IMAGE: CNS photo/Andrew Gombert, EPA
By Dennis Sadowski
WASHINGTON
(CNS) — If it’s spring, it must be corporate annual general meeting season.
For investors
concerned about corporate accountability and transparency, it’s one of the
busiest times of the year.
The
annual general meetings give shareholders the chance to publicly engage corporate
leadership on hot-button issues such as human rights, climate change, sustainability,
lobbying expenditures and human trafficking.
Faith-based
investors — many of which are members of the Interfaith Center on Corporate
Responsibility — have led shareholder advocacy campaigns for more than four
decades. Over the years, they have leveraged their financial clout as stockholders
to air grievances about corporate activities and to pursue responsible
corporate action.
“There’s
a unique role for faith-based investors in pushing the world’s biggest
companies to acting as responsible and accountable corporate citizens,”
said Josh Zinner, ICCR’s new
CEO. “Primarily this is about using the role of investor to push
companies not to do the right thing purely for moral reasons … but to do the
right thing for shareholders as well.”
Such
engagement affects small investors as well through the pension funds and mutual
funds in which their contributions are invested. Capuchin Father
Michael H. Crosby, executive director of the Wisconsin/Iowa/Minnesota
Coalition for Responsible Investment, an ICCR member, said each investor,
whether small or large, should have a say in any company in which they hold
shares.
“It’s
their responsibility because stocks give you ownership,” Father Crosby
told Catholic News Service. “Ownership makes you responsible for the acts
(of a company) like any other ownership makes you responsible under law.”
He
suggested that shareholders, when they receive a proxy statement in the mail,
examine it carefully and send in their vote.
Not all
of the organizations ICCR collaborates with are faith-based institutions. Among ICCR partners sponsoring
resolutions are the California State Teachers’ Retirement System, Calvert Investments and the United Steelworkers.
One
ICCR member, Northwest
Coalition for Responsible Investment in Seattle, has used the leverage
of its 15 members to press major companies on numerous interests throughout its
22-year history.
“We
feel if we own the companies, we need to be responsible shareholders, which
means they’re using our money for what they’re doing,” said Dominican Sister Judy Byron,
the coalition’s coordinator. “I learned in owning these companies
we have a responsibility for what they’re doing and to call them to be responsible.”
The
coalition is supporting one of its member institutions, the Northwest Women Religious
Investment Trust, which this year has filed proxy resolutions with ExxonMobil on climate change,
Phillips 66 on greenhouse
gas emissions, Chevron on hydraulic fracturing and Google/Alphabet on human rights risk
assessment.
Such shareholder
activism comes down to integrating personal values with the investment world, the
Rev. David Schilling, a senior
program director at ICCR, told Catholic News Service. “What’s at
stake here is the lives of human beings. Publicly traded companies are given charters
by the public to work for the common good, but it doesn’t always work out that
way,” he said.
ICCR is
tracking 257
resolutions filed by its members with 174 companies this annual meeting season. Included are 91 resolutions addressing
climate change, which were filed on the heels of the historic COP21 agreement
reached in Paris in December. Overall, the number of resolutions filed by ICCR
members has increased by 60 percent since 2011.
A proxy
can be voted on during a company’s annual general meeting. Investors filing
resolutions say success is not dictated by their proposal being adopted, but by
how much it moves corporate executives to act. Under Securities and Exchange
Commission rules, a proxy resolution can be reintroduced if it achieves at
least 3 percent of shareholder votes the first year, 6 percent its second year
and 10 percent its third year and beyond.
“One
of the real significant learnings from my involvement over the years is that
persistence and perseverance pays off,” said Oblate Father Seamus Finn, of the order’s Washington-based
Justice, Peace and Integrity of Creation Office and ICCR chairman.
“You
(first) bring up an issue and they’re likely to say, ‘We’ve never thought of
that’ or might say, ‘We’re not sure how that affects our business.’ But you come
back a year later, they’re going to listen. You come back a third or fourth year
and you end up with changes,” Father Finn said.
Shareholder
resolutions are part of the larger socially responsible investment strategy of Catholic Health Initiatives, an
ICCR member in Englewood,
Colorado. Colleen Scanlon,
senior vice president for advocacy, said the nonprofit health system also directs funds to local
businesses to keep the region’s economy strong.
Much of
Catholic Health Initiatives’ socially responsible investment effort has involved pharmaceutical firms over
the rising cost of prescription drugs and the impact on vulnerable people
including the elderly. Scanlon said the health system had seen some success through meetings
with pharmaceutical representatives, but has resorted to filing more shareholder
resolutions to bring more attention to what it sees as a growing problem.
Elsewhere,
Mary Baudouin, assistant for
social ministries for the Jesuits of the Central and Southern Province based
in New Orleans, told CNS that resolutions filed in recent years with the global
agribusiness giant Bunge led to a series of meetings that resulted in the
company altering its water-use practices to the betterment of local communities
in developing countries.
That engagement
with Jesuit partners resulted in company officials signing in June the CEO Water Mandate, a
public-private initiative of the United Nations to assist companies in the
development, implementation and disclosure of water sustainability policies and
practices. The company also established a Sustainability and Corporate
Responsibility Committee led by Carol Browner, former administrator of the U.S.
Environmental Protection Agency.
“Our
preference is to enter into dialogue with those companies,” Baudouin said.
“It’s a really long process. Once we file the resolution it’s just the tip
of the iceberg. It gets us in the door to have these constructive dialogues
that can last a long time.”
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Editor’s
Note: More information on socially responsible investing is available from the
Interfaith Center on Corporate Responsibility at www.iccr.org.
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Follow Sadowski on Twitter: @DennisSadowski.
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