SGI launches new four-year strategy

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

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We are still grappling with the “new normal” and the remnants of an out of date structure which put those who are most vulnerable, last.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.

Time to Reckon with Insider Trading

News outlets have unleashed an avalanche of allegations of insider trading:

These articles heighten a sense to ordinary people that the system is rigged; they call for significant action, but major problems remain unattended.

Insider trading consists of buying or selling a security, being in possession of material, nonpublic information (MNPI) about the security, in breach of a fiduciary duty or other relationship of trust and confidence. The action is damaging whether one is the person who shared or “tipped” the information or the person who traded the securities based on the information. The trading can occur in the anticipation of “bad” news for a company, selling before the stock crashes, or it may coincide with the announcement of favorable news and a stock rising to new heights.

As executives and board members regularly are exposed to MNPI, the window of opportunity to trade their own shares without violating insider trading rules is narrow. So, the SEC adopted Rule 10b5-1 in 2000, which allows insiders of publicly-traded corporations to set up a trading plan – whereby the executive sells a predetermined number of shares at predetermined intervals –  to facilitate effective selling of personal shares of company stock.

Professor Daniel Taylor of the Wharton School at the University of Pennsylvania has done a deep dive into Rule 10b5-1, and his research has exposed some “cracks” in this system that are ripe for abuse. He and his colleagues reported on some “red flags” in January of 2021:

  1.  An archaic paper-filing system for sales from Rule 10b5-1 plans. A simple remedy is to make them digital and put on the SEC website through the EDGAR portal.
  2. Rule 10b5-1 requires no interval between the creation of a plan and its execution. A recent study found that more than one-third of the plans adopted in a given quarter saw an insider execute a trade before that quarter’s earnings announcement, avoiding considerable losses. A remedy to restore confidence would be to require a cooling off period of four to six months.
  3. Some insiders create Rule 10b5-1 plans to effect a single trade. Prohibiting this option makes for a reasonable remedy.
  4. Some insiders create multiple Rule 10b5-1 plans to run concurrently and cancel all but the most advantageous plans. Prohibiting a single person or entity to have more than one Rule 10b5-1 plan at a time would advance the credibility of the system.
  5. Currently, the Form 4 disclosures of insider trades lack relevant information. The date of plan adoption or modification provides greater transparency.
  6. Boards and/or compensation committees may not be giving sufficient oversight to the issue. The board or compensation committee should monitor executive stock sales.

(If you prefer a podcast, Taylor describes the issue here.)

In June, Chairman Gary Gensler acknowledged that “these plans have led to real cracks in our insider trading regime” and asked the SEC staff for recommendations on how to “freshen up” Rule 10b5-1. As well, the Investor-as-Owner Subcommittee of the SEC Investor Advisory Committee has released draft recommendations and discussed the topic at its September meeting.

Even if the studies by Professor Taylor and his peers cannot determine with absolute certainty whether any insiders that avoided losses or otherwise achieved “market-beating returns” actually traded on the basis of MNPI misses the point; insider trades must not only be legal, they must also appear ethical. The current system allows for far too much ethical ambiguity and erodes basic trust in the common good.

“Effective governance is a pillar of sustainable companies,” according to Cindy Bohlen of Riverwater Partners. “Executive alignment with company success is a governance factor considered important by many investors, including Riverwater. It is imperative that insider trading rules allow executives to share in the success of the businesses they run, while at the same time ensuring they are not afforded preferential outcomes given their insider status.”

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

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!

John Ruggie, human rights icon, dies at 76

Some SGI members may not recognize his name, but much of our work in human rights over the last 20 years has been built upon John Ruggie’s vision, imagination, determination, and political skill.

John G. Ruggie, a Harvard professor who developed the U.N. Global Compact and its Guiding Principles on Business and Human Rights (UNGPs), died on Thursday, September 16, at age 76.

SGI joins with so many who mourn the passing of this icon in human rights. May we, who believe in the work that he advanced, continue the efforts that he initiated.

Ruggie was a professor at Harvard’s Kennedy School of Government. From 1997-2001, he served as United Nations Assistant Secretary-General for Strategic Planning, a post created specifically for him by then Secretary-General Kofi Annan. His areas of responsibility included assisting the Secretary-General in establishing and overseeing the UN Global Compact, now the world’s largest corporate citizenship initiative; proposing and gaining General Assembly approval for the Millennium Development Goals; and broadly contributing to the effort at institutional reform and renewal for which Annan and the United Nations as a whole were awarded the Nobel Peace Prize in 2001. In 2005, Annan appointed Ruggie as the UN Secretary-General’s Special Representative for Business and Human Rights, tasked with proposing measures to strengthen the human rights performance of the global business sector. In June 2011 the UN Human Rights Council, in an unprecedented step, unanimously endorsed the UNGPs that Professor Ruggie developed through extensive consultations, pilot projects and research. The UNGPs, dubbed the “Ruggie Principles,” celebrated their 10th anniversary this year.

I’d recommend reading these tributes to his work: