Faith

Faith-Based Investing: What Are Investors’ Goals in 2018?

While people of diverse beliefs participate in faith-based investing, many of them share central goals. Many of these goals are reflected in the 2018 proxy resolutions filed by members of the Interfaith Center on Corporate Responsibility (ICCR), a coalition of more than 300 institutional investors. For the 2018 proxy season, ICCR members proposed a total of 266 resolutions. Here are four areas of impact they focused on:

Climate Change

Many faith-based investors are concerned with curtailing pollution and mitigating climate change, both to safeguard the earth and to stave off humanitarian disasters that could result from escalating temperatures and the disruption of coastal communities. Speaking out against business practices that contribute to climate change was a significant priority for ICCR members: 61 resolutions put a spotlight on ways companies affect the climate.

Shareholders asked technology and engineering company Emerson, mineral product company Minerals Technologies, and industrial manufacturer Illinois Tool Works, among others, to commit to greenhouse gas emissions plans that would bring their emissions in line with goals set by the Paris Agreement.

Nine proposals specifically targeted methane, which accounts for a quarter of current global warming. In light of methane accidents like the 2016 Aliso Canyon leak, which polluted the atmosphere with 5 billion cubic feet of methane, members asked the nine companies to monitor and disclose methane leaks and to reduce methane emissions.

Members also asked 15 companies, including energy behemoth ExxonMobil, to forecast how their businesses would be affected by the economic and regulatory changes needed to bring about the Paris Agreement‘s two-degree warming target.

Human Rights

Human dignity is paramount to people of faith, and ICCR members introduced 26 resolutions advocating for vulnerable people and opposing exploitation. Four resolutions supported the rights of indigenous peoples, urging companies not to contribute to the misappropriation of their lands.

Three focused on gun safety, with members asking Dick’s Sporting Goods and gunmakers American Outdoor Brands and Sturm, Ruger & Company to report on how their practices might lead to gun violence and to reevaluate their weapons sales policies.

Five resolutions dealt with ethical recruitment, and several other resolutions touched on issues related to trafficking and forced labor. Shareholders requested that Hershey’s and Williams Sonoma report on steps they’ve taken to prevent abuses in their supply chains. In particular, shareholders asked that the companies require written contracts, put an end to the confiscation of worker identity documents, and prohibit recruiters from collecting fees from workers.

Shareholders also asked Amazon and Motorola to report on how they monitor supply-chain labor practices and how they enforce their bans on recruitment fees.

Diversity

Faith-based investors often advocate for diversity and inclusiveness. ICCR members put forward several resolutions opposing unequal treatment and discrimination, including nine focused on the gender pay gap and eight focused on discrimination based on sexual orientation or gender identity.

Twenty resolutions highlighted workplace diversity. Shareholders asked Home Depot, First Republic Bank, travel-fare aggregator Priceline Group (now Booking Holdings), and others to publish statistics on diversity in their workforces and to report on their diversity policies. Eleven resolutions asked companies to report on diversity on their boards.

Health

ICCR members proposed 12 resolutions related to health, including asking pharmaceutical wholesaler AmerisourceBergen and Mallinckrodt Pharmaceuticals to assess risks related to the opioid crisis. Another resolution asked tobacco company Altria to reduce the nicotine in its products to less addictive levels and to disclose information about nicotine content to consumers.

But the main health-related concern for ICCR members was prescription drug pricing, which is a significant barrier to healthcare accessibility. Seven proposals called attention to unaffordable prescription drugs and asked companies to consider the risks of soaring prices. Shareholders argued that companies cannot rely on price hikes indefinitely to grow their revenue because insurers and regulators won’t tolerate excessive increases.

Five pharmaceutical companies, including Lilly and Biogen, were asked to take prescription drug-pricing risks into account when determining executive compensation, so as not to incentivize their executives to inflate prices.

Through these resolutions, ICCR members highlight issues that are important in the world of faith-based investing and show public corporations that their social impact matters to shareholders. Some proposals have already effected changes: 23 of the resolutions were withdrawn when companies agreed to take the requested action. Faith-based investors hope to build on these successes and convince more companies to make socially responsible decisions.

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