CLEVELAND — The events of the past 12 months are shaping shareholder advocacy and action as the corporate annual meeting season nears.
Concerns about racial inequality that led to hundreds of demonstrations nationwide and the global coronavirus pandemic have led shareholders to submit dozens of resolutions for consideration in the upcoming meetings.
“This moment requires a national reckoning on racial justice,” said Mary Beth Gallagher, executive director of Montclair, New Jersey-based Investor Advocates for Social Justice, whose membership includes more than 30 Catholic entities.
With the police-involved deaths of Black people last year, socially responsible investor organizations such as IASJ also have looked more carefully at how their investment practices are impacting people of color and low-income communities.
“There is a lot more commitment to deepen the racial equity lungs in our work,” Gallagher told Catholic News Service.
Investors in the Racial Justice Investing Coalition, including the Interfaith Center on Corporate Responsibility, to which IASJ belongs, in June released a “Statement of Solidarity” in which they pledged accountability and action to dismantle systemic racism and promote racial equity and justice.
Formed in December 2017, the coalition has used its economic leverage to advance racial justice issues within corporations.
A tally by ICCR reveals that through Feb. 25, 64 resolutions relating specifically to diversity and racial justice have been filed in advance of spring corporate annual meetings. The number represents more than a quarter of the 244 resolutions filed overall at 152 companies.
The resolutions seek to address company diversity and inclusion, disclosure on plans and policies to achieve racial equality, diversity in executive leadership and board of director membership, and the gender pay gap.
Other topics addressed in filed resolutions are climate change (54), human rights (37), lobbying and political contributions (25), corporate governance (23), environmental and water concerns (19), health (13) and food production and safety (nine).
Concerns about racial equity cross over into the effects of the pandemic on people of color as well, Gallagher said.
Statistics from the Centers for Disease Control and Prevention and other public health entities consistently have shown that Black and Latino people have died of COVID-19 at a higher rate than people of other races.
“I think there’s a real recognition of the harm that COVID-19 has caused on communities of color,” Gallagher said. “A racial justice uprising demands reflection, action and advocacy, and as investors we want to examine our role in the companies we are invested in and call them to look at their impacts so communities of color are not disproportionately affected by business practice.”
A resolution filed by the Sisters of St. Francis of Philadelphia with California-based Chevron, one of the country’s largest oil and natural gas producers, provides an example of the issues related to racial justice that cross over into other concerns.
Sister Nora Nash, director of corporate responsibility for the religious order, said the resolution asks the company to commission an independent third-party report that analyzes how Chevron’s policies, practices and the impacts of its business “perpetuate racial injustice and inflict harm on communities of color in the United States.”
She cited the company’s refinery operations in the San Francisco Bay Area city of Richmond, California, as having both environmental justice and racial justice ramifications. Blacks and Latinos make up 65 percent of the city’s 103,000 residents. Adjacent to the refinery, the percentage is higher — 80 percent — and people of color experience higher rates of cardiovascular disease, cancer and asthma, according to the filing.
The religious order is concerned about the effects of long-term exposure of toxic chemicals and pollution on the residents, said Nash, who has worked with the company since 2009 on the development and implementation of its human rights policy.
While Nash credited Chevron officials for doing a “very, very good job” in drafting the policy, she said more needs to be done to follow it.
“We think it’s important to keep calling them to greater responsibility even though they’re telling us they’re doing everything in their code of conduct. I tell them it’s really good to have it on paper, but that’s not enough,” she said.
Sean Comey, a spokesman for Chevron, said in an email the company engages with all shareholders who offer proposals “in a constructive manner to gain a better understanding of their concerns and to share our perspective on the issues.”
The company’s response to the resolution will be included in the proxy statement being prepared for the annual meeting and will be filed April 8, Comey said.
In Richmond, he added, Chevron has reduced emissions into the air by more than 85% since the late 1970s, “and we continue to work on further lowering our emissions.”
Equal access to the coronavirus vaccines is a concern as well. Of 13 health-related resolutions, six specifically call for companies to ensure access to COVID-19 products in poor countries.
ICCR reported that 44 resolutions overall address the illness’s long-term effects both directly and indirectly. Specifically, the six resolutions were filed seeking to prohibit price gouging for vaccines. The others indirectly mention the pandemic in calling for reforms in corporate governance, lobbying and inclusiveness in management and hiring.
Christopher Cox, associated director of Seventh Generation Coalition for Responsible Investment in Milwaukee, told CNS that investor members are concerned about equal access and the prices of the various coronavirus vaccines being charged by manufacturers.
The goal behind the resolutions is to prevent an “arms race among the rich countries about purchasing the vaccines,” Cox said.
“Much of the world is in a bidding war to get the vaccines. South Africa has had to pay more than the United States or Europe did and they’re in the midst of one of these variants. South Africa has some capacity, but it seems unjust that they would be paying more than others who have the capacity to pay for it,” Cox said.
Even though the U.S. and other governments have contributed billions of dollars to the leading pharmaceutical firms for vaccine development, investors are calling for equal access globally.
“The question we’re really asking the companies is how are you planning access and how are you incorporating things like public funding into how you set prices. Because we’re an interconnected world, we’re not gong to be done with this pandemic until we are done with it everywhere,” Cox explained.
The effort, he added, is based on the U.S. Conference of Catholic Bishops’ Socially Responsible Investment Guidelines. Developed in 2003, the document outlines steps that the USCCB follows to ensure “faithful, competent and socially responsible stewardship in how it manages its financial resources.”
Under a section titled “Access to Pharmaceuticals,” the guidelines call on the international community and major pharmaceutical companies “to respond more effectively to AIDS patients in poor countries” so that people “may have access to the medicines they need.”
Further, the guidelines state, “USCCB will actively encourage and support shareholder resolutions directed toward making life-sustaining drugs more available and affordable to low-income communities and nations.”
Cox said the investment coalition is interpreting the guidelines to apply to the vaccines developed in response to the coronavirus pandemic as well.
“There is definitely a corporate role in assuring access to these lifesaving drugs and we’re asking the companies to disclose how they’re thinking about that,” Cox said.
