2019 Shareholder Advocacy Review
Natural Investments is involved in a range of efforts with our industry colleagues that facilitate positive economic, social and environmental change, including shareholder engagement with companies and public policy advocacy. Natural Investments regularly engages in corporate and political advocacy to protect ecosystems, defend human rights, and advance racial and economic justice. In 2019, we participated in more than 30 environmental, social, and governance activities on behalf of investors on issues ranging from gun violence and shareholder rights to climate change and reproductive rights.
Our work to engage companies in reducing gun violence continued through 2019. We urged US Bank, Bank of America, Wells Fargo, JP Morgan, Capitol One, Citi, Mastercard, American Express, VISA, and nine others to curb direct lending to gun manufacturers and indirect support for gun buyers via credit card transactions. The financial institutions we targeted responded that gun violence is a matter of regulatory or legislative authority, not company policy, as they do not consider this issue a material risk to their industry.
We signed several letters to Congressional leaders in support of their sponsorship of Green New Deal legislation.
We endorsed the Carbon Disclosure Project’s appeal to dozens of companies to disclose the impacts of company operations on the forests, air, and waterways of the world.
We supported a letter to Congressional leaders in support of the Climate Risk Disclosure Act of 2019 which would enable investors to assess the climate risk for companies unwilling to disclose this information publicly. Under current Senate leadership, the bill is stalled.
We supported a letter to dozens of companies, particularly the largest banks that loan to fossil-fuel companies, to address the urgent need for a climate plan and to address how their government lobbying activities undermine the goals of the Paris Climate Agreement; we also shared investor expectations regarding such behavior and the potential corporate risks it exposes. We requested that these companies align their own interests and lobbying activities with the industry associations to which they belong and encourage such associations to adopt positions that acknowledge the materiality of climate change risk.
We signed onto As You Sow’s letter to the governments of developed nations, along with 500 institutional investors representing $34 trillion in assets, demanding compliance with the Paris Agreement’s climate change financial reporting standards and the private sector
collaboration required to reduce atmospheric carbon.
We signed onto a letter to natural gas producers and utilities requesting that they pressure the EPA not to roll back previously established standards regulating oil and gas methane emissions. Methane capture is critical to address climate change and represents a possible secondary revenue stream, so it must be properly regulated.
As a signatory to the Global Investor Engagement on Meat Sourcing, we signed onto letters orchestrated by Ceres and the FAIRR Initiative to McDonald’s, Chipotle, Yum! Brands, Domino’s, Wendy’s, and RBI (the owner of Burger King, Popeye’s, and Tim
Horton’s) asking the companies to better manage water and environmental risk within their meat and dairy supply chains, given their impact on greenhouse gas emissions and climate change.
We signed onto an As You Sow letter to General Mills regarding its purchase of grains from farmers that use glyphosate before harvest on crops. Although engagement with the company was at first unsuccessful, the company agreed to reduce pesticides in its supply chain after a proxy vote on the matter garnered over 30% support.
In conjunction with an investment coalition facilitated by Reproductive Health Investors, we signed a letter to more than 30 companies urging them to provide comprehensive reproductive health care for women and family-friendly workplace benefits; disclose political contributions toward political candidates and PACs that advocate limits on women’s reproductive rights; and end the practice of forced arbitration for employee sexual harassment claims
(which creates a shroud of mystery that leaves investors and the public in the dark about how such claims are handled and what steps are being taking to reduce such risks). Several companies, such as Coca-Cola, FedEx, and CVS, have been willing to engage in dialogue on these topics.
We supported a campaign by the Investor Alliance for Human Rights to urge the financial institutions that have signed the Equator Principles to uphold strong human rights workplace and community
standards. The principles address the protection of vulnerable people; human rights grievances; and the health, water, food, housing, land, and resource impacts of the climate crisis. They also uphold the needs of relevant stakeholders, particularly the prior consent rights of indigenous peoples.
Through our participation in the Bangladesh Investor Initiative of the Interfaith Center on Corporate Responsibility, we wrote a joint letter to the Bangladeshi government to request that the country not abandon the 1,600-company-strong Accord on Fire and Building Safety. The accord is in jeopardy of ending just six years after it was established––before the formalization of a significant facilities
inspection program to protect workers from unsafe working conditions. The result of these efforts was the establishment of a sustainability council with representatives from manufacturers, brands, and trade unions to enforce a transparent factory inspection process that guarantees workplace safety.
Through our co-sponsorship of the Shareholder Rights Group, a coalition of leading SRI firms, we submitted a letter to the SEC during its public comment period on its proposed rule changes on how investors can submit shareholder proposals––and why proxy
advisor firms hired by investors, advisors, and money managers are suitably representing investors and not their own interests. The SEC has received thousands of such comments critical of the SEC’s proposed rules, which severely curtail the rights of average investors to advocate against risky corporate practices that can affect share value. Many comments requested that the SEC conduct an economic analysis of the proposed rule, as required by statute.
We signed a letter from dozens of investment firms in support of the new Global Reporting Initiative (GRI) topic-specific standard, “Tax and Payments to Governments,” which would increase transparency in tax reporting by multinational corporations and evaluate the penalties, risks, and economic impacts associated with retaining profits in “shell” countries to avoid domestic taxes.
Similarly, we endorsed a letter to the Financial Accounting Standards Board rejecting its proposal to disaggregate income and tax information into two sum totals—foreign and domestic—a practice that prevents investors from understanding how companies
operate and pay taxes in each country of operations. Such information is critical to the management of corporate risk that may affect share value.