Inspired by Faith, Committed to Action: The History of Shareholder Advocacy
BY JUDY BYRON, OP
Shareholder advocacy as we know it today began in the mid-20th century, shortly after the passage of the Civil Rights Act in 1964. Paul Neuhauser, a lawyer and member of the Episcopal Church Committee on Social Justice, was motivated by the U.S. civil rights movement to work for civil rights abroad—in this case, to end apartheid, South Africa’s system of institutionalized racism.
At the time, the Episcopal Church held shares in General Motors, an international company that sold cars in South Africa. In 1971, Neuhauser drafted and filed a shareholder resolution on behalf of the Episcopal Church and a few Protestant denominations, requesting General Motors stop doing business in South Africa.
Thus began a multi-year campaign that resulted in more than 200 companies withdrawing from South Africa, significantly damaging the country’s economy. Archbishop Desmond Tutu cites this work, led by religious shareholders, as one reason the walls of oppression came down and free elections were held in South Africa in 1994.
Founding the Interfaith Center on Corporate Responsibility (ICCR)
Faith-based investors discovered that they could use shareholder proposals to change corporate behavior to build a just and equitable society. Inspired by their victory, a small group of Protestant churches founded the Interfaith Center on Corporate Responsibility (ICCR) in 1971; they were soon joined by Catholic religious communities of women and men. ICCR members, “inspired by faith, committed to action,” pioneered shareholder advocacy as a tool for social change, and as Neuhauser has said, have always been ahead of the curve on social justice.
In the early 1980s, when ICCR members realized that corporate change through shareholder advocacy took time and people need instant relief and access, they founded the Clearinghouse on Alternative Investment, a way to use
Resolution at Hormel raises the issue of “superbugs” and antibiotic use in animal agriculture.
Procter&Gamble CEO agrees to discuss the environmental and health impacts of bleaching pulp and paper with chlorine.
acknowledges the risks of climate change and publishes first report on climate risk.
Campaign involving 70 companies seeks health care reform. Affordable Care Act passed in 2010.
Buy, the largest U.S. electronics retailer, phases out PVC packaging.
Affordable Care Act
their investments for the common good. The Clearinghouse brought together people and organizations needing funds and faith communities who wanted to participate in community economic development projects such as affordable housing, enterprise development, and worker-owned businesses. By 1995, these “impact investments” exceeded $300 million.
Today, ICCR is a coalition of over 300 faith- and valuesbased investors with more than $4 trillion in managed assets. The organization’s shareholder database, dating back for more than 50 years, records over 10,000 shareholder proposals that members have filed on critical environmental and social issues—including human rights, environmental justice, racial justice, health equity, corporate governance, and financial services—at some of the world’s most powerful corporations.
In addition to filing shareholder proposals, each year members engage in hundreds of dialogues with company representatives, compelling them to take responsibility for creating an “Earth Community” where “respect and care for the community of life; ecological integrity; social and economic justice; and democracy, nonviolence and peace” flourish.1
IPJC and the Northwest Coalition for Responsible
Investment
Father Michael Crosby, a Capuchin Franciscan who came to be well-known and respected in corporate boardrooms, was an important part of ICCR’s early days. He wanted the organization to be accessible to all faith-based investors, large and small. Fr. Crosby found a way to make this possible by inviting smaller religious communities to form coalitions that then became members of ICCR. IPJC was only two years old when we invited Fr. Crosby to our 1993 Socially Responsible Investment Conference. Occasionally he would come to the Northwest to give presentations on spirituality, but he told us that he wouldn’t return if we didn’t form a coalition of our
religious communities and health care systems and become a member of ICCR. A year later, we created the Northwest Coalition for Responsible Investment (NWCRI).
As NWCRI began its work for corporate change, the chief executive officer of a Fortune 500 company came all the way to Spokane, to the headquarters of one of our members, to discuss an environmental issue. When we asked him why he had come, he admitted to being curious: Why would a group of religious women file shareholder resolutions? He added that he had once heard a board member say, “You better listen to the nuns if they bring an issue to you, because in 10 to 15 years, I guarantee you that issue may turn out to be a crisis in your boardroom!”
Over the past 31 years, NWCRI’s women’s religious communities and health care systems have used their investments to bring social and environmental justice issues to the boardrooms of over a thousand corporations, filing shareholder proposals and engaging in dialogue with company management. Our mission is to turn what could be a crisis for a corporation, people, or planet into an opportunity for change for the good of the global community.
At Chevron, the first resolution on hydraulic fracturing and its impacts on air quality and the human right to water.
Campbell’s develops sustainable water policies and recognizes the human right to water.
U.S. Bank ends predatory payday loans to new customers and phases out loans to existing borrowers.
Bristol-Myers Squibb licenses hepatitis C drugs to the Medicines Patent Pool, increasing access in 112 countries.
A historic vote of 62% of ExxonMobil shareholders request a report on how their portfolio will perform if global temperatures rise an average of 2 degrees Celsius.
First-year resolution on opioid risk wins majority
“Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
Celebrating Success
In 2021, during the COVID-19 pandemic, ICCR and NWCRI members gathered on Zoom to celebrate 50 years of impact on issues of human rights, the environment, racial justice, health equity, corporate governance, and financial services through active share ownership and transformational dialogue. As one might imagine, our impacts are numerous—and those are just the ones we know about.
We’ve learned important lessons along the way, the first being that change takes time and doesn’t happen all at once, so we stay at the boardroom table for as long as it takes. It was 23 years between the first resolution on apartheid in South Africa and free elections.
The second lesson is that collaboration is our superpower. As Margaret Mead famously said, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” Recently, 31 long-term Walmart investors sent a letter to chief executive officer Doug McMillon voicing our concern that the company is dismantling many of its diversity, equity and inclusion (DEI) initiatives and commitments. NWCRI is among the ICCR members who have been meeting with Walmart about its social and environmental policies and practices over three decades.
Other articles in this issue highlight the impact of ICCR and NWCRI on the HIV/AIDS pandemic, human trafficking in the tourism industry, and the gun violence epidemic in our country.
NWCRI 25th Anniversary
JPMorgan Chase no longer finances the private prison industry.
The Investor Statement on Coronavirus Response calls for paid sick leave to protect frontline workers. It is endorsed by 336 global investors with $9.5 trillion dollars in assets.
Some
of our victories over the years:
• In 2003, we raised the issue of “superbugs” and antibiotic use in animal agriculture at Hormel.
• From 2006 to 2010, we conducted a campaign with 70 companies to win health care reform, affecting the signing of the Affordable Care Act in 2010.
• After 23 years of shareholder proposals, Home Depot released its first EEO-1 report, detailing the demographics of its employees.
• JPMorgan Chase no longer finances the private prison industry as a result of shareholder advocacy.
• Sixty-eight percent of Dollar General shareholders requested a third-party audit on the health and safety of the company’s workers.
As NWCRI and ICCR members consider our past successes and live in our present reality, we are heartened by the prayer of affirmation and hope of Dag Hammarskjöld, the second Secretary General of the United Nations: “For all that has been, THANKS, for all that is to be, YES!” We will respond to the issues of our time with persistence and in collaboration with colleagues who share a common mission.
42% of DEI resolutions win majority votes among shareholders.
Adrian Dominican Sister Judy Byron served as the program director of the IPJC and directed the Northwest Coalition for Responsible Investment (NWCRI) for 25 years. Her current ministry includes promoting racial justice in local parishes and advocating to end gun violence. She serves on the Adrian Dominican Sisters Portfolio Advisory Board and Mercy Housing Inc. Board.
68% of Dollar General shareholders request an audit on worker health and safety.
Meta engages in a campaign to end child sexual exploitation online.
Banks announce commitments to achieving net-zero greenhouse gas emissions from financing activities by 2050.
At Netflix, 43% of shareholders support a resolution requesting AI transparency report.