Stepping Up in the Virus Crisis: Leaders in the Oil & Gas Sector

G&A Institute Team Note
We continue to bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency. This is post #16 in the series, “Excellence in Corporate Citizenship on Display in the Coronavirus Crisis”.

13 April 2020    #WeRise2FightCOVID-19 “Corporate Purpose – Virus Crisis”

By Sarah El-Miligy – Sustainability Reporting Analyst-Intern, G&A Institute

The Oil and Gas Sector has already taken strong hits due to the OPEC+ conflict and the Saudi-Russian oil price war prior to the outbreak of the novel coronavirus (COVID-19) Pandemic.

The worldwide pandemic was the second hit this year that has dramatically affected the oil and gas industry, causing significant disruption with long-term harmful consequences.

According to the IEA, for the 1st time since 2009 the global demand for oil is expected to fall by 2.5 million barrels per day in the 1st quarter of 2020.

These negative consequences are expected to extend out to 2022.

However, the industry’s recovery given the amount of damage caused by the virus can’t be predicted at this stage, given the evolving nature of the coronavirus and the widespread impact on the global society.

The oil and gas industry has had to take a major step back — as have many different industries across the globe – due to the COVID-19 pandemic.

The Largest of the Oil & Gas Companies

The top industry players are found to be ready to fight back and help to mitigate the drastic effects of the pandemic and to support their communities through a strong global response.

Despite being financially-affected due to the decline in production, travel restrictions, drop in oil demand and lower oil prices resulting from the pandemic, many companies in the industry have contributed to the global efforts taken in response to the coronavirus outbreak.

For example, some by directing considerable amount of funds to the World Health Organization’s (WHO) COVID-19 Solidarity Response Fund as a part of their demonstration of social responsibility towards their employees, customers and the communities where they operate.

Looking at the top 10 O&G companies, some of them have invested in research and innovation, even shifting their production lines and putting their technical knowledge and financial resources in use in order to help fighting the battle against the virus. Other companies had a quick response and supplied key protection products used by the healthcare professionals.

On the internal front, the oil and gas companies have shown immediate responses to guarantee the safety of their employees and customers.

This begins with updating their health and safety protocols and constantly introducing new, up-to-date protection policies in order to ensure the safety of their dispersed staff.

Social distancing measures have been one of the premier precautionary actions adopted and stressed upon industry-wide.

In response to the many negative impacts of the pandemic, the major players in the oil and gas industry — such as BP, ExxonMobil, Total, Chevron — have demonstrated significant Corporate Citizenship practices while dealing with the current crisis at all levels.

I’ve compiled 10 corporate examples for you:

1- ExxonMobil

ExxonMobil Global Response to the COVID-19 Crisis

According to the company’s official website the efforts by the Oil & Gas giant in fighting COVID-19 include:

  • Supporting vulnerable communities, specially in the most infected countries through financial donations, subsidized fuel supply and providing other significant products required to address the COVID-19 challenges.
  • Investing in research and development, producing an innovative reusable personal protection equipment to the healthcare staff and other consumers.
  • Taking a number of measures to slow the spread of the virus in many European and Asian countries.
  • Directing operations to focus on manufacturing ingredients such as isopropyl alcohol, which is used in the production of hand sanitizers, alcohol wipes and disinfectant sprays.
  • Implementing health and safety precautionary actions in order to protect the employees such as applying restrictions on business travel, as well as applying working from home and social distancing policies.
  • In terms of customer safety, ExxonMobil has increased the safety and hygiene levels in all their stations and stores. As well as applying online payment where available in order to limit the money transactions.
  • Implementing a 14-day work-from-home policy for individuals traveling from locations with sustained community transmission, as defined by the U.S. NIH and Centers for Disease Control and Prevention.

West Texas Food Bank Initiative
ExxonMobil is supporting hunger relief in the Midland-Odessa area and across West Texas with a US$100,000 donation to the West Texas Food Bank to help those facing difficult economic circumstances resulting from the COVID-19 pandemic.

Supporting Online Education
ExxonMobil supports Online Education with $100,000 funds for Carlsbad Municipal Schools in response to the distance-based education policies due to the coronavirus outbreak. 14 schools in the district have been closed affecting 7,000 students. This funding will support providing low-income students with the needed equipment and internet connectivity facilitating the transition to online learning.

The Global Center for Medical Innovation Partnership
ExxonMobil is aware of the scarcity of protective masks and responded by manufacturing reusable protective masks to help solve the problem, in collaboration with the Global Centre for Medical Innovation (GCMI).

The mask would use disposable cartridges containing filter fabrics and would withstand sterilization. Because of this, it would not need to be replaced. The company and center stated that the new mask design covered the mouth and nose even better than existing N95 masks.

Prototypes are currently being tested and reviewed by the U.S. Food and Drug Administration.

If/when approved, production will begin immediately, with ExxonMobil supporting the identification of manufacturers familiar with the materials and process to quickly deliver the masks to doctors, nurses and health care providers.

Once approved, manufacturers indicate they will be able to produce as many as 40,000 ready-to-use masks and filter cartridges per hour

Source

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2- BP

The Corporation Supporting Communities

  • The BP Foundation will donate $2 million USD to the WHO COVID-19 Solidarity Response Fund to support medical professionals and patients worldwide by providing critical aid and supplies. The Solidarity Response Fund also helps track and understand the spread of the COVID-19 virus and supports efforts to develop tests, treatments, and ultimately, a vaccine.
  • In Brazil, BP is following a different approach, allocating their own resources (ethanol from sugarcane used normally in fuel) to use them as a disinfectant, not only for their employees use but also distributing it to local health services to help close to 1.4 million people in danger and risk of infection.
  • BP also started offering free fuel to emergency service vehicles in the United Kingdom, as well as supplying free fuel to jets that serve as air ambulances there, along with their continuous support to the efforts in Australia, Spain, Turkey and Poland to control the pandemic.
  • In the UK, emergency service vehicles can refuel for free at BP retail stations as well as supplying free fuel to air ambulances. In additional, supporting similar efforts in Spain, Turkey, Poland, and Australia.
  • And in Germany where they have provided fuel cards to health care workers.

BP Turkey will provide free fuel to ambulances operated by the Ministry of Health Istanbul Directorate to support the fight against COVID-19

Source https://www.bp.com/en/global/corporate/news-and-insights/covid-19-bp-response.html

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3- Total Group

France today is one of the most affected countries with high numbers of coronavirus cases, and the nation’s companies are responding to the pandemic spreading.

The French oil & gas player “Total Group” has been consulting with the French health authorities to supply the healthcare staff in France with gasoline vouchers worth up to 50 million Euros that can be used at Total stations across the country.

The company has provided the hospitals’ professionals with a telephone number and an email published on their website in order to receive their vouchers.

“In this period of crisis, Total’s teams remain mobilized to enable French people to make all their necessary travel arrangements. With its nationwide network, Total is working alongside those who are fighting the epidemic everywhere. Which is why the Group has decided to make this practical gesture of support for our hospital staff, who are working to ensure the health of patients.” –  Patrick Pouyanné, Chairman and CEO of Total

Moreover, the Total Foundation will contribute €5 million to the Pasteur Institute and to hospital and health associations involved in the fight against COVID-19.

Source https://www.total.com

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4- Shell

Caring for the People

Shell is doing many things to keep their customers, colleagues and communities safe. These include carrying out enhanced cleaning operations, increasing stocks of sanitation products and other essential goods, social distancing, working from home policies and health monitoring for teams at retail sites

Caring for the community:

  • Shell has also increased the production of some of the key products which is used in manufacturing soaps and sanitizers in response to COVID-19
  • Shell Manufacturing plants in the Netherlands and Canada are diverting their resources to produce isopropyl alcohol (IPA) as fast as they can. IPA makes up about half the content of the hand-sanitizing liquids being used to keep the virus down around the world.
  • The Shell team is also working closely with governments to keep track of and help meet evolving needs. On March 20, Shell announced that it would make 2.5 million liters of IPA — roughly equivalent to an Olympic-sized swimming pool — available free of charge for the Dutch healthcare sector.

On March 31, the Government of Canada listed Shell Canada as one of the Canadian companies that has stepped up to help during this crisis. Shell is donating 125,000 litres of IPA to the Government of Canada free of charge over the next three months to help the Canadian healthcare sector.

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5- Chevron Corporation

US operator Chevron has also donated $7 million to food banks, education and health services, and is matching employee donations two-to-one, in an initiative to integrate their employees in the world goal in fighting the pandemic.  Actions:

  • $500,000 has been allocated to purchase the required equipment of online learning to the Donors Choose program, “Keep Kids Learning”.
  • Helping to fund emergency services in remote parts of Western Australia and providing medical supplies to hospitals in Thailand.
  • More than $2 million has been granted to the American relief efforts in several U.S./ states and an additional $2 million to match 2:1 employee contribution to U.S.-based nonprofits.

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6- Valero
In a similar effort, the large refining company Valero has elected to donate $1.8m to fight the virus in the cities where it operates.

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7- OMV

Austrian oil, gas and petrochemical company OMV is donating $1.09m of fuel cards to the Austrian Red Cross and Caritas Austria, a food and shelter charity.

OMV Chairman and CEO Rainer Seele said: “These aid workers accomplish great things. We are helping them get around, which is an essential factor in delivering provisions and support to people in need as well as emergency aid”.

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8- Sinopec

Sinopec Corp., China’s leading energy and chemical company, has shown support and solidarity to the international community by supplying 10,256 tones of “much-needed bleaching powder” to more than 10 affected countries including Italy, France, Thailand, Australia, New Zealand and Vietnam.

The company has allocated limited time in their Yanshan Factory in Beijing to manufacture fabrics that are put in use to make the N95 disposable masks.  They got this assembly line running in just 12 days in order to cover the shortage in fabrics required to manufacture these masks to help give back to the society.

Source http://www.sinopecgroup.com/group/en/Sinopecnews/20200327/news_20200327_696607861362.shtml

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9- Southern Company Gas

Atlanta-based Southern Company Gas and its subsidiaries have committed a total of $4.85 million in support of communities affected by the coronavirus outbreak.

The Southern Company Gas Charitable Foundation will award $2.5 million in support of several human services organizations — including Meals on Wheels, American Red Cross, the Salvation Army, and United Way, in seven states,.

The Alabama Power Foundation and Georgia Power Foundation have each pledged $1 million and the Mississippi Power Foundation has pledged $350,000 to the effort.

Source https://www.webwire.com/ViewPressRel.asp?aId=257009
https://scgcares.org/

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10- Sempra Energy

In San Diego, California, Sempra Energy Foundation has established a $1.75 million Nonprofit Hardship Fund to provide expedited grants ranging from $500 to $50,000 to small and midsize nonprofits serving the health, education, welfare, or social services in response to COVID-19 to the individuals and families in California, Texas, and Louisiana impacted by the coronavirus.

Source https://www.sempraenergyfoundation.org/pages/areas-of-giving/health-and-safety.shtml

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CONCLUSION

This COVID-19 pandemic is an unprecedented worldwide crisis that not only affecting the oil & gas industry but every industry and household around the globe. In response, many of the top oil and gas players concluded that to help overcome the affects of this horrific crisis they have to give back to their communities, employees and customers and unit to do their part in supporting and mitigating these negative effects of the pandemic.

REFERENCES

  1. https://www.al-monitor.com/pulse/originals/2020/03/covid19-fear-oil-market-mideast-coronavirus.html
  2. https://www.offshore-technology.com/features/coronavirus-fight-charity-help-covid-19/

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About the Author
Sarah El-Miligy
is a Sustainability Reporting Analyst-Intern with G&A Institute. She was was graduated from the Faculty of Economic studies and Political science at Alexandria University, holding a bachelor degree in Political science and she is currently acting as a Teacher Assistant in scientific research methodologies and Diplomatic and Consular Relations in the political section department and a former international diplomacy coordinator with Ambassador Sameh Abu- El Enien – Deputy Foreign Minister and Director of the Egyptian Diplomatic Academy at Universidad Oberta de Cataluña.

Sarah El-Miligy is also a Sustainability Research Analyst in Egypt at DCarbon for Environmental and Sustainability Consultancy, the first and sole Certified Global Reporting Initiative Training Partner in Egypt and a member of the GRI Gold Community.

She has a broad experience in volunteering and working abroad with the European Union, United Nations and the League of Arab States — specifically in the fields of Sustainable Development, Climate Change, Peacebuilding and Women and Youth Empowerment.

G&A Institute Team Note
This is another in our series – “Excellence in Corporate Citizenship on Display in the Coronavirus:. We bring you news of private (corporate and business), public and social sector developments as organizations in the three societal sectors adjust to the emergency.

New items will be posted at the top of the blog post and the items posted today will move down the queue.

We created the tag “Corporate Purpose – Virus Crisis” for this continuing series – and the hashtag #WeRise2FightCOVID-19 for our Twitter posts. Do join the conversation and contribute your views and news.

Do send us news about your organization – info@ga-institute.com so we can share. Stay safe – be well — keep in touch!

California – America’s Sovereign State of Sustainability Superlatives!

While the Federal Government Leaders Poo-Pooh Climate Change, the Sovereign State of California Continues to Set the Pace for America and the World!

Focus on The State of California – the America’s Sovereign State of Superlatives Including in the Realm of Societal Sustainability…

By Hank Boerner – Chair and Chief Strategist – G&A Institute

We are focusing today on the “Golden State” – California – America’s sovereign state of sustainability superlatives!

The U.S.A.’s most populous state is forceful and rigorous in addressing the numerous challenges of climate change, ESG issues, sustainable investing and other more aspects of life in this 21st Century.

Think about this: California is by itself now the fifth largest economy in the world. The total state GDP (the value of goods & services produced within the borders) is approaching US$ 3 trillion. The total U.S.A. GDP is of course the largest in the world (it includes California GDP) and then comes China, Japan, Germany… and the state of California!

The California population is about 40 million people – that means that roughly one-in-eight people in the U.S.A. live in the Golden State.

Stretching for 800+ miles along the coastline of the Pacific Ocean, California is third largest in size behind Alaska (#1)  and Texas and takes the honor of setting the example for the rest of the U.S.A. in societal focus on sustainability.

Most investors and public company boards and managements know that the large California pension fund fiduciaries (institutional investors) often set the pace for U.S. fiduciary responsibility and stewardship in their policies and activities designed to address the challenges of climate change, of global warming effects.

The state’s two large public employee pension funds —  CalPERS (the California Public Employees’ Retirement System) and CalSTRS (the California State Teachers’ Retirement System) have been advocates for corporate governance reforms for public companies whose shares are in their portfolios.

CalPERS manages more than US$350 billion in AUM; CalSTRS, $220 billion.

A new law in California this year requires the two funds to identify climate risk in their portfolios and to disclose the risks to the public and legislature (at least every three years)

CalSTRS and CalPRS will have to report on their “carbon footprints” and progress made toward achieving the 2-Degrees Centigrade goals of the Paris Accord.

Looking ahead to the future investment environment — in the  emerging “low carbon economy” — CalPERS is pointing more of its investments toward renewable energy infrastructure projects (through a direct investment program). The fund has invested in two solar generation facilities and acquired a majority interest in a firm that owns two wind farms.

Walking the Talk with proxy voting: long an advocate for “good governance,” CalPERS voted against 438 board of director nominees at 141 companies this year in proxy voting. CalPERS said this was based on the [companies’] failures to respond to it effort to engage with corporate boards and managements to increase board room diversity.

CalPERS’ votes including “no” cast on the candidacy of numerous board chairs, long-term directors and nominating & governance committee chairs. This campaign was intended to “create heat” in the board room to increase diversity. CalPERS had solicited engagements with 504 companies — and more than 150 responded and added at least one “diverse” director.  CalSTRS joins its sister fund in these campaigns.

During the year 2018 proxy voting season, to date, CalPERS has voted against executive compensation proposals and lack of diversity in board room 43% of the time for the more than 2,000 public companies in the portfolio.

Other fiduciaries in the state follow the lead of the big funds.

The San Francisco City/County Employee Retirement Fund

The San Francisco Employees’ Retirement System (SFERS) with US$24 billion in AUM recently hired a Director of ESG Investment as part of a six-point strategy to address climate risk.  Andrew Collins comes from State Street Global Advisors (SSgA) and the Sustainable Accounting Standards Board (SASB – based in SFO) where he helped to develop the ESG accounting standards for corporations in 80 industries.

The approach Collins has recommended to the SFERS Investment Committee:

  • Engagement through proxy voting and support for the Investor Network on Climate Risk (INCR) proxy resolutions.
  • Partnerships with Climate Action 100+, Principles for Responsible Investment (PRI), Ceres, Council of Institutional Investors, and other institutional investor carbon-reducing initiatives.
  • Active ESG consideration for current and future portfolio holdings.
  • Use of up-to-date ESG analytics to measure the aggregate carbon footprint of SFERS assets; active monitoring of ESG risks and opportunities; continued tracking of prudent divestment of risky fossil fuel assets.

The staff recommendations for the six point approach (which was adopted) included:

  • Adopt a carbon-constrained strategy for $1 billion of passive public market portfolio holdings to reduce carbon emissions by 50% vs. the S&P 500 Index.
  • Hire a director of SRI to coordinate activities – that’s been done now.

As first step in “de-carbonization” the SFERS board approved divestment of ExxonMobil, Royal Dutch Shell and Chevron (September 2018) and will look at other companies in the “Underground 200 Index”.  The pension fund held $523 million in equities in the CU200 companies and a smaller amount of fixed-income securities ($36MM).

Important background is here:  https://mysfers.org/wp-content/uploads/012418-special-board-meeting-Attachment-E-CIO-Report.pdf

There are 70,000 San Francisco City and County beneficiaries covered by SFERS.

At the May 2017 SFERS board meeting, a motion was made to divest all fossil fuel holdings.  An alternative was to adopt a strategy of positive investment actions to reduce climate risk. The board approved divestment of all coal companies back in 2015.

California Ignores the National Leadership on Climate Change

In 2015, the nations of the world gathered in Paris for the 21st meeting of the “Conference of Parties,” to address climate change challenges. The Obama Administration signed on to the Paris Accord (or Agreement); Donald Trump upon taking office in January 2017 made one of his first moves the start of withdrawal from the agreement (about a three year process).

American states and cities decided otherwise, pledging to continue to meet the terms previously agreed to by the national government and almost 200 other nations – this is the “We are still in movement.”

The State of California makes sure that it is in the vanguard of the movement.

This Year in California

The “Global Climate Action Summit” was held in San Francisco in September; outgoing Governor Jerry Brown presided. The meeting attracted leaders from around the world with the theme, “Take Ambition to the Next Level,” designed to encourage collaboration among states, regions, cities, companies, investors, civic leaders, NGOs, and citizens to take action on climate change issues.

Summit accomplishments:  there were commitments and actions by participants to address: (1) Healthy Energy Systems; (2) Inclusive Economic Growth; (3) Sustainable Communities; (4) Land and Ocean Stewardship; and (5) Transformative Climate Investments.  Close to 400 companies, cities, states and others set “100 percent” renewable energy targets as part of the proceedings.

New “Sustainability” Laws

The California State Legislature passed the “100 Percent Clean Energy Act of 2018” to accelerate the state’s “Renewable Portfolio Standard” to 60% by year 2030 — and for California to be fossil free by year 2045 (with “clean, zero carbon sourcing” assured). Supporters included Adobe and Salesforce, both headquartered in the Golden State; this is now state law.

Governor Jerry Brown issued an Executive Order directing California to achieve “carbon neutrality” by the year 2045 — and to be “net zero emissions” after that.

Building “De-Carbonization”

The state legislature this year passed a “Investor Network on Climate Risk (INCR) ” measure that is now law, directing the California Energy Commission to create incentives for the private sector to create new or improved building and water heating technologies that would help reduce Greenhouse Gas emissions.

Water Use Guidelines

Water efficiency laws were adopted requiring the powerful State Water Resources Control Board to develop water use guidelines to discourage waste and require utilities to be more water-efficient.

About Renewables and Sustainable Power Sources

Walking the Talk: Renewables provided 30% of California power in 2017; natural gas provided 34% of the state’s electricity; hydropower was at 15% of supply; 9% of power is from nuclear. The state’s goal is to have power from renewables double by 2030.

California utilities use lithium-ion batteries to supplement the grid system of the state. PG&E is building a 300-megawatt battery facility as its gas-generating plants go off-line.

Insurance, Insurers and Climate Change Challenges

There are now two states — California and Washington — that participate in the global Sustainable Insurance Forum (SIF); the organization released a report that outlines climate change risks faced by the insurance sector and aims to raise awareness for insurers and regulators of the challenges presented by climate change. And how insurers could respond.

The Insurance Commissioner of California oversees the largest insurance market in the U.S.A. and sixth largest in the world — with almost $300 billion in annual premiums.  Commissioner Dave Jones endorsed the 2017 recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (the “TCFD”) and would like to see the now-voluntary disclosures be made mandatory by the G-20 nations. (The G-20 created the Financial Stability Board after the 2018 financial crisis to address risk in the financial sector).

In 2016 the Insurance Commissioner created the requirement that California-licensed insurance companies report publicly on the amount of thermal coal enterprise holdings in portfolio — and asked that the companies voluntarily divest from these enterprises.  Also asked: that insurers of investments in fossil fuel companies (such as thermal coal, oil, gas, utilities) survey or “data call” on these companies for greater public financial disclosure.

What About a Carbon Tax for California?

The carbon tax – already in place. California has a “cap and trade” carbon tax adopted in 2013; revenues raised go into a special fund that finances parks and helps to make homes more energy efficient. The per ton tax rate in 2018 was $15.00.  The program sets maximum statewide GhG emissions for covered entities in power and industrial sectors and enables them to sell allowances (the “trade” part of cap & trade). By 2020, the Cap and Trade Program is expected to drive more than 20% of targeted GhG emissions still needed to be reduced.

As we said up top, the “Golden State” – California – is America’s sovereign state of sustainability superlatives!

There is more information for you at G&A Institute’s “To the Point!” management briefing platform:

Brief:  California Leads the Way (Again) – State’s Giant Pension Funds Must Now Consider Portfolio Climate Risks & Report on Results – It’s the Law

 

 

INSTITUTIONAL INVESTORS LAUNCH ALLIANCE FOCUSED ON HUMAN RIGHTS

by Hank Boerner – Chair and Chief Strategist, G&A Institute

ICCR Provides Leadership for Investor Collaboration To Advance Corporate Sector and Investor Action on Human Rights Issues

The recently-launched Investor Alliance for Human Rights provides a collective action platform to consolidate and increase institutional investor influence on key business and human rights issues.

For nearly 50 years, the Interfaith Center on Corporate Responsibility (ICCR) has been engaging with corporate managements and boards, coalescing with asset owners and managers and waging campaigns on key E, S and G issues.

ICCR has become a major influence for investors at corporate proxy voting time, and in ongoing investor-corporate engagements.

Consider:  The member institutions have AUM of US$400 billion and influence many other investors (depending on the issue in focus at the time).

ICCR has 300-plus institutional investor members, many (but not all) are faith-based organizations. A good number of member institutions are leaders in making available sustainable & responsible investment products and services. (See representative names in references at end.)

Key issues in focus for ICC members include:

  • Human Rights (key: human trafficking, forced labor, fair hiring practices)
  • Corporate Governance (board independence, CEO comp, lobbying)
  • Health (pharma pricing, global health challenges)
  • Climate Change (science-based GhG reduction targets)
  • Financial Services (risk management for financial institutions, responsible lending)
  • Food (antibiotics in food production, food waste, labor)
  • Water (access, corporate use of water and pollution)

HUMAN RIGHTS IN FOCUS FOR NEW ALLIANCE

On the last issue – Human Rights – ICCR has long been involved in various Human Rights issues back to its founding in 1971 and has been organizing the Investor Alliance for Human Rights since late-fall 2017.  Here are the essentials:

  • Investor Alliance participants will have an effective “Collective Action Platform” for convening, information sharing, and organizing collaboration on action to make the case to corporate decision-makers and public sector policymakers (and other stakeholders) on the need for urgency in addressing human rights issues.
  • The umbrella of a formal alliance will help individual participants to build partnerships and develop collaboration within their own universes of connections (such as NGOs, other investors, community-based organizations, trade groups, corporate leaders, multi-lateral organizations, and other institutions and enterprises).
  • Among the work to be done is the encouragement and support of building Human Rights criteria and methodology into asset owner and manager guidelines, investing protocols, models, and to integrate these in corporate engagements and proxy campaigns, as well as to guide portfolio management. (Buy/sell/hold decision-making.)
  • All of this will help to expand investor reach and influence and strengthen advocacy for best practices in Human Rights by both companies and investors. Leveraging of broader investor influence is key in this regard.

The Alliance will provide participants with a “rapid response” resource to assure that the “investor voices” are clearly heard in corporate board rooms and C-suites, in public sector leadership offices, and in media circles when there are threats posed to effective actions and reforms in Human Rights issues.

The Alliance is outreaching to NGOs, faith-based institutions, academics, media, labor unions, multi-lateral global institutions, trade and professional associations, corporate managements and boards, and of course to a wide range of asset owners and managers.

# # #

The key player at ICCR for the Alliance is David Schilling, a veteran staff member who is Senior Program Director – Human Rights & Resources. (email:  dschilling@iccr.org)

David joined ICCR in 1994 and has led initiatives on human rights in corporate operations in Africa, Asia and Latin America, often visiting factories and meeting with workers on the ground.

David is currently Chair, Advisory Board of the Global Social Compliance Program; member, International Advisory Network of the Business and Human Rights Resource Centre; member, RFK Center Compass Education Advisory Committee; UNICEF CSR Advisory Group; and, Coordinator (with ICCR member institutions) of the Bangladesh Investor Initiative (a global collaboration in support of the “Accord for Fire and Building Safety”.

# # #

ICCR stresses that it sees its work “through a social justice lens.”  For more than two decades members and staff have worked to eradicate human rights abuses in corporate operations and across global supply chains, such as forced child labor in cotton fields in Uzbekistan.

The organization has an Advisory Committee of Leaders in Business and Human Rights (formed in late-2016).  Members include representatives of Boston Common Asset Management; Shift; Landesa; The Alliance for a Greater New York; Oxfam America; Mercy Investment Services; International Corporate Accountability Roundtable; and Global Witness.

# # #

ICCR has a long history in Human Rights progress.  The organization came together as a committee of the mainstream Protestant denominations under the  umbrella in 1971 to organize opposition to the policies and practices of “Apartheid” in South Africa.

Over time, the U.S. corporations operating in South Africa stopped operations there.  More than 200 cities and municipalities in the United States of America adopted anti-Apartheid policies, many ending their business with companies operating in South Africa.

Protests were staged in many cities and on many college & university campuses, and U.S. and European media presented numerous news and feature presentations on the issue.

In time, the government of South Africa dismantled Apartheid and the country opened the door to broader democratic practices (the majority black population was formerly prohibited to vote).

Over the years since the Apartheid campaign, ICCR broadened its focus to wage campaigns in other societal issues, including:

  • Focus on fair and responsible lending, including sub-prime lending and payroll lending.
  • Putting climate change issues on the agenda for dialogue with corporations, including the demand for action and planning, and then greater disclosure on efforts to curb GHG emissions.
  • Encouraging investment in local communities to create opportunities in affordable housing, job development, training, and related areas.
  • Promoting greater access to medicines, including drugs for treatment of AIDS in Africa, and affordable pricing in the United States.
  • Promoting “Impact Investing” – for reasonable ROI as well as beneficial outcomes for society through investments.
  • Promoting Islamic Finance.
  • On the corporate front, requesting greater transparency around lobbying by companies to influence climate change, healthcare and financial reforms, both directly and through trade associations and other third-party organizations.
  • Opposing “virtual-only” annual corporate meetings that prevent in –person interaction for shareholders.

Proxy Campaigns – Governance in Focus:

ICCR members are very active at proxy voting time.  Among the “wins” in 2017:

  • Getting roles of (combined) Chair & CEO split – 47% support of the votes for that at Express Scripts and 43% at Johnson & Johnson; 39% at Chevron.
  • More disclosure on lobbying expenditures – 42% support at Royal Bank of Canada and 41% at First Energy; 35% at Cisco and 25% at IBM.

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Notes and References:

Information on the new Alliance is at: http://iccr.org/iccr-launches-new-alliance-amplify-global-investor-influence-human-rights

ICCR’s web site is at: www.iccr.org

And at http://iccr.org/our-issues/human-rights/investor-alliance-human-rights

The Alliance initiative is supported with funding from Humanity United and Open Society Foundations.

Influence and Reach:  The ICCR member organizations include the AFSCME union fund, Walden Asset Management, Boston Common Asset Management, Oxfam, The Maryknoll Fathers and Brothers, and Maryknoll Sisters, American Baptist Churches, Mercy Investments, Christian Brothers Investment Services (CBIS), Wespath Investment Management, Everence Financial, Domini Social Investments, Church of England Ethical Investment Advisory Group, Gabelli Funds, Trillium Asset Management, Calvert Group, Clean Yield, The Nathan Cummings Foundation, and other institutional investors.

 

 

 

 

 

The Media – And Sustainability & CR Thought Leadership, For Both Topic-Focused and Mainstream Media Coverage

by Hank Boerner – Chair, G&A Institute

The “media” that we choose to get our news, commentary, research results, even crossword puzzles, movie reviews, the latest scientific papers and maybe information about what our friends are up to (such as “social media”) are usually self-selected.  

We tune in to what we want to read or watch or listen to…for information / education / entertainment…and it also helps to define us in many ways.

So here at G&A Institute as we broadly monitor for content related to both our day-to-day and long-term focus areas (the list of topics and issues is long), when we see these things pop up in “not-the-usual places,” we are cheered.

This weekend, for example, we picked up on the following, which were encouraging in that senior management publications are read beyond the folks involved in sustainable investing and corporate sustainability or ESG issues and topics.

In Focus:   MIT Sloan Management Review

This is the publication of the prestigious Massachusetts Institute of Technology’s MIT Sloan School of Management.  “Share Your Long-Term Thinking” was one feature article. Companies need to be more forthcoming about their strategies for long-term value creation when they communicate with investors — especially about ESG issues, write authors Tim Youmans and Brian Tomlinson.

Their observation is that over the past five years, CEOs have faced mounting pressure to produce short-term profits. CEOs do think about the long-term, have long-term plans (detailed and extensive) and these typically are closely held.  Result: corporate strategy and practice are not captured in investor communications.

They then offer six reasons why long-term plans should be disclose and how to do that.  One of these is to help investors understand ESG issues through the eyes of management — because a majority of investors see ESG factors as financially material and expect sound management of material ESG factors to deliver better performance over the long-term. 

Tim Youmans is engagement director for Hermes Equity Ownership Services and Brian Tomlinson is research director for the Strategic Investor Initiative at CECP.

They conclude for the magazine’s audience (aimed at corporate executives and senior managements in the main): “The long-term plan is a new tool in the regular sequence of periodic corporate-shareholder communications and represents an unprecedented opportunity for leading companies and investor together to drive sustainable value creation and help to clarify the role of the corporation in a sustainable society.”

That is not all for the MIT Sloan Management Review audience in the Spring 2008 issue.

“Why Companies Should Report Financial Risks From Climate Change” is another feature — this from Robert Eccles and Michael Krzus.  They  focused on the Financial Stability Board’s Task Force on Climate-related Disclosures [recommendations].

“Investors and the rest of the world is watching to see how companies will respond to the TFCD recommendations” — the ask here is that company managements will expand their disclosure to report on the risks and opportunities inherent in climate change in such documents as the 10-k.

Boston Common Asset Management LLC and ShareAction organized a campaign with institutions representing US$1.5 trillion in AUM participating to pressure financial institutions (especially banks) to implement the recommendations.

Companies should follow the recommendations, authors Eccles and Krzus argue, because this could lead to evolving better strategies to adapt to climate change — and be able to explain these strategic moves to the their investors.

They focus on the oil and gas industry, looking at disclosures in 2016 by 15 of the largest industry firms listed on the NYSE.  A few have made good progress in adhering to the TCFD recommendations (so there is not a “blank slate”); there is work to be done by all of the companies in enhancing their disclosures to meet the four top recommendations (in governance, strategy, risk management and metrics and targets areas).

Their article is an excellent summation of the challenges and opportunities presented for such companies as BP, Chevron, ExxonMobil, Sinopec, Statoil, Total, and others in oil & gas.

Bob Eccles is a well-known expert in corporate sustainability and sustainable investing and is visiting professor at Said Business School at the University of Oxford. Mike Krzus is an independent consultant and researcher and was a Fellow of G&A Institute.

Wait, there’s more!

The magazine’s columnists had important things to say as well.

Kimberly Whitler and Deborah Henretta penned “Why the Influence of Women on Boards Still Lags,” applauding the rise of the number of women on boards and offering two important criticisms — the growth rate is slowing and boards do that do have female members often limit their influence.

Although there are measurable positive results of female board inclusion — they cite Return on Equity averaging 53% higher in the top quartile than in the bottom — women still are not making more rapid inroads with fewer reaching the most influential board leadership positions, even with more women on boards than 10 years ago.

The authors set out ways for making more progress in board rooms.  And they advise: “For real, lasting change that wins companies the full benefits of gender-diverse decision-making, boards need to look beyond inclusion — and toward influence.”

Kimberly Whitler is assistant professor of business adminstration at the University of Virginia’s Darden School of Business; Deborah Henretta is an independent board director on the boards of Dow Corning, Meritage Homes Corp, NiScource Inc and Staples (she was a Proctor & Gamble executive).

There is much more for executives and board members in the issue, which has the overall theme of: “In Search of Strategic Agility – discover a better way to turn strategy into results.”

The content we outlined here is powerful stuff (our own technical term) to crank into corporate strategy-setting, and savvy execs are doing just that, as we see here at G&A as we pour through the more than 1,500 corporate reports we analyze each year with titles such as Corporate Sustainability, Corporate Responsibility, Corporate Citizenship, Corporate Environmental Sustainability, and more.

And so it is very encouraging when we wander beyond the beaten path of reading the reliable staple of sustainability-oriented and CSR-oriented media to see what the senior management thought leadership media are doing!

We recommend that you read through the Spring 2018 Strategy magazine from MIT Sloan.  Link: https://sloanreview.mit.edu/

We’re a Long Way from NYC’s Stonewall Inn, But Still a Ways to Go for Corporate LGBT Policies, Says Investor Coalition

by Hank Boerner – Chairman, G&A Institute

We’ve come a long way since the gay & lesbian communities mobilized and began in earnest their civil rights campaigns of the 1970s and 1980s and into the1990s. It was the New York City Police Department’s wrongheaded “raid” on the Stonewall Inn in Greenwich Village neighborhood in June 1969 that provided the important spark for the long-term, winning campaign by LGBT community for equal rights and equal protection under the laws of the land. “Stonewall” became a rallying cry for the next installment of the continuing “journey” of the civil rights movement in the United States.

The 1960s/1970s were the era of civil rights protests — we were involved in or witnessed and were affected by the civil rights / voting rights movement; the counter-culture “revolution” (remember the hippies?); the drive for adoption of the ERA (Equal Rights Amendment to the Constitution); and the anti-war movement protests against the conflict in Vietnam.  These were catalysts as well for the LGBT equal rights warriors of the decades that followed the 1969 Stonewall protests.

Finally, in recent years, after years of campaigning by LGBT advocates, most states have been adopting protective measures to protect the LGBT community.  Same gender marriage is a reality in many U.S. jurisdictions.

On November 7, 2014 The New York Times carried an update — it was a “milestone year” for LGBT rights advocates, the publication explained.  Voters in the 3Ms — Maine, Maryland and Minnesota – favored same-sex marriage; the first openly-gay US Senator (Tammy Baldwin) was elected by Wisconsin voters.

Still, there was vocal and often fierce opposition to same-sex marriage and equal protection under the law for LGBT citizens.

About LGBT Policies and the US Corporate Community

Many large companies (estimate:70 companies in the S&P 500 Index to date) have adopted non-discrimination policies to protect LGBT employees in the United States, says the 2014 Corporate Equality Index (a national benchmarking tool of the Human Rights Campaign).

We see these policies and programs for inclusion described in the many sustainability and responsibility reports we examine as exclusive data partner for the Global Reporting Initiative (GRI) for the United States of America.

Still, legal protections for LGBT citizens are not sufficient in numerous US jurisdictions. “Homophobic” policies and attitudes still reign in too many US cities and states and local communities.

And policies, attitudes, practices in other countries?  Well, that’s really a problem, say sustainable & responsible investment advocates — and steps are being taken to address the situation.

The S&R investment advocacy campaign is focused on the LGBT employees of US firms working overseas.  In countries like Russia, one of the world’s largest industrial economies, which has harsh anti-LGBT policies. The US investor group points out that 79 countries consider same sex relationships illegal; 66 countries provide “some” protection at least in the workplace; and in some countries, homosexuality is punishable by death.

In a business environment that continues to globalize in every aspect, with American large-cap companies operating everywhere, the investor coalition is calling on US companies to extend their LGBT policies on anti-discrimination and equal benefits policies to employees outside the United States. A letter was sent by the coalition to about 70 large-cap companies (the signatories manage US$210 billion in assets.

Shelley Alpern, Director Social Research & Shareholder Advocacy at Clean Yield Asset Management explains: “Today, most leading U.S. corporations now have equitable policies on their books for their [American-based] LGBT employees. Ther’s a dearth of information on how many extend policies outside of the U.S. In starting this dialogue, we hope to identify best practices and start to encourage all companies to adopt them.”

The objective of the shareowner advocacy campaign is to stimulate interest in the issue and create a broad dialogue that leads to greater protection of LGBT employees of US companies operating outside of the United States.

Mari Schwartzer, coordinator of shareholder advocacy at NorthStar Asset Management compliments US firms with effective non-discrimination policies and states:  “While we are pleased that so many companies have adopted non-discrimination policies in the USA which incorporate equal protections for LGBT employees, the next phase of implementation is upon us — we must ensure that international employees are receiving equal benefits and are adequately protected.  Particularly those stationed in regions hostile to LGBT individuals…”

Signatories of the letters sent to companies include these sustainable & responsible investing advocates:  Calvert Investments; Jantz Management; Miller/Howard Investments; Office of the Comptroller of New York City; Pax World Management; Sustainability Group/Loring, Wolcott & Coolidge; Trillium Asset Management; Unitarian Universalist Association; Walden Asset Management; Zevin Asset management.

Companies contacted include:  Aetna, AIG, Allstate, Altria, Amazon, American Express, Apple, AT&T, Bank of America, Baxter, Best Buy, Boeing, Cardinal health, Caterpillar, Chevron, Cisco, Citigroup, Coca Cola, Colgate Palmolive, Costco, CVS Health, Delta, Dow Chemical, DuPoint, EMC, FedEx, Ford Motor, General Electric, General Dynamics, General Motors, Goldman Sachs, Google, HP, Home Depot, Honeywell, Human, IBM Ingram Micro, Intel, J&J, JPMorgan Chase, Lockheed Martin, McDonalds, McKesson, Merck, MetLife, Microsoft, Morgan Stanley, Oracle, PepsiCo, Pfizer, P&G, Prudential, Sears, Sprint, Starbucks, Target, Texas Instruments, United Continental, United HealthGroup, United Technologies, UPS, Verizon, Visa, Walgreen, Walt Disney, Walmart, Wellpoint, Wells Fargo.

Summing up the heart of the issue for investors (and corporate employees):  “Corporations must take the extra step to ensure consistent application of LGBT-inclusive workplace policies throughout their operations, regardless of location,” said Wendy Holding, Partner, the Sustainability Group of Loring, Wolcott & Coolidge.

Pension Fund Activists Focus on Climate Change, Diversity, Director Nomination Process — with New York City Funds in the Lead

by Hank Boerner– Chairman, G&A Institute

Leading and influential activists in the sustainable & responsible investment community are focusing on the filing of their 2015 corporate proxy ballots with ESG issues top-of-mind. Let’s take a look at the actions of the New York City (5) pension funds (with US$160 billion in Assets Under Management).

The city comptroller, Scott M. Stringer, was elected in November 2013, along with the new high-visibility mayor (Bill DeBlasio).  Under Comptroller Stringer’s direction, the fund(s) are filing proxy proposals with 75 companies to demand a greater voice in the nomination of boards of directors.  This is the characterized as “giving shareowners a true voice in how boards are elected.” .

This campaign is designed to roll out proxy access demands across the broad public company universe in the United States.  Back in the 1800s, one of the corrupt big city political bosses was William M. “Boss” Tweed.  Said Comptroller Stringer:  “The current ]corporate] election procedures would make Boss Tweed blush. We are seeing to change the market by having more meaningful director elections through proxy access, which will make boards more responsive to shareowners.  We expect to see better long-term performance across our portfolio…”

(As local point of reference, Boss Tweed of Tammany Hall was a member of Congress and director of the Erie Railroad Company and 10th National Bank.  He was convicted of corruption and died in jail in 1878.  His name is synonymous with corruption, cronyism, political back slapping.)

The NYC comptroller serves as investment advisor to, and custodian and trustee of the 5 funds, which are for city employee beneficiaries — teachers, police, fire department, board of education, city employees.

Proxy access” is the ability for owners to nominate directors in addition to — or in opposition to — the company’s slate of directors (in the proxy statement).  Comptroller Stringer wants to give shareholders with (1) 3% of shares and (2) holding the shares for 3 years the “threshold” of being able to nominate candidates for board service, up to (3) 25% of the total board membership.  Those companies not agreeing to the proposal received the NYC fund ballot initiative.

And big corporate names are involved; the resolutions are being filed at:

  • 33 carbon intensive coal, oil & gas, and utility companies (such as Duke Energy, ExxonMobil, Chevron, Apache, AEP (power), Southwestern Energy, ConocoPhilipps, Peabody Energy);
  • 24 companies with few / or no women on the board, and “little or no” racial or ethnic diversity – including eBay, Priceline, Level 3 Communications, Urban Outfitters, Alexion Pharma;
  • 25 companies that received “significant” opposition to 2014 shareholder votes (advisory, not binding) on their executive compensation plans.

In focus: :”Zombie directors”  – of 41 corporate directors receiving less than a majority vote in 2013, 40 remain on their boards.  As Comptroller Stringer described them, “unelected, but still serving…

“This is all part of what the pension fund leaders call their “Boardroom Accountability Project,” designed to call attention to as boards of directors and their perceived failure to address critical issues — climate risk, excessive compensation and lack of diversity in the board room.

Note that under “”plurality” voting in un-contested elections, a director who receives just one vote (his or hers counts if shares are owned) is re-elected…even if every other vote is cast against him.  The project seeks to have companies amend their bylaws to change that situation.

New York State Comptroller Tom DiNapoli was re-elected by an overwhelming statewide majority in November; he enthusiastically endorsed the city funds’ project (he is the sole trustee of the US$180 billion New York State Common Fund). He described the Board Accountability Project as a wake-up call to boards of directors to change the way business in the board room is done.

Also in support:  Anne Stausboll, CEO for California Public Employees Retirement System (CalPERS) — the nation’s largest public employee pension fund with US$ 300 billion in AUM.

Her colleague, Anne Sheehan, corporate governance director at the California State Teachers Retirement System (CalSTRS) termed the board accountability project “long overdue for our country,” voicing her support.  The fund has US$186 billion AUM.

This is not just a “New York City” liberal-leaning thing — voicing support for the project were other public sector fiduciaries:

  • William R. Atwood, executive director of the Illinois State Board of Investment. (US$5 billion AUM)
  • Francis X. Bielli, executive director of the Philadelphia Board of Pensions & Retirement.   (US$4.5 billion AUM)
  • Travis Williams, chairman of the Firefighters Pension System of Kansas City, Missouri (US$460 million AUM)
  • Alex Fernandez, chairman of the Miami (Florida) Firefighters Relief and Pension Fund.( US$1.5 billion AUM)

Comptroller Scott Singer explained that the U.S. Securities & Exchange Commission (SEC) first proposed “universal proxy access” (for all shareholders) back in 2003 as a “way to end the Imperial CEO,” as Enron, WorldCom and other large-caps imploded and many went out of business.  In 2010, the SEC approved a universal policy access rule in response to the financial crisis.” In a federal district court case, the rule was set aside; the SEC still allows “private ordering,” the ability for shareowners such as pension funds to file resolutions to be placed on the annual voting ballot.

And so the battle lines are being drawn for 2015 corporate engagements.  Many of the public companies named by New York City funds are seen as leaders in sustainability, responsibility and accountability.  The proxy resolutions would seem to state otherwise.

It will be interesting to see how the Board Accountability Project progresses, and how corporate boards and C-suites see the demands presented for greater “Corporate Democracy.”