Tag: Human rights

Too Many Companies Remain Complicit in Russia’s War

Too Many Companies Remain Complicit in Russia’s War

Chris Cox

One year ago today, Russia launched an invasion of Ukraine. Appropriately, today’s headlines report the devastating consequences in lives lost and displaced persons. There have been somewhere around 300,000 military and civilian deaths, and the conflict has generated an additional 8,087,952 Ukrainian refugees living abroad and millions more displaced within the country. The Ukrainian government database of crimes of aggression and war crimes committed by the Russian military ended the week at 71,321, according to this tweet. The gruesome tally underscores both the severe and systemic nature of Russia’s violations of international law and the severe risks for companies that have operations and relationships in the country.

The war’s devastating impact affects many more countries. As Ukraine is a breadbasket for grains, the war has undermined global food security. The war spiked global energy costs, exacerbating an existing energy crisis.

At the same time, the hostilities prompted new strategies for coordinating and targeting international sanctions that have been swift and significant. Even today, the U.S. and allies introduced new sanctions. As well, on this anniversary, Russia became the first country ever to be expelled from Financial Action Task Force, an intergovernmental body that sets anti-money-laundering law standards

An element that needs more attention is the ongoing collaboration by global companies with the Russian aggressors. Their denials aside, those companies still operating in Russia are materially involved in the Russian war effort as they comply with the terms of Russia’s mobilization law. This article from B4Ukraine offers additional data points and analysis, and it draws a firm conclusion:

“Threats to profits and portfolios, but most importantly to the Ukrainian people, lead to one inevitable conclusion for businesses – to end all operations and business relationships with the Russian government or risk being complicit in its crimes.”

In light of the severe risks endemic to conflict, the UN Business and Human Rights Working Group developed a tool for that due diligence, published last June: Heightened Due Diligence for Business in Conflict-Affected Contexts: A Guide. As mandatory due diligence legislation continues its advance in the European Union, alongside a growing body of international jurisprudence, investors can no longer ignore geopolitical risks associated with autocracy, military aggression, and corruption.

The war confirms that investors need to improve human rights due diligence processes. Given Russia’s human rights history over recent decades, some investors preempted this foreseeable issue. Other investors belatedly found that companies had undue exposure to Russia. At the outset of the war, SGI called for companies to conduct heightened due diligence to ensure that their activities do not support the Russian war effort.  As well, SGI joined a coalition of investors who quickly condemned the act of aggression and called on companies to undertake heightened human rights due diligence. That coalition letter, and other efforts where SGI has participated, have received critical support from our colleagues at the Heartland Initiative. With their support, SGI has joined letters and dialogues with technology and finance firms about risks associated with their operations in Russia.

Sadly, those calls have gone unheeded in many quarters. New data shows that companies’ responses fall far short of what is required under international frameworks, like the UN Guiding Principles on Business and Human Rights. A new report, Unfinished Business, based on data from the Kyiv School of Economics examining 3,078 multinationals found that 56% (1,717 companies) which had ties to Russia at the start of the war continue to do business with the country. The data also showed that: 

“Of the companies that had a local Russian subsidiary at the start of the full-scale invasion of Ukraine, only one in ten has completed the liquidation or sale of its Russian business. 

“The remaining companies paid at least $18 billion in taxes to Russia in 2021 — enough to fund Russia’s war against Ukraine for two months.” 

(Credit: B4Ukraine)

Our keynoter from last fall’s conference, Bennett Freeman wrote about these concerns in a recent article for the Business and Human Rights Resource Centre. He concludes with an observation and a question:

“This tragic anniversary challenges the remaining foreign companies still operating in Russia to leave. At the same time, will a new geopolitical corporate responsibility take shape – and take action – in time to help fortify the battered remnants of the international rules-based order?”

A year ago, CEOs of global companies offered statements against the war. On this sad anniversary, we want to call companies to prioritize actions over words. Companies like Procter & Gamble, Mondelez, Nestle, Baker Hughes, Schlumberger, and Johnson & Johnson would do well to heed the words of Benjamin Franklin: “He that lieth down with dogs shall rise up with fleas.”

SGI’s 2022 Conference: Corporate Human Rights Due Diligence in Conflict-Affected and High-Risk Areas

SGI’s 2022 Conference: Corporate Human Rights Due Diligence in Conflict-Affected and High-Risk Areas

Chris Cox

Good stewardship requires posing and answering difficult questions, especially concerning business activities in conflict-affected and high-risk areas where the risks are highest to people, the planet, and portfolios. The World Bank estimates that two-thirds of the world’s poor will live in such areas by 2030. Russia’s invasion of Ukraine, the military coup in Myanmar, and forced labor in XUAR, China make this an urgent and compelling topic now. It is up to investors and companies to respond to these risks with systemic solutions, putting conflict-sensitive policies and practices into place.

SGI’s 2022 Conference: Corporate Human Rights Due Diligence in Conflict-Affected and High-Risk Areas will take place on October 11th at 4:30PM CT. We are delighted to announce that our keynoter will be Bennett Freeman, Associate Fellow in the International Law at Chatham House.

Following our keynote, our associate director, Chris Cox, will moderate a panel with leading experts:

In the conference, we hope to explore these questions:

  • Do socially responsible investors need to respond to human rights issues in their portfolio? Can they just write a screen?
  • What human rights issues should a responsible investor respond to and how?
  • How would a responsible investor ask one of their money managers to do this?
  • What is heightened human rights due diligence for investors and companies? How does an investor or a company go about doing it?
  • How do investors and companies assess human rights and geopolitical risks of emerging markets, informed by the UN Guiding Principles on Business and Human Rights (UNGPs)?
  • How can investors and companies respond to state-sponsored actions that undermine the rules-based order necessary to safeguard the international community and the global economy?
  • With 500 companies withdrawing operations from Russia, has a new standard been set for corporate responsibility and a stakeholder economy?

Conducting heightened due diligence helps companies and investors to identify and mitigate human rights risks, while simultaneously addressing the potential material risks – legal, operational, and financial – associated with areas impacted by conflict. Join us for a conversation on the difficult questions investors must ask of their portfolio companies and themselves when seeking to be rights-respecting stewards in an increasingly conflicted world.

Individual tickets for in-person attendance are $75 per person, and individual tickets for virtual participations are available at $50 per person. You can purchase individual tickets for the Conference here. The conference will be hosted at Fox Point Lutheran Church, located at 7510 N Santa Monica Blvd. in Fox Point, WI, 53217.

More information about the Conference can be found here.

The Necessity to Perform Investor Human Rights Due Diligence

The Necessity to Perform Investor Human Rights Due Diligence

Chris Cox

In this difficult time, we continue to follow the crisis in Ukraine from afar. The war itself and its humanitarian and economic fallout pose some tough questions. Good stewardship may come down to posing and answering difficult questions.

For at least two decades, we ignored Russia’s globalized corruption and localized aggression. Ignored may be too soft– some even welcomed it. On March 4, 2018, Putin’s agents poisoned former Russian spy Sergei Skripal, then residing in the United Kingdom. Investors and global companies were willing to look the other way. Again, investors and global companies willfully ignored the attempted assassination of opposition leader Alexei Navalny in August of 2020. In fact, Germany, China, and the US topped the list of major investors in the Russian economy that year. On-going investments allowed Putin to entrench power, and, now, he is an unopposed dictator and global security threat.

The commencement of the Russian war in Ukraine has led to a corporate withdrawal from Russia that happened faster than anyone could have imagined. In less than four weeks, from American Express to YouTube, 380 global companies announced some kind of withdrawal from Russia, based on data compiled by the Yale School of Management. At the same time, Yale tracks 39 companies that will remain in Russia or have refused to disclose plans regarding their operations. [The Yale list does not include Koch Industries or its subsidiaries that, according to Judd Legum, also are continuing their operations in Russia.]

The motivations for abandoning business in Russia could be described in a handful of categories. Some companies have left on principle. Some have left as a consequence of sanctions. Others may have left for fear of boycotts and backlash. Still others didn’t want to be labeled as being on “the wrong side of history.” Some have only halted operations for now.

There was, obviously, another, earlier course of action: those who, based on human rights due diligence, found that investment in Russia was a risk that they would not undertake. Due to internal assessments of human rights and political governance risks, informed by the UN Guiding Principles on Business and Human Rights (UNGPs), those asset owners already had limited exposure to Russia. Since there has been an international armed conflict, internal armed conflict, and military occupation in Ukraine since 2014, enhanced human rights due diligence was required under the UNGPs. Change can be planned and gradual, or attempted in the heat of a crisis, but most would recommend the planned and gradual route.

Investors, like all business actors, are expected to respect human rights as outlined by UNGPs. Investor responsibility is increasingly embedded into legal frameworks (e.g. EU rules requiring investors to disclose steps taken to address the adverse impact of their investment decisions on people and the planet). ICCR’s Investor Alliance for Human Rights has developed a toolkit to help asset owners and managers address risks to people posed by their investments.

We should review the whole of our investments and use the IAHR toolkit and other resources to do so. Asset owners that expand investments in Saudi Arabia are willfully ignoring flashing warning lights about human rights risks. If Jamal Khashoggi’s brutal murder in 2018 did not persuade an asset owner or an asset manager, this weekend’s mass execution of 81 prisoners is not likely to be a deterrent either. Or consider Myanmar. Since the February 1, 2021 coup, gas revenues are the largest funding source for the Burmese armed forces. Foreign gas companies work hand-in-hand with Myanma Oil and Gas Enterprise (MOGE), which is under control of the Myanmar military. The same can be said for investments in the Xinjiang Uygur Autonomous Region (XUAR) of China and a host of other countries.

While the U.S. and international community have reacted with great speed and resolve to punish Russia’s most recent invasion of Ukraine, it is troubling that we have yet to levy a similar sanctions regime on the Chinese government for its genocide in Xinjiang.

The examples of Ukraine, Saudi Arabia, Myanmar, and XUAR China highlight the increasing severity and number of conflict-affected and high-risk areas across the globe. It is up to investors and companies to respond to these systemic risks with systemic solutions, putting conflict-sensitive policies and practices into place.

Our colleagues at Heartland Initiative developed the “Rights Respecting Investment in CAHRA methodology” as one resource to assist investors.

Rich Stazinski, executive director at Heartland put it this way: “Companies and investors have had nearly a decade since the Russian invasion of Crimea to grapple with the ongoing consequences of conflict and risk in Ukraine. While abiding by evolving rounds of economic sanctions and export controls is necessary to make companies and investors legally compliant, it is far from sufficient to fulfill their responsibilities under the UN Guiding Principles. In order to do so, they must adopt robust policy and practices that address the heightened risks of doing business in conflict-affected and high-risk areas, from Ukraine to Myanmar to Xinjiang.”

Asset owners need to ask difficult or controversial questions. The very issues facing our portfolios and, indeed, our planet are too important not to.

John Ruggie, human rights icon, dies at 76

John Ruggie, human rights icon, dies at 76

Chris Cox

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:

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. 

Webinar: Human Rights Due Diligence

Webinar: Human Rights Due Diligence

Chris Cox
On Friday, April 17th, SGI’s quarterly webinar addressed due diligence in human rights required of companies. The traditional audit and codes of conduct, while necessary, are no longer sufficient. We were fortunate that ICCR’s Anita Dorett, Camille Le Pors, the lead for the Corporate Human Rights Benchmark, and Patricia Jurewicz of the Responsible Sourcing Network, joined us for this webinar. Again, we are very grateful for the presence of Anita, Camille, and Patricia  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.
Don’t miss these two webinars!

Don’t miss these two webinars!

Chris Cox

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!

The Ag Sector: The Nexus of Migration and Human Trafficking

The Ag Sector: The Nexus of Migration and Human Trafficking

Chris Cox

Agricultural workers are some of the most vulnerable workers on the planet. In the U.S., we carve out laws that treat agricultural workers differently from all other U.S. workers. Further, it is a sector populated largely with foreign-born workers. All too often, these circumstances generate situations of horrific human exploitation.

On Friday, February 14, we were joined in our quarterly webinar by a leader in efforts to uncover human trafficking and modern slavery: Laura Germino of the Coalition of Immokalee Workers (CIW). Laura, a founding member of CIW, helped to establish the CIW’s Anti-Slavery Campaign. In 2010, she was honored by the U.S. State Department as a TIP (Trafficking in Persons) Hero. In 2015, the anti-slavery campaign received the Presidential Award for Extraordinary Efforts in Combating Modern Day Slavery. CIW has pioneered a worker-based social responsibility model, the Fair Food Program, to include workers in addressing exploitation and abuse and to eradicate modern slavery in Florida’s tomato fields. We also discussed how these lessons can be applied to our corporate engagements.

We highly recommend sharing this video with your investment committee and other essential people involved in your investment strategy.

We are very grateful for Laura’s presence in this webinar, for her long-standing commitment to eradicate modern slavery in the ag sector, and her generosity in sharing her wisdom and experience with us.

As always, we welcome your feedback via a confidential evaluation found here. Slides are available here. 

Raise the Alarm for Xinjiang

Raise the Alarm for Xinjiang

Chris Cox

Over the last few years, casual readers of newspapers likely had vague awareness that China had imprisoned more than a million ethnic Uighur Muslims and other minorities in camps in the country’s far-west Xinjiang province. While the Chinese government claims that the prisoners are volunteers who receive job training, human rights organizations allege that the ethnic minorities endure mass incarceration in “re-education camps” designed to indoctrinate those ethnic minorities.

In the last six months, a barrage of new events and evidence clarified the situation with striking details. In June, the Worker Rights Consortium (WRC) published a detailed, 34-page report on a factory owned by the Hetian Taida Apparel Company that supplied university logo clothing to Badger Sportswear. The WRC found:

. . . the investigation Badger commissioned of Hetian Taida, in response to allegations of forced labor, was fatally compromised by the company’s rush to exonerate itself and its supplier; the company announced findings, supposedly based on worker interviews, before [emphasis added] interviewing any workers. [p. 2]

The U.S. State Department placed China on Tier Three (the lowest category) in its annual Trafficking in Persons Report, dedicating considerable attention to Xinjiang. In early October, Time magazine reported that the U.S. Blocks Imports From 5 Countries Over Allegations of Forced Labor, when U.S. Customs and Border Protection (CBP) intervened on a Costco shipment from Hetian Taida. Days later, the WRC issued an Update on Forced Labor and Hetian Taida Apparel. Badger Sportswear only cut ties after CBP intervened on the shipment for Costco.  The American Apparel and Footwear Association, a trade group for brands and retailers, issued a disappointing and underwhelming statement in response to this report that they were “deeply concerned” and called on the Chinese government to act. Also, Georgetown University’s Center for Strategic and International Studies issued a critical report entitled Connecting the Dots in Xinjiang: Forced Labor, Forced Assimilation, and Western Supply Chains offering specific guidance for companies and investors. A rare event these days, a bipartisan letter came from members of both the U.S. House and Senate calling on the CBP to investigate and block goods coming from the Xinjiang province.  

Last week, classified documents from the Chinese government were leaked by the International Consortium of Investigative Journalists, providing policies and procedures inside the re-education camps.   The camps reportedly have watch towers, double-locked doors, and video surveillance “to prevent escapes.” The Chinese government apparently uses the camps to train its artificial intelligence programs for use in mass surveillance. The documents demonstrate that forced labor is an integral part of the Chinese government’s strategy for ideological conversion through industrialization. This is the largest incarceration of people based on an ethnic or religious identity since 1945.

A Toxic Combination for Apparel Companies and Consumers

China is the source of about 40% of all clothing sold in the U.S. The Xinjiang province grows 80% of China’s cotton, and, increasingly, the cotton is ginned there. Companies are erecting new factories in Xinjiang for additional steps in the garment-making process. Further, fabric from China is exported to Bangladesh, Cambodia, and Vietnam—all significant sources of apparel sold in the U.S

Corporations have a responsibility to respect human rights within company-owned operations and through business relationships. This obligation is delineated in the United Nations Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. Every brand and retailer that sources from China is exposed to the risks for forced labor in their supply chains: the harvesting and ginning of cotton, the spinning of the yarn, and the business relationships with corporations collaborating with the Chinese government to build and staff these new factories. The issue is not “simply” a violation of a retailer’s code of conduct or a reputational risk; companies risk a violation of U.S. law concerning importation of garments made with forced labor.

As public scrutiny of these issues increases, it will become increasingly clear that companies’ due diligence mechanisms (audits and codes of conduct) are insufficient. We at SGI would argue that, even in the best of circumstances, audits and codes of conduct, while necessary, are insufficient to protect human rights. In the circumstance of the Xinjiang province, such efforts are rendered ineffective.

We urge companies to take this risk seriously. It is not enough to lay low and wait; companies must engage proactively. We also urge the U.S. government to take meaningful action against the Chinese government in this matter. Even our faith communities have a responsibility to act. Events in support of “religious freedom” ring hollow if it does not also include action to respect the religious freedom of ethnic minorities in Xinjiang. Finally, as consumers, we are called to solidarity with those who endure forced labor. NPR’s Scott Simon put it well: “What does it have to do with us? Look down at our shoes, our phones and our toys.”

To learn more:

The long and winding road

The long and winding road

Chris Cox

by Pat Zerega

Senior Director Shareholder Advocacy, Mercy Investment Services

This weekend, we saw Rocketman, the story of Elton John. It brought back memories of so many songs we grew up with.  For some reason I kept thinking of the song the long and winding road as a parallel to the story (even though it was written by the Beatles, Elton John performed it on occasion). Part of the reason it came to mind is that the song reflects how I feel about the private prison work and GEO specifically. It might be helpful to review some of the history that got us to today.

Around 2003, John Celichowski, O.F.M., Cap. and Valerie Heinonen, O.S.U., began approaching the private prison companies. At that point, their stock was considered ‘penny stock’ with few members at ICCR owning GEO, CCA or Cornell. The first resolution oat GEO received 3.2% and a similar resolution brought CCA to the table without going to vote. Fr. John moved on to leadership in the community and passed the mantle to Fr. Mike Crosby.  A variety of approaches including lobbying and human rights policy development continued with GEO and CoreCivic (formerly Corrections Corporation of America) through 2011. Dialogues were often contentious (my participation was through the Lutherans), and at one point the CEO of GEO wondered why we didn’t just “sell the stock and leave them alone.” We continued to focus concern with the people in custody.

In 2011, a resolution calling for a human rights policy was filed. At the same time, the Jesuit Social Research Center had obtained a grant to work with private prisons around human rights and training, so the Jesuits began to lead both dialogues. This grant brought in prison experts to help lead the way and both companies developed polices and entered into dialogue.  

We all know writing a policy is not the be all and end all of work. We need to see that the policy doesn’t sit on the shelf but is implemented, training occurring and the culture changing. Shareholders expected to be able to find that out through dialogue and increased transparency in reporting on the prison companies’ websites.

Since that time, the dialogues have focused on several issues including medical care and segregation from the general population, but shareholders felt like we were not seeing the real impact hoped for with a human rights policy. Abuse allegations remained high, and news coverage of these events continued. In the spring of 2018, we began to see many reports concerning immigration detention conditions in private prisons. ICCR hosted letters to both private prison companies with more 50 signatures asking for the prisons not to become involved with government detention contracts.

CoreCivic answered the letter and continued to engage in a meaningful way, this spring presented its first ESG report. They are working on other ways to be transparent on human rights issues.

In the late summer of 2018, GEO, however, put a ‘pause’ on dialogue. This was new to me. I’ve had companies stall or not answer letters, but to actually write and say they didn’t want to talk was new ground.

Our group was frustrated and decided to file a resolution in the fall of 2018 asking for a report (that was indicated in GEO’s own policy) concerning how implementation of the human rights policy. Many shareholders joined the group of Jesuits and Mercy Investment Services addressing this issue, and in November the resolution was filed.

As expected, the resolution was challenged, but the SEC denied the no action thus, agreeing it had to be on the ballot. Shareholders filed a proxy memo indicating reasons why it should be left on, alerted proxy advisors of the resolution, and the week before the AGM learned that both proxy advisory firms were supporting the resolution. As that information became public, we also received an unexpected email from GEO, telling us they would no longer oppose the resolution and filed such a statement with the SEC. The company never quite supported the resolution, nor changed the proxy on their site, nor put the SEC statement on their site, nor did they reach out to talk with us. So, we prepared to present at the AGM (a virtual-only AGM, but that too is for another day), and garnered nearly 88% of the vote.

(Photo by Pat Zerega, Door County Wisconsin 2016)

The story of course does not end there. Shareholders have met since then to discuss next steps and have sent a letter requesting to return to the dialogue table with all interested parties and explain what we are looking for in the requested human rights report. Thus far, there is no answer to that request, but we know there is always another twist in the road ahead.