Tag: Featured

SGI Welcomes New SEC Climate Rule

SGI Welcomes New SEC Climate Rule

Natalie Wasek

The SEC issued the first ever climate-related disclosure rule earlier this week. In the 3-2 vote, commissioners adopted the rule requiring companies to disclose certain-climate related risks. This rule, which has been long awaited by investors, will require companies to disclose material climate-related risks, activities the company is taking to mitigate these risks, the Board oversight to the climate risk and mitigation, climate targets material to the business, as well as scope 1 and scope 2 emissions deemed material by the company, and reasonable attestation.

While this rule has been weakened from the proposed 2022 rule, Seventh Generation Interfaith, Inc. welcomes the final climate disclosure rule and the SEC’s consideration of our comments. SGI formally submitted one of thousands of comment letters with the proposal of the rule in 2022. In fact, the SGI comment letter was cited seven times by the SEC in the final rulemaking. This rulemaking brings the US closer in alignment to its global peers. SGI is committed to playing an active role in creating a more just and sustainable world. Investors have and will continue to seek clear, consistent, and comparable information on how companies are managing their climate- related risks and opportunities. 

We are disappointed that Scope 3 emission disclosure was omitted from the final rule as the omission will convey an incomplete picture of companies’ risk exposure. This omission means companies will not have to disclose a category of emissions that account for as much as 80-90% of total emissions in some industries. We hope that companies will provide this information to investors voluntarily. We also believe that companies that choose not to disclose Scope 3 emissions will fall and have already fallen behind peers as it will be required in  European reporting requirements under CSRD as well as California’s new disclosure laws. The new rule is a starting point, and higher achieving companies with more robust disclosure will produce greater long term value for shareholders.

Other resources on the new SEC Climate Rule:

Making progress on methane

Making progress on methane

Natalie Wasek

The United Nations Climate Summit (COP28), which took place in Dubai, recently ended with a monumental report that still falls short of necessary progress. World leaders, climate experts, at least 1,300 fossil fuel lobbyists, and one CEO of a large fossil fuel company attended the meetings. ExxonMobil CEO, Robert Woods, attended COP28, marking the first time the CEO of a large fossil fuel company attended the meetings. And sure, while Woods said the conversations  “put way too much emphasis on getting rid of fossil fuels, oil and gas” and not enough on “dealing with the emissions associated with them,” he at least was still part of the discussions. 

The long-awaited and contested COP report recognizes the need for a transition “away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.”

For the first time fossil fuels were explicitly discussed and named as a cause to the climate crisis. While the report’s vague language requires more work to ensure its potential, Mindy Lubber, CEO of Ceres, sums it up nicely: 

The agreement comes at an urgent moment. Extreme weather and other climate-related catastrophes are already causing hundreds of billions of dollars in damage each year. The world is at severe risk of far greater challenges as we are on track to miss the 2030 goals of the Paris Agreement and achieve a zero emissions economy in time to prevent catastrophic climate change. At the same time, governments, businesses, and investors have a monumental opportunity to invest in secure, affordable, and reliable clean energy technology that brings enormous economic benefits and job growth.

In addition to the climate talks at COP, other commitments concerning Methane Emissions recently showed some progress. 

Methane, a highly potent climate pollutant, that is responsible for approximately one-third of current warming resulting from human activities. While ExxonMobil, the world’s second largest oil refiner, reported making great progress on its methane emissions reduction, the company was only doing so with estimated emissions, not direct measurements. Without measured data, studies have shown that companies may misallocate capital to less impactful and less cost-effective mitigation opportunities.

Immediately before COP 28 ExxonMobil, announced that it was joining OGMP 2.0, the Oil & Gas Methane Partnership. This came as shocking and exciting news after last proxy season. The Sisters of St. Francis of Dubuque, along with co-filers Benedictine Sisters of Mount St. Scholastica, Congregation des Soeurs des Saints Noms de Jesus et de Marie, and Dana Investment Advisors filed a resolution at ExxonMobil asking the company to issue a report analyzing the reliability of its methane emission disclosures. While ExxonMobil’s opposition to the resolution highlighted their participation in OGCI, Global Methane Partnership, and legal hurdles, the resolution garnered an impressive 36% vote. 

This announcement of Exxon joining OGMP 2.0 is a huge step forward because under OGMP reporting, better-quality emissions data allows operators to accurately understand and characterize methane emissions from their assets, informing a more effective mitigation strategy. 

In addition to ExxonMobil and others joining OGMP in the past few weeks, the EPA released its new methane standards which should help reduce methane emissions. EDF reported on the new rules and how they will help OGMP members comply. There’s been other methane regulation advancements in the EU, China, Australia, and Canada as well. 

The COP agreement, Methane regulation, and hopefully new SEC climate disclosure rules in 2024, there is a lot of forward momentum in the climate world. What is needed now is continued corporate action and more climate policy nationally and internationally. 

SGI members are continuing engagement on climate crisis issues such as GHG emissions, methane, the Just Transition, science based targets and climate transition action plans, as well as climate lobbying. 

There’s still much more work to be done. Next year’s COP is planned to be held in Azerbaijan, one of the birthplaces of the oil industry.

50th Anniversary Panelists Announced

50th Anniversary Panelists Announced

Natalie Wasek

On September 12th, Seventh Generation Interfaith Coalition for Responsible Investment (SGI) will celebrate fifty years of service for people and planet. Founded in 1973 by pioneers in corporate shareholder engagement, Fr. Michael Crosby, O.F.M., Cap., Sr. Alphonsa Puls, S.S.S.F., and Sr. Charlita Foxhoven, S.S.S.F., SGI members have engaged multinational corporations to promote more sustainable and just practices for five decades.

The 50th Anniversary Celebration will take place at SGI’s annual conference on Tuesday, September 12th, from 4:30 p.m. to 7:30 p.m. at St. Francis Parish, located at 1937 N. Vel R. Phillips Avenue, Milwaukee, WI 53212. There will also be an option to attend virtually.

While recognizing the landmark achievements of the organization under Fr. Crosby and its co-founders, the conference will also focus forward, on how Milwaukee-based SGI is working to shape better outcomes at corporations in the 2020s and beyond.

The conference will include two panel conversations and a keynote from Tim Smith of the Interfaith Center on Corporate Responsibility (ICCR). The first panel will look back over SGI’s first fifty years and will be led by SGI members:

  • Dan Tretow, Director of Financial Services, School Sisters of St. Francis,
  • Barbara Jennings, CJS, Sisters of St. Joseph of Carondelet St. Louis,
  • Brigid Clingman, OP, Grand Rapid Dominicans,
  • Tim Dewane, Director of Shalom – Justice, Peace, & Integrity of Creation, School Sisters of Notre Dame Central Pacific Province

The second panel will discuss the evolution and future of responsible and sustainable investing. This panel will include:

In addition, Dan Tretow, the member representative for the School Sisters of St. Francis (S.S.S.F.), will receive the 2023 Fr. Mike Crosby Award. 

From SGI’s inception, Fr. Mike aided faith groups to ensure their investments reflect their beliefs and values, rather than inadvertently funding activities that conflict with those values. While smaller faith groups face particular obstacles given the complexity and challenges of investing, SGI has proven to be low cost and efficient as members implement faith-consistent investing with limited resources. SGI was the first coalition to join ICCR to enhance its shareholder advocacy for systemic change. 

SGI’s 50-year track record promoting environmental and social corporate responsibility and facilitating values-aligned investing spans many of the most urgent environmental and social issues facing people today, including climate change, economic inequality, racial justice, workplace diversity, political spending and lobbying disclosure, and executive compensation.

Please join us in celebrating 50 Years of SGI!

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Dan Tretow to receive SGI’s 2023 Fr. Mike Crosby Award

Dan Tretow to receive SGI’s 2023 Fr. Mike Crosby Award

Chris Cox

The Board of Seventh Generation Interfaith Coalition for Responsible Investment is pleased to announce that Dan Tretow, the member representative for the School Sisters of St. Francis (S.S.S.F.), has been selected to receive the 2023 Fr. Mike Crosby Award. The award will be presented in a reception at the SGI conference on September 12th. 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 are delighted to honor Dan Tretow,” said SGI Board Chair Cindy Bohlen.  “Dan was instrumental in helping SGI become a member-led organization. As SGI’s second board president, Dan’s leadership enabled SGI to build capacity and empower its members toward fulfilling its mission to build a more just and sustainable world for those most vulnerable by integrating social and environmental values into corporate and investor actions.”

“Dan took time out from his day job to be on our first Board of Directors and served as our Treasurer in 2015,” said Frank Sherman, previous executive director. “He stepped up again in 2018 to become our President at a critical time in SGI’s development. I came to rely on Dan for his experience and patience; but it is his deep faith and warm friendship that I appreciate the most. Brother Mike will be pleased to see that Dan won this award presented in his name. Congratulations, my friend!”

“It has been a pleasure and gift to work with Dan over my years with SGI. He is often among the first to recognize and lift up the good work done by others to support SGI, and he quietly supports the organization in a myriad of ways,” said SGI executive director Chris Cox. “Now, we get to return the favor as we recognize his deep contributions to SGI. We are grateful for Dan’s generosity and the 50-year legacy of the School Sisters of St. Francis with SGI.”

Dan has been the member representative for the School Sisters of St. Francis and worked with the Wisconsin Coalition and its successor organizations, now SGI, since the early 80’s.  His longest standing work in CRI involves the members working with a Wisconsin corporation on human rights, executive pay and supply chain sustainability.  Dan was a founding SGI board member and held the offices of Treasurer and President.  Amid questions about the future of SGI following Fr. Mike’s untimely death, Dan was instrumental in repositioning our coalition to the member-led organization that it is today.  Dan works for the School Sisters of St. Francis – Generalate as Director of Financial Services and St. Joseph Center Facility Director.

SGI was founded in 1973 by Fr. Michael Crosby, O.F.M., Cap., Sr. Alphonsa Puls, S.S.S.F., and Sr. Charlita Foxhoven, S.S.S.F., who were pioneers in corporate shareholder engagement.

Please join us in congratulating Dan.

Patent thickets and a thicket of lawsuits

Patent thickets and a thicket of lawsuits

sgicoalition

By Christina Dorett

Tomorrow, August 16th, marks the one year anniversary since the passing of the Inflation Reduction Act 2022 (IRA). The legislation provides authorization for Medicare to negotiate directly with drug manufacturers to bring down the price of ten high-cost prescription drugs for the benefit of seniors covered by Medicare.

Prescription drugs have assumed an increasingly important role in American health care, a trend likely to continue. One study estimates that “[p]rescription drug spending on retail and non-retail drugs is poised to grow 63% from 2020 to 2030, reaching $917 billion dollars” (p. 2).

Three in 10 Americans on a prescription drug, report not taking their medicine as prescribed due to cost. A poll asking respondents to identify their top priority issue appearing in the Build Back Better bill found that allowing the federal government to negotiate drug prices topped the list.

In the 2023 proxy season, a national coalition of long term, faith and values-based investors, who are members of the Interfaith Center on Corporate Responsibility (ICCR), filed resolutions with five major pharmaceutical companies, with a brand new ask: a report on the process that pharmaceutical companies use to determine whether to apply for a secondary or tertiary patent, intended to qualitatively verify if promoting access for patients, was a relevant factor in this process.

This resolution received 31.1% of investors’ support at the Merck AGM held on May 23rd 2023. The resolution secured 30% of the vote at Pfizer; 16.5% of the vote at Gilead, 14.42% at Johnson & Johnson. Just a few weeks later, on June 6th, 2023, Merck & Co. Inc. filed a lawsuit against the Department of Health & Human services (HHS) and Centers for Medicare and Medicaid Services (CMS), alleging “extortion” and a violation of their 1st and 4th amendment rights, in respect to the proposed negotiations of drug prices, on behalf of seniors covered under Medicare, as legislated under the Inflation Reduction Act 2022. Bristol Myers Squibb (BMY) followed with a similar lawsuit. Both companies are represented by the law firm, Jones Day. Lawsuits have been filed by Astellas and Johnson & Johnson in other jurisdictions. As well, the U.S. Chamber of Commerce and the trade association Pharmaceutical Research and Manufacturers of America (PhRMA) have filed suits with similar claims.

On-going legislative and regulatory concerns

The reality of high drug prices and the ills of the patent system have long been a topic of political debate. In April of this year, Senator Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.) wrote to the United States Patent and Trademark Office (USPTO) regarding their concerns about the pharmaceutical industry’s broad use of anti-competitive practices that raise costs for patients and families. Warren and Jayapal wrote to the patent office asking it to take similar action in December 2022 and June 2021.

“Patients continue to suffer as prescription drug manufacturers jack up prices and rake in billions in profits,” the letter said. “We have yet to see the USPTO take substantial steps to exercise its existing administrative authorities to help lower drug prices, encourage competition, and increase innovation.”

A Thicket of Lawsuits

The lawsuits that Merck and the others have opted to file serve to fuel the controversy and fail to address the underlying concerns for equitable business decisions that serve the public who need access to these life saving drugs. Pharmaceutical companies have had a long run of putting their profit above all else, and this unregulated behavior has not served the patient, the taxpayer, seniors or any member of the public who is uninsured, underinsured and/or has an insurance company disallow a claim to secure access to the prohibitively expensive drugs, even though these drugs may save an individual’s life. While innovation was intended to save lives, the profit motive instead has rendered access to life saving drugs a luxury for those who are rich enough to afford them.

Here are the hard truths:

  1. Pharmaceutical companies have benefitted from federal research and development tax credits, on the grounds that they require investment for innovation to develop life saving drugs. Over time and due to the adherence to free market economic theories, buttressed by failures to regulate the business conduct of these pharmaceutical companies, they have business standards and processes that serve their profit motive without due consideration of how patients can secure their access to gain the innovative benefits of these patented drugs.
  2. These same pharmaceutical companies have engaged in lobbying to keep their profits healthy and growing, while they continue to pocket the federal tax credits and “covet” the research of the National Institute of Health (NIH), all paid for by the very same taxpayers they now litigate and have been lobbying against over decades.
  3. The allegation that negotiating drug prices for ten drugs yet to be named, for the benefit of seniors covered under Medicare, is “extortion”, exposes the singular profit motive of the leaders and management teams of these pharmaceutical companies.
  4. Lawsuits are expensive and contentious and they run afoul of the values statement of every pharmaceutical company in respect to their mission of serving the needs of patients, with their innovative medicines and vaccines.
  5. The claims in the lawsuits are explosive and tactically crafted in response to the politics of the day and accusations of profiteering and gaming the patent system levied by both the Republicans and Democrats in oversight committee hearings.
  6. The legal claim seeking an injunction is frivolous, premature and may be an abuse of the legal system, since no loss or damage has been sustained by Merck or BMY, nor is there any continuing loss and/or damage being sustained by these companies or any other party to the litigation, which is the only basis for a claim for an injunction.
  7. The claim that the IRA requirement to negotiate drug prices is a violation of Merck’s and BMY’s 1st and 4th amendment rights, adds insult to injury, since these lucrative and highly profitable pharmaceutical corporations have unfettered rights to unilaterally fix drug prices and to extend their patent exclusive periods, unfairly preserving their monopoly.

Given the news coverage exposing the reality of patent thickets and how the pharmaceutical companies are gaming the patent system, the lawsuit filed by Merck and BMY is tone deaf to public sentiment and dismissive of public wellbeing, and, as investors, we urge pharmaceutical companies to refrain from filing lawsuits that do not address the public right to healthcare, that do not address the underlying concerns over the unaffordable prices of life saving drugs and that do not align with their own Mission and Values statements to serve the benefit, interest, wellbeing and life of the patient.