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Responsible investment is a powerful form of activism because it can be applied to many different issues. If there is a social or environmental issue that interests you, money probably affects it in some way, which means that responsible investment can affect it in some way.

Below you’ll find some examples of responsible investment success stories organized by theme. In some of these stories, the change agents are responsible investment companies, and in others the change agents are institutional investors like colleges and universities. Some stories are about changing an entire industry, while others are about changing individual companies or school policies. REC was directly involved with some, but not all, of these efforts. Often, other types of activists worked in solidarity with responsible investment activists to employ many different tactics and achieve change.

These are just a small fraction of all of the responsible investment success stories. For more information, check out the websites of investment firms like Trillium Asset Management, Walden Asset Management, and Domini Social Investments, as well as coordinating organizations like CERES and ICCR.

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Climate Change

Long before political representatives were willing to take climate change seriously, shareholder advocates were bringing the issue to their corporate holdings. The world is witnessing changes in the biosphere that include a rising sea level, increasingly severe droughts, storms, floods, forest fires, and a whole host of secondary effects. Furthermore, we are already seeing that these changes in climate disproportionally affect low-income people in the U.S. and abroad. Climate change is one of the most significant environmental, human rights and equity issues of our time.

These changes affect every person on this planet, but governments are not very good at making painful short-term decisions when they can be delayed another election cycle. One of the fundamental, causal issues in the global climate change debate relates to the emission of carbon dioxide, one of the most common greenhouse gases.

Many companies have made efforts towards transparency and disclosure of information about energy use and waste, and more companies than ever have become committed to reducing the environmental costs of operations. Investors have rallied behind climate-related proxies in the last few years, illustrating a shifting tide in the corporate world.

Sometimes, the really successful climate-related shareholder activism campaigns are the ones that don’t culminate in a shareholder vote: companies often agree to address climate change in substantial ways when proxies are filed, causing lead-filers to withdraw the resolutions in favor of negotiations. As schools rush to develop ways to become more sustainable, voting proxies and investing in green buildings become even more appealing. Here are recent examples of successful shareholder efforts:

  • Beginning in 2008 and continuing today, Domini Social Investments has filed shareholder resolutions with Best Buy, Home Depot, Lowe’s, MeadWestvaco, Procter & Gamble, International Paper, and RR Donnelley encouraging these companies to adopt sustainable forestry practices. These resolutions have led to actions such as Best Buy developing a sustainable paper purchasing policy, MeadWestvaco examining the feasibility of phasing out the ale of paper made from wood fiber that is not certified by the Forest Stewardship Council, as well as Home Depot and Lowe’s publishing reports about their policies for sourcing wood. (http://www.domini.com/about-domini/News/Press-Release-Archive/Forestry_20080508.doc_cvt.htm)
  • In 2007, a shareholder resolution filed with ConocoPhillips was withdrawn when the oil company announced plans to spend $300 million on research into carbon-reducing technologies. ConocoPhillips became the first U.S. oil company to join the U.S. Climate Action Partnership, a coalition of ten corporations and four nonprofits that has called for a mandatory national framework to reduce greenhouse gas emissions by 60 to 80 percent by 2050. (http://www.ceres.org/press/press-releases/pending-global-warming-resolutions-for-2007-proxy-season)
  • In 2006, Christian Brothers Investment Services, a firm specializing in responsible investment, filed a shareholder resolution with ExxonMobil addressing its climate change policies; Christian Brothers later withdrew the resolution after the company publicly released a statement admitting that fossil fuel consumption was contributing to global warming. The statement, which made global headlines, was a major victory for responsible investors who have been filing climate-related resolutions with ExxonMobil for years. It was also a major change of direction for the company, which once funded research to discredit global warming.  In fact, the company continues to drag its feet on climate change, but investors continue to write letters, file resolutions, and meet with management in an effort to achieve eventual change. (http://www.cbisonline.com/file.asp?id=808)
  • In 2005, the Nathan Cummings Foundation filed a climate change resolution with XTO Energy requesting that a committee of independent directors of the Board assess how the company was responding to rising regulatory, competitive, and public pressure to significantly reduce carbon dioxide and other greenhouse gas emissions and to report to shareholders on its findings. XTO responded to the resolution by providing filers with a list of ways in which the company was addressing climate change. In exchange for the resolution's withdrawal, XTO agreed to create a Climate Change Committee, to publicly disclose its climate change strategy, to disclose its greenhouse gas emissions, and to formulate a plan for the reduction of methane emissions from operations. Following nearly a year of delays, XTO posted its first full-year (2006) emission inventory to its website in the spring of 2007. (http://www.nathancummings.org/annual/2005AnnualReport.pdf)

Environmental Justice

The popular conception of environmentalism has become one of global problems. Greenhouse gas emissions, ozone depletion, and loss of biodiversity all present a broad notion of what we should be fighting for—and against. But, for children suffering from asthma, for workers exposed to toxic chemicals, and for everyone whose poverty or race brings them closer to harm, environmental risk is a local problem. Environmental justice recognizes the economics of “not in my backyard.” Here are examples of some recent shareholder advocacy work:

  • In 2010, Loyola University of Chicago filed a resolution with J.P. Morgan Chase concerning their financing of companies that engaged in mountaintop removal mining (MTR), a highly destructive form of coal mining that has had severe environmental and public health consequences in communities across Appalachia. The SEC omitted the resolution, but with the coordination of supporting allies and universities by REC, J.P. Morgan Chase released its strongest statement yet on the issue and entered dialogue; they now have a policy that limits MTR financing.  
  • Green Mountain College’s Committee on Investor Responsibility has successfully convinced the school to invest 15% of its endowment in Portfolio 21, an environmentally screened global equity mutual fund that uses positive and negative screens to invest in companies that uphold positive environmental practices and exclude those that do not.
  • In 2009, Bard College successfully pressured McDonalds to agree to formally review and implement pesticide use reduction in its potato supply chain and to share its findings with shareholders. This action was the result of a shareholder resolution filed by Bard with the support of the Investor Environmental Health Network, the AFL-CIO, and Newground Social Investment. (http://www.iehn.org/news.press.mcdonalds.php)

Labor Issues and Fair Trade

The term “sweatshop” dates back to the industrial revolution. As labor shifted from farms to factories with little government regulation, a whole new species of work emerged. Of course, peasants had known drudgery and slavery for ages, but the advent of the factory created opportunities for the excessive and abusive exercise of managerial authority that set a new precedent. Early sweatshops were characterized by child labor, 12-16 hour days, unsafe conditions, poor ventilation, dangerous equipment, low pay, and an oppressive patriarchy dominating an often female workforce.

Alas, the modern sweatshop bears a striking resemblance. The worst modern sweatshops are known for their lax labor standards, loose compensation arrangements, threats to worker safety, forced overtime, aggressive anti-unionism, and child labor. Governments have trouble controlling corporate behavior: if labor laws get stricter in the U.S., companies will just pack up and move elsewhere. The continued existence of sweatshops is cause for serious concern among corporations, citizens and governments.

Complex contracting systems and a thick-skinned industry tolerance for sweatshops make change difficult. The use of weak labor markets in the production of nearly everything makes it almost impossible to invest without owning companies that profit from sweatshop labor. But nevertheless, many investors and investment firms are using their power as shareholders to improve conditions for low-wage workers around the world. Many have come to recognize the power of fair trade, a trade system based on a living wage and sustainable working conditions for the producer and the environment where the product is produced. Here are a few recent examples of how they’ve done it:

  • In 2011, on the recommendations of their respective committees on investor responsibility, Brown University and the University of Pennsylvania announced that they would not be reinvesting in HEI Hotels and Resorts due to the company’s widespread labor abuses. This was the first time that universities made investment decisions based on workers’ rights. (http://www.heiworkersrising.org/?cat=5)
  • In 2010, after three years of shareholder engagement, Nucor—the largest steel producer in the United States—agreed to implement stringent regulations to eliminate Brazilian slave labor from its supply chain. (http://www.domini.com/shareholder-advocacy/Human-Righ/index.htm “Domini Reaches Agreement with Nucor on Slavery in Brazil”)
  • In 2007, after learning about the annual forced mobilization of child laborers in Uzbekistan during cotton harvesting season, a group of investors sent letters to more than 100 corporations around the world, spurring the companies to start tracing the sources of their cotton purchases. The group also met with the U.S. State Department and sent letters to Uzbek President Karimov, the Secretary General of the International Labor Organization, and Secretary of State Condoleeza Rice. Activists and shareholders continue to organize around this issue today. (http://www.domini.com/shareholder-advocacy/History-of/2009-History-of-Success.doc_cvt.htm and http://www.ejfoundation.org/page93.html#other)
  • In 2005, Domini Social Investments filed a shareholder resolution addressing labor standards at Apple Computer. This resolution led Apple to adopt a code of conduct for the manufacturers of its products around the world. The code incorporates conventions of the International Labor Organization such as freedom of association and collective bargaining. (http://www.domini.com/shareholder-advocacy/History-of/2005-History-of-Success.doc_cvt.htm)
  • In 2004, the Gap released its first Social Responsibility Report in response to a shareholder resolution filed by Domini Social Investments. The report—the first of its kind—publicly rated the way factories in the Gap’s global supply chain treated their workers. The most recent report notes that the company conducted inspections in over 99% of its garment factory base. (http://www.domini.com/shareholder-advocacy/Human-Righ/TWYIM-Human-Rights.doc_cvt.htm)
  • In 2003, shareholders invested in Proctor & Gamble convinced the corporation to offer its first line of Fair Trade Certified® coffee in an effort to provide a solid, independent certification process that protects a living wage for growers. (http://www.domini.com/about-domini/News/Press-Release-Archive/P-G-Coffee.doc_cvt.htm)
  • In 2003, Oxfam filed a resolution with Yum Brands, Inc., the fast-food conglomerate that operates Taco Bell, KFC, Pizza Hut, Long John Silver’s, and A&W to support worker’s rights and sustainability. This move complemented a long-standing student-farm worker campaign to secure a living wage for tomato pickers in Florida. An unprecedented 43% of shareholders voted to support this resolution, and soon the company ceded to activist and worker demands. (http://www.csrwire.com/press_releases/21412-Yum-Brands-Shareholders-Vote-on-Resolution-Supporting-Workers-Rights)

Equality in the Workplace

Discrimination is inexcusable, but too often excused. On an individual level, discrimination is wrong whether a person is being excluded because of her age, race, sex, religion, ethnicity or sexual orientation. On a social level, discrimination perpetuates the power relations and resource allocations that divide our society by race, class and gender. Certainly, discrimination is not the only cause of these injustices, but it plays a very important part.

Most people agree that discrimination is wrong, particularly in the diverse academic communities that we inhabit. Few administrators would condone discrimination in their own hiring processes and most would prefer that the university not “profit” from discrimination, even passively. But that’s exactly what happens when schools profit from corporate policies and practices that allow workplace discrimination. Besides being unfair and illegal, workplace discrimination is also bad business: when companies cut off whole segments of their applicant pool, they put themselves at a disadvantage by missing talented applicants. Here some examples of recent anti-discrimination successes through responsible investment:

Oppressive Governments

The U.S. government will sometimes take the extreme step of imposing sanctions on countries considered authoritarian, brutal, and oppressive as a way to help end such regimes. In most cases, U.S. corporations are forbidden to operate in these nations. Sometimes, however, companies are permitted to do business and investors must pressure companies to end practices which benefit brutal and authoritarian regimes.

  • In 2010, shareholders led by Domini Social Investments convinced Toyota to end its joint venture with the brutal military regime in Burma. Toyota had been in a partnership with the Burmese regime to sell motorcycles, light trucks, and cars. The regime had tightly restricted the market for the vehicles to only wealthy citizens and those with military connections. (http://www.domini.com/common/pdf/SocialImpactUpdate_2010_Q3.pdf)
  • In 2008, students at Columbia University successfully approached their Committee on Investor Responsibility to write a letter expressing concern to Chevron’s management over the company’s ties to the Burmese military junta.
  • In the 1980s, universities’ divestment from South African corporations played a significant role in the dismantling of apartheid.

Political Contributions

Corporations have a number of natural advantages over citizens in the quest for control of the legislative, judicial and administrative process. Corporations accumulate significant resources that are able to motivate the political process. Corporations can hire elected officials and bureaucrats after they’ve done a favor to industry. It isn’t exactly bribery, but it sure looks like it. Corporations can wait; their interests don’t rise and fall like social movements, so they will be ready when interest groups are distracted by other issues. Corporations can make choices that powerfully affect local constituencies by bringing jobs, business and taxable income to an elected official’s constituency. Certainly, the rule of law can be employed to control these advantages, but some shareholder advocates are working to encourage corporations to self-regulate their political activity.

Many corporations do not disclose their contributions to political parties, campaigns, lobbying firms, or trade associations. Trade associations generally gather dues from their members for lobbying purposes. When pundits refer to “Big Pharma” or “Big Agra,” this is usually who they mean. Corporations levying undue influence in the political process make trouble for democracy in both parties of Congress.

Here’s what activists are doing about it:

  • In 2009, in response to shareholder resolutions lead filed by the Center for Political Accountability, corporations such as Heinz and Microsoft agreed to adopt disclosure and board oversight of political spending with corporate funds. (http://www.politicalaccountability.net/index.php?ht=d/Articles/view/category/pid/188/cat_id/1185/archive/Y “New Companies Bring Political Disclosure to Nearly Half of Trend-Setting S&P 100” and “Political disclosure gains new support among S&P 100 companies as 2009 proxy season closes”)
  • In 2007, the Center for Political Accountability and a coalition of shareholders successfully pressured General Electric, American Electric Power, Hewlett Packard and DuPont to begin publishing a list of all of their political donation recipients from state and local candidates to 527 organizations (the type that made “swift-boating” a verb). Several firms also agreed to disclose their contributions to trade associations when used for political purposes. (http://www.socialfunds.com/news/save.cgi?sfArticleId=2227)
  • In 2007, the Center for Political Accountability and a coalition of shareholders  also successfully pressured Aetna, Colgate-Palmolive, DuPont, FirstEnergy, Pfizer, WellPoint, and Xcel Energy to report their trade association payments used for political purposes as part of their overall disclosure of political spending with corporate funds. CIGNA, Chevron, EMC, General Motors and Lockheed Martin adopted disclosure policies of their soft money political contributions. All of the companies agreed to board oversight of their political spending. (http://www.politicalaccountability.net/index.php?ht=d/ArticleDetails/i/534)

HIV/AIDS

AIDS is a risk for us all, but right now it is having the greatest and most concentrated impact in sub-Saharan Africa. In some countries, governments have not taken effective actions to combat the HIV/AIDS pandemic. Some even deny the connection between the HIV virus and AIDS. Antiretroviral medications have drastically prolonged the life spans of infected persons, but in order to enjoy the benefit of these medications, a person needs to know that she is infected, and she needs to be able to afford the drugs. Yet drug prices remain too high for poor countries to afford. Responsible investors like the Interfaith Center on Corporate Responsibility (ICCR), among others, have encouraged corporations to step in with solutions (http://www.iccr.org/issues/healthcare/index.php).  Here is one example of successful advocacy:

  • In 2004, Interfaith Center on Corporate Responsibility members won management backing for a resolution requesting that Cocoa-Cola report on the impact that HIV/AIDS was having on its African operations. Shareholders backed the proposal with an incredible 97% of the vote. This initiative put pressure on Pepsi, which quickly agreed to create a similar program. (http://ussif.org/projects/advocacy/resolutions.cfm “Shareholder Success Fact Sheet”).
  • In 2004, Ford Motor Company agreed to issue an HIV/AIDS report after successful dialogue with investors. They went on to introduce policies which included HIV screening, access to antiretroviral drugs, education, and counseling to their employees worldwide. They were the first automaker to do so, and were instrumental in developing a blueprint for HIV prevention and care in the workplace. (http://www.socialfunds.com/news/article.cgi/1608.html and www.ford.com/our-values)

Prison Justice

In the United States, incarceration rates have ballooned in the past three decades: more people are being put away and they’re being kept for longer sentences. While the U.S. comprises less than 5% of the global population, we currently incarcerate nearly 25% of the global prison population (www.Sentencingproject.org). The imposition of criminal justice in the United States is far from representative: 1 in every 8 black men is in prison and 60% of all people in prison are from an ethnic minority (www.Sentencingproject.org).

Racism, sexism and other systems of oppression interact and infuse meaning into this broken system of “justice,” but for many corporations the rapid prison population increase means something else—profit. These are boon times for the so-called prison industrial complex, including the private prison industry. In 1990, there were just five private prisons in the United States (http://www.corpwatch.org/article.php?id=867). By 2007, there were 264 (Frank Schmalleger, Corrections in the 21 Century, McGraw Hill: 2007).

Colleges and universities often support the prison industrial complex by contracting with companies that exploit prison labor or by investing directly in private prisons. But it doesn’t have to be this way. Why? Because when your school has a responsible investment policy, it changes the way they do business. Here are two recent examples of how students have used investment policy to fight prison injustice:

  • In 2006, after a yearlong campaign, Yale University students were able to cause enough reputational damage to Farallon Capital Management LLC, a hedge fund in which their school was heavily invested, to motivate that company to divest their $90 million of stock in Corrections Corporation of America. Yale didn’t actually divest from Farallon, organizers there just created enough embarrassment for Farallon that they were forced to sell their stake in CCA. This was a broad victory: in some sense, it amounted to all of Farallon’s clients divesting from CCA as well. (http://www.yaledailynews.com/news/2006/may/19/yale-investment-vehicle-sells-private-prison-stock/)
  • In 2001, after years of protests and organizing by students nationwide, Sodexho Alliance, the largest investor in Corrections Corporation of America (the country’s largest private prison company), divested from CCA. A major issue for students was that Sodexho, a Paris-based firm that bought out Marriott, is a primary provider of campus food services. Students who were forced to buy meal plans by their schools were sickened knowing that their money, which they had no choice but to give their schools, was indirectly supporting private prisons. Sodexho continues to serve meals in prisons and college campus eateries, but it has withdrawn its investment dollars from CCA. (http://archive.corporatewatch.org/profiles/sodexho/sodexho.htm)

Genocide

During the first decade of the 21st century, student activists around the U.S. campaigned for the end of the genocide in the Sudan. In 2003, the government of Sudan became involved in the genocide of all non-Arab people living in the Darfur region. From 2003 to 2011, over 400,000 civilians died and over 2.5 million people were displaced (http://www.darfurscores.org/darfur). The genocide was met with vocal criticism and outcry from the international community, including the UN and many human rights organizations.

The university responsible investment community also took action on the issue of the genocide. Students around the nation pressured their universities to divest from oil companies operating in the region, which provided the chief income for the government. Over 60 U.S. universities adopted divestment policies, according to the Sudan Divestment Task Force. (http://investorsagainstgenocide.net/page1004)