundtable and media briefing.

Walmart Hits a Double on Responsible Climate Lobbying Disclosure

By Frank Sherman

“Climate change is one of the greatest challenges of our time, profoundly affecting all regions of the world and all sectors of society. . . . Companies need to be part of the solution to manage physical and transition risk, maintain societal license to operate and create value for business and society through mitigation and adaptation initiatives that draw on unique business capabilities.”

Walmart, 2021 ESG Summary

At first glance, this may be mistaken as an excerpt from an environmental NGO website rather than from the largest corporation in the world. But Walmart has long been recognized by many as a leader in climate action.  They were the first retailer to obtain SBTi certified greenhouse gas (GHG) targets and the first to make a zero emissions commitment that does not rely on carbon offsets for scope 1 & 2 emissions. Committed to 100% renewable electricity by 2035, they have also been recognized as the top retail partner by the U.S. EPA Green Power Partnership. EPA’s SmartWay Excellence Award for shipping performance recognized Walmart for the fifth year in a row. Their award winning Project Gigaton targets a reduction of at least 30% of estimated scope 3 emissions by 2030. No wonder they made CDP Climate’s ‘A List’ for several years.

But one area where Walmart, along with many other companies, has fallen short is in its engagement on climate public policy. That’s why SGI member, the School Sisters of Notre Dame, Central Pacific Province (SSND), filed a shareholder resolution with the Company, as part of a broader campaign coordinated by ICCR and Ceres. According to Influence Map, Transition Pathways Initiative and Ceres, Walmart’s direct lobbying is supportive of the Paris Agreement. The SSND proposal asked Walmart to evaluate whether their indirect lobbying activities through trade associations and social welfare and nonprofit organizations are aligned with the company’s support of the Paris Agreement goals. We also asked the company to be more public in their support of robust climate policies rather than engaging policy makers ‘in private.’ The proponents withdrew the proposal after the Company agreed to improve their disclosure.

Following the withdrawal, Walmart strengthened their Government Relations Policy and made extensive updates to their Engagement in public policy webpage, providing details on governance, policy positions, engagement process, and examples of positive advocacy. They published a list of trade associations to which Walmart contributed funds of $25,000 or more in 2021. They actively engage their trade associations to influence their public policy positions. They note that the Business Roundtable’s (BRT) position towards climate policy, although not as strong as we would like, improved as a result of Walmart’s CEO Doug McMillon’s influence when he chaired the BRT.

To be fair, the goalpost on what constitutes “responsible climate lobbying” has been moving due to a number of factors including increasing calls from scientists for urgent action, such as the recent IPCC report. This culminated in the recently released Global Standard on Corporate Climate Lobbying describing 14 indicators to assess a company’s direct and indirect lobbying alignment with the Paris goal of limiting global temperature rise  to 1.5 degrees.

To be sure, there are areas where Walmart’s disclosure and practices can be improved. The main shortfall vs. the new global standard is the lack of a detailed public assessment of each trade association’s climate policy positions and how well it aligns with the Paris goals and the Company’s position. An increasing number of multinational companies are doing this assessment of their indirect climate lobbying through trade associations and nonprofits they fund, evaluating the actions they are taking to support or undermine the Paris Agreement goal of 1.5 degrees. The Company states, “If a relationship—on balance—does not align with our priorities, we would end ties with the organization altogether,” which they did a few years ago when they exited the Chamber of Commerce. “I wouldn’t say they hit a homerun, but it’s safe to say they made it to second base,” said Tim Dewane, Director of Shalom – the Office of Justice, Peace, and Integrity of Creation for the School Sisters of Notre Dame, Central Pacific Province, the lead proponent of the resolution. “We have to continue to work to get them home.

What’s all the Fuss about Exxon Mobil and Investors lately?

By Sr. Barbara Jennings, CSJ

On May 26, 2021, a little known investment company called Engine No. 1 challenged and won a proxy battle with one of the world’s largest public oil and gas companies, Exxon Mobil.  Three of Engine No. 1’s four proposed Board Members who have qualified energy industry experience were elected to the board. They will challenge company management to transform their business model for a low carbon economy, which will benefit all stakeholders including workers and shareholders alike. 

Shareholder elected Greg Goff, former CEO of Andeavor and EVP of Marathon Petroleum who thinks that mitigating climate change is part of corporate responsibility; Kaisa Hietala, a former VP of Finnish renewable energy company, Neste Oyi; and Alexander Karsner, a strategist at Alphabet, Inc.  These three candidates beat out three of Exxon Mobil’s current, reelected board members. 

Shareholders proposals co-filed by members of the Seventh Generation Interfaith also received majority votes at the Exxon Mobil AGM. Dana Investments, the Capuchins, and the School Sisters of Notre Dame, Central Province co-filed a proposal asking for a report on climate lobbying (64% vote). The Sisters of St. Agnes co-filed the proposal asking for broader lobbying disclosure (55% vote). The Dubuque Franciscan’s co-filed the separate chair proposal (22% vote). Members of SGI and ICCR also co-filed successful climate proposals at Chevron, ConocoPhillips and Phillips66. 

Members of ICCR have dialogued and filed shareholder resolutions at Exxon Mobil since the early 1990’s. The company always responded with platitudes about their amoeba studies for alternative fuels, but refused to set targets or goals.  What has changed?

Here are my educated guesses:

  1. The Time has come! Finally, extreme weather events and consistent calls from scientists have increased public awareness of climate change, although a decreasing percentage remain climate deniers. Climate Activists like Greta Thunberg are finally getting through to all of us, especially to young people.
  2. It is irrefutable that drilling, and burning petroleum produces is a major cause of climate change as well as of human rights abuses. The latest IPCC report removed any uncertainty: “It is unequivocal that human influence has warmed the atmosphere, ocean and land.” 
  3. There is growing popularity of ESG strategies. It has become easier to invest sustainably through many asset managers. Bloomberg projects ESG assets may hit $53 trillion by 2025, a third of global AUM.
  4. The International Energy Agency (IEA) Net Zero by 2050: a Roadmap for the Global Energy Sector report published shortly before the Exxon Mobil AGM called on governments and companies to stop investment in new fossil fuel supply projects or coal plants; no sales of new internal combustion engine passenger cars after 2035; and net-zero emissions in the global electricity sector by 2040.
  5. Pope Francis continues to remind us to care for our common home. The Vatican released 14 recommended actions in June 2020, including ‘ethical responsible and integral criteria for investment decision making.” The Vatican Dicastery for Promoting Integral Human Development urges that Church divestment from fossil fuels and reinvestment in renewables is a moral imperative.
  6. The U. S. Catholic Bishops are reviewing their Socially Responsible Investment Guidelines for the first time in 20 years. Bishop Gregory Parkes, USCCB Treasurer, who worked in the banking industry before entering the priesthood, is seeing the “financial writing on the wall” for fossil fuel companies who will not or cannot diversify. 
  7. A U. S. House subcommittee is “demanding that Exxon Mobil, Shell, Chevron testify before Congress about the industry’s decades-long effort to wage disinformation campaigns around climate change.” (St. Louis PostDispach, July 3, 2021 and New York Times, June 16, 2021) 

The majority votes at Exxon Mobile indicate a tipping point in pushing fossil fuel companies to transition to low-carbon business models. SGI and ICCR members have persisted and led the way with corporate engagements…and are continuing to see success. 

Do You Know Where Your Asset Manager Is (on climate)?

By Frank Sherman

This article augments an earlier blog by John Mueller of Dana Investment Advisors on Questions to Ask Your Money Manager.

There is a growing recognition within the financial sector of its responsibility, as well as its power, to transition the economy to a low carbon future.  The Glasgow Financial Alliance for Net Zero (GFANZ), representing $70tn in assets, is committed to achieving the objective of the Paris Agreement to limit global temperature increases to 1.5°C. Combined with Net Zero commitments from countries representing approximately 70% of global GDP, it sounds like the world has turned the corner on climate change. However, there is a gap between these long term ambitions and short term actions. The latest round of UN Nationally Determined Contributions (NDC) put the world on track for less than a 1% reduction in emissions by 2030 vs. 45% called for by the Intergovernmental Panel on Climate Change (see Responsible Investor, Aug 17, 2021).

As a small asset owner, what can an SGI member do to ensure they are part of the solution rather than contributing to the problem? One easy strategy is to ask your asset manager about their climate stewardship activities, including proxy voting. The UN-convened Net-Zero Asset Owner Alliance, part of the GFANZ composed of over 40 institutional investors (including some ICCR members), recently released a new resource designed to help asset owners set expectations for, evaluate, and engage with asset managers on their climate-related proxy voting activities. As well, the resource is useful to asset owners who retain the right to vote their shares or to those asset owners with internally managed portfolios by integrating the principles into their own proxy voting and asset manager selection, appointment, and monitoring processes. These foundational guidelines are centered on four themes: governance, interest alignment, merit-based evaluation, and transparency. They help asset owners construct their own expectations of their asset managers’ proxy voting approaches.

Many asset managers have already made the commitment to align their portfolios with net-zero as part of the Net-Zero Asset Manager Initiative (NZAMI), which is also part of the GFANZ. Among the 128 signatories with $43tn in assets under management have already signed on to this Initiative are some of the biggies like Blackrock, Vanguard, and State Street. If you find your asset managers are part of NZAMI, you have the opportunity as a client to ask about how they are actualizing this goal within their management of their portfolio. If your asset managers have not yet signed on to NZAMI, you should ask them “why not?” I suggest you share this resource with your Investment Committee with a recommendation to review your own proxy voting guidelines and your expectations set with your asset management service providers. At the same time, you may want to challenge your Investment Committee to consider signing on to the Net-Zero Asset Owner Alliance themselves. As Blackrock’s Larry Fink has made clear, “climate risk is investment risk.”

SGI Joins Business Leaders In Calling For Aggressive Climate Targets

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.

Webinar: Fossil Fuels: Engage or Divest

On Monday, November 9th, the U.S. Federal Reserve Bank recognized climate as a risk. Investors of all types can no longer afford to be on auto-pilot concerning investments in fossil fuels. This webinar explores two options: active engagement or divestment. We hear from Rob Berridge and Morgan LaManna of Ceres on how the recommendations of the CA 100+ and the Task Force on Climate-related Financial Disclosures (TCFD) can enhance engagement with companies. We hear from Fr. Peter Bisson, S.J., former provincial of the Canadian Jesuit province. Under his leadership, the province became the first province to divest from fossil fuels shortly after Laudato Si’. Again, we are very grateful for the presence of Rob, Morgan, and Fr. Peter 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.

Chevron Investors Call for Climate Disclosure

This is the first of a series on the 2020 shareholder meetings

Chevron Corp.’s busy annual shareholder meeting this year featured seven shareholder proposals, on topics ranging from lobbying, climate, and human rights. Cindy Bohlen of Riverwater Investments and Mary Minette of Mercy Investment Services co-filed the human rights proposal led by Sister Nora Nash, OSF, asking the company to provide a report on Chevron’s effectiveness to prevent, mitigate, and remedy human rights impacts of its operations. We were pleased to have received a vote of 17% for a first-year proposal. Other proposals were presented to the company during the AGM by notable figures: Alec Baldwin, Roger Waters, and Jody Williams, which focused on governance issues, and pointed to Chevron’s 50-year involvement (through its acquisition of Texaco) in toxic pollution in Ecuador. 

Another resolution focusing on climate lobbying garnered a 53%, majority vote. The proposal asked the Company for a report explaining how it ensures its lobbying activities are aligned with the Paris climate accord and the goal of limiting global warming. This majority vote agrees with the investor push for companies to be more transparent about their lobbying activities, especially through their membership in trade associations. 

Recent news highlights why this resolution, and this vote, are critical for the Company. Amid the Black Lives Matter protests, news reports tie Chevron to a public affairs firm urging journalists to examine how green groups were claiming solidarity with black protesters while backing policies which would “hurt” minority communities. Naomi Oreskes, a Harvard University history professor and the co-author of “Merchants of Doubt” said that it is “remarkable that the Company tried to leverage national unrest about systemic racism and police violence to promote an expansion of oil and gas drilling.” While Chevron has denied the claims of being a part of this campaign, it raises the question of Chevron’s public statements supporting the Paris Agreement, while its lobbying activities send the opposite message. 

Additionally, the District of Columbia filed a lawsuit against Chevron and other oil and gas companies  for “systematically and intentionally misleading” consumers about the role their products play in causing climate change.” This lawsuit is of another way, of many, of which stakeholders are trying to hold the company accountable for its actions. 
SGI members are calling on Chevron and other corporations to respect human rights. As a member of the Business Roundtable, Chevron signed on to the new statement of purpose for corporations to serve all stakeholders. It’s time for Chevron to live up to their rhetoric!

Earth Day

While the term “climate change” had not been invoked by April 22, 1970, awareness of human involvement changing Earth induced a fear mixed with hope. Scientists could not see the future of our planet, and newspaper headlines at the time captured concern for the environment and for peace as protests surrounding the Vietnam War were met with groups putting cars on trial

And as most of the United States currently sits in the unknown because of the COVID-19, the Earth keeps turning. 

But with EPA rollbacks during a global pandemic, the US withdrawing from the ever-important Paris Agreement, and the impacts of the BP oil spill still being felt ten years later, it can be difficult to find those positives. But they do exist.

Many improvements have been made since that first Earth Day, now 50 years ago. The current National Geographic depicts how life expectancy has increased along with food production, more people have access to clean water and electricity, and pollution levels (overall) have fallen. Even during this crisis, we see renewable energy, like solar and wind, growing in capacity.

Coupled with this uncertainty of the environment, for me comes a feeling of nostalgia: remembering the saplings handed out to us in elementary school, thinking about the recycling program my grandmother started in her town, visualizing the passion Denis Hayes had in organizing the first Earth Day. These individual acts, small notions, and world movements all exude a hope of possibility of positive change. From a young age, environmental activists like Severn Suzuki, Greta Thurnberrg, and Delaney Reynolds witness to a heartfelt passion as vibrant as Hayes’. Students are urging their universities to divest from fossil fuels. Community gardens push back against the concrete that dominates our cities.  

On the first Earth Day, 50 years ago, New York City’s Mayor Lindsay put it simply; “Beyond words like ecology, environment, and pollution there is a simple question: Do we want to live or die?”

Don’t miss these two webinars!

Each year, ICCR and Ceres offer webinars that highlight resolutions filed by members. These webinars provide excellent guidance to institutional investors and individual investors concerning shareholder proposals in the coming proxy season. We cannot recommend highly enough your participation in both webinars.

  • ICCR’s 2020 Proxy Resolutions & Voting Guide Overview. ICCR member resolutions reflect some of the most hotly-debated themes in the national discourse, from the failure of energy companies to meaningfully respond to the climate crisis threatening our planet, to the role of corporations in perpetuating civil and human rights abuses through technology products, and the unrelenting rise in the cost of U.S. healthcare. Register here. (Thu, Feb 27, 10:30 a.m. – 11:30 a.m. Central) (UPDATE: 2020 Proxy Guide is here. Slides and recording are here. )
  • Business Case to Vote For 2020 Climate-Related Shareholder Proposals. An annual webinar presenting key climate-related shareholder proposals for the 2020 proxy season, and reasons why you should vote for them. Hosted by the Ceres Investor Network on Climate Risk and Sustainability. Register here. (Thu, Mar 12, 11:00 a.m. – 12:30 p.m. Central) 

Even if you cannot attend live, registration means that you will be sent a link to the slides and recording of the webinar. In other words, even in the event that you have a schedule conflict, it can be valuable to register and watch the webinar at another time. Please, register for these webinars!

Look Back at 2019: The Difference Between Hope & Despair

By Frank Sherman

As I reflect on 2019, there was plenty of news to discourage me: wars continue in the Middle East, and nations continue the proliferation of nuclear arms; refugee and migration crisis across multiple continents; rise of nationalism and hate crimes; growing wealth and income gaps; undeniable climate crisis, water scarcity, deforestation, and biodiversity loss…not to mention the rollback of regulations and social safety nets, polarization of political discourse, and impeachment hearings in our own country. A review of the global progress on the UN Sustainable Development Goals found that, despite progress in a number of areas, progress on some Goals has been slow or even reversed. “The most vulnerable people and countries continue to suffer the most and the global response has not been ambitious enough.”

But late last night, I was sent a message that woke me up. As I looked through the Capuchin Community Services 2020 calendar, a quote caught my eye. “The difference between hope and despair is a different way of telling stories from the same facts” (Alain de Botton, The School of Life, London).

I then thought of Greta Thunberg’s (Time Person of the Year) speech at the UN Climate Action Summit in September excoriating world leaders for their inaction in the climate crisis, and the student March For Our Lives demanding more gun control. I recalled watching CNN’s annual Heroes of the Year Awards honoring the top 10 men and women who are making the world a better place by helping families affected by tragedy, cleaning up the environment, protecting neglected animals, and so much more. I read that worldwide terrorist attacks actual fell by 33% compared to 2017, to the lowest level since 2011. This year scientists learned to spot Alzheimer’s earlier and got a step closer to curing diabetes. China, the largest greenhouse gas emitter, is becoming a leader in electric vehicles.  

I also find hope in the work of Seventh Generation Interfaith and ICCR. We added 10 new members with the merger with the Midwest Coalition to our coalition bringing the total to 39. This year our members engaged several companies in the food and apparel sector asking them to conduct human rights impact assessments and to develop a human rights policy. We continued our work with Midwestern electric utility companies to accelerate their decarbonization plans and ensure a just transition for employees and local communities. We leveraged the Business Roundtable’s statement on the Purpose of a Corporation to promote transparency in corporate political spending and lobbying. We challenged pharmaceutical companies to base their executive remuneration policies on innovation and patient outcomes rather than predatory pricing. We challenged companies to trace their supply chains back to the wildfires in the Amazon and asked them to meet their 2020 deforestation targets. We asked food brands and restaurants to improve their nutritional profile and follow marketing-to-children guidelines to fight obesity. We hosted our annual conference, this year on impact investing, in October. Our quarterly webinars, blog articles and weekly newsletters kept our members informed on our issues and trained on our tactics.

How will you tell your story this holiday season?

Blessing to you and your family and a hopeful New Year!