Zevin Advocacy Update: Q1 2017

In the first three months of 2017, the world struggled to adapt to a new and destabilizing political paradigm. Zevin Asset Management is analyzing a barrage of change and uncertainty — in trade policy, the healthcare system, climate regulation, and infrastructure — most of which threatens to roll back protections for ordinary people and create risk for companies.

But we don’t just respond to change. As impact investors, we are focused on creating positive change. As the Trump administration continues an assault on regulations and public investment, it’s not enough for portfolio companies to sit back and try to ride out the storm.

A new President and Congress bring new lobbying priorities.

This quarter, we contacted all of the companies in our clients’ portfolios asking them to define their legislative and regulatory priorities in this time of flux. This has already given us key insights about what portfolio companies like Novartis, W.W. Grainger and Microsoft want from President Trump and the Republican Congress on topics ranging from tax policy to healthcare reform and cloud computing. This outreach will help guide our future meetings with companies where we will keep pushing firms to stand up for policies that promote social justice and a healthy planet — starting with lobbying the U.S. government to honor the Paris Climate Agreement.

We’re still pressing The Walt Disney Company to come clean about its own lobbying and political activity. The company relies on a family-friendly image, but it funds the Chamber of Commerce’s anti-climate agenda and state-level groups that fight fair wages and family leave. To make matters worse, early this year CEO Robert Iger joined Donald Trump’s business advisory board — a decision that risks normalizing the administration’s extreme policies, including orders targeting immigrants and Muslims. We called out Iger in the press, explaining that Disney investors can’t afford such a close association with bad, anti-family policy. And our message was reinforced by a record level of support for our shareholder proposal asking for better disclosure and oversight of political activity.

And we have some progress to report on efforts to move companies to address worker pay gaps based on gender, race, and ethnicity. Overall, women make 79 cents for every dollar men earn. But black women earn even less, garnering only 66 percent of the pay of comparable white male workers. The unfairness is particularly stark in the retail sector where wages are low and women are shut out of many front-line management jobs. We’re taking that argument to the June shareholder meeting of TJX Companies, asking the discount fashion retailer to report gender-, race-, and ethnicity-based pay gaps. Last month, we successfully withdrew a similar proposal at Colgate-Palmolive after the giant brand company took several good steps, including creating an annual pay equity review and improving transparency into the composition of its global workforce. Going forward, we’ll keep pushing Colgate to publish its remaining pay gap and set a new standard for pay fairness.

In a busy first quarter, we took several other steps to promote positive change on economic justice, climate change, and civil rights:

• We engaged PNC Financial Services and BB&T Corporation, urging those regional banks to learn from the controversy facing banks that backed the Dakota Access Pipeline and apply more stringent social and environmental criteria to corporate lending. We also pushed the firms to improve financial access to underserved people and curb aggressive marketing and cross-selling in the wake of Wells Fargo’s fake accounts scandal.
• We also met with sustainability leaders at Amazon.com, reviewing the company’s recent efforts to boost renewable energy and reduce packaging waste. We praised those steps but urged the company to re-focus on the social impacts of its business, including working standards and wages for delivery workers and contractors. Later this spring, we’ll take our labor concerns straight to Amazon’s shareholder meeting, where we’ve co-sponsored the first-ever shareholder proposal demanding that an employer report on how it uses criminal background checks without discriminating against qualified job applicants who are seeking opportunity after incarceration.
• And we continued to press big asset managers like Franklin Resources (the parent company of Franklin Templeton Investments) and T. Rowe Price to overhaul proxy voting policies and consider supporting reasonable climate change proposals at high impact companies like ExxonMobil and Chevron. In a step toward market-wide change, both JPMorgan Chase and BlackRock announced that they would revisit their approaches to proxy voting on some social and environmental issues. The movement came in response to productive meetings and shareholder proposals co-sponsored by Zevin.

Thanks for reading and sharing. For more updates, join us on our website, Medium, and Twitter. And please don’t hesitate to contact me (pat@zevin.com) for more information about these activities and our broader advocacy efforts.

Disclosures:

1. Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen or experience.
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