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NEW YORK, NY, FRIDAY, SEPTEMBER 9TH, 2022 – On Monday, September 12 at 10:00 am ET, a group of investors will once again urge their fellow shareholders to vote in favor of a proposal requesting the development of a human rights policy at Smith & Wesson (S&W), a leading manufacturer of firearms sold to civilians.
This will mark the third time they are presenting the proposal, with prior shareholder support growing from 36% in 2019 to 44% in 2021. This year, the proponents are hoping for a majority vote.
Since last year’s annual meeting:
- Gun violence became the leading cause of death for children in the United States in 2020, the most recent year for which Centers for Disease Control and Prevention data is available;
- Smith & Wesson’s M&P15 semiautomatic rifle, an AR-15-style firearm, was used in a highly publicized mass shooting at the Highland Park, Illinois July 4th parade;
- Similar rifles made by other manufacturers were used to kill 19 children and two teachers at Robb Elementary School in Uvalde, Texas on May 24, 2022, and 10 shoppers at a Tops grocery store in Buffalo, New York just eight days earlier;
- In response to these shootings, the House Oversight Committee (“HOC”) sent letters to gun manufacturers, including S&W, seeking information about the sale and marketing of AR-15-style rifles and similar firearms and calling them to appear at a public hearing on July 27th. The CEOs of Daniel Defense and Sturm Ruger appeared, but Smith & Wesson CEO Mark Smith “abruptly withdrew” five days before the hearing without explanation;
- On August 2, HOC issued a subpoena to S&W demanding documents related to the manufacture and sale of AR-15-style rifles, including “the revenue and profits Smith & Wesson is making from AR-15-style rifles, internal analysis and assessments related to the safety of its products and marketing practices, and internal communications involving the CEO and other top executives discussing recent mass shootings carried out with the company’s weapons.”
In its exempt solicitation, the proponents argue these developments reinforce the seriousness of the risks created by S&W’s failure to systematically assess or even track the adverse impacts of its products, especially AR-15-style rifles. They argue that adopting a human rights due diligence process would allow S&W to monitor these risks more precisely and take actions to prevent potentially costly future impacts. Further, a human rights due diligence process would demonstrate to stakeholders that S&W is not callous to the harms resulting from the misuse of its products, and to legislators that it is willing to collaborate in the development of solutions to mitigate any potential harms.
Said Sr. Judy Byron of the Northwest Coalition for Responsible Investment who led the filing of the proposal, “The business case for this policy is abundantly clear and the moral case even more so. We will once again appeal to the board, management, and our fellow shareholders to support our call for S&W to confront, and not run from, the grave human rights risks it faces.”
In its statement of opposition to the proposal, management persists in putting forward two main arguments which seek to mischaracterize the proposal and mislead investors: 1) that adoption of a human rights policy would subject the company to “extra-legal liability” (financial damages beyond what is required by law), and; 2) the company’s existing policies address the requests of the proposal. In the first case, the human rights due diligence process is not legally binding in any way, nor does it lead to adjudication of fault or damages/penalties the way litigation or a government enforcement action would. In the second case, the company’s existing policies neither address nor acknowledge human rights; in fact, the tone of S&W’s policies and statements have been defiant and defensive.
Proponents say they remain hopeful the company will change its views and agree to authentically dialogue on ways it can contribute to reducing gun violence. In the meantime, they will once again make their case to S&W shareholders at Monday’s meeting in the hopes of a majority outcome on their proposal.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 51st year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs, and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.
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Proponents seek investor support for their proposal requesting a human rights impact assessment scheduled for a vote at Sturm Ruger’s annual meeting of stockholders on Wednesday, June 1st.
NEW YORK, NY, WEDNESDAY, MAY 25TH, 2022 – As our nation once again tries to process the unimaginable – a massacre at an elementary school where 21 people including 19 children, many under the age of 10, were gunned down by an 18-year old man – shareholders in Sturm Ruger ($RGR) are reiterating their call for their fellow investors to support item #4 on the proxy, calling for a third-party human rights impact assessment (HRIA).
While by no means a solution to the complex issue of gun violence, given the lethality of RGR’s firearms business, investors see due diligence around potential human rights harms as a critical first step toward preventing them. The proposal has the support of proxy advisories ISS and Glass Lewis.
Third-party HRIAs are used by companies to assess existing and potential adverse human rights impacts which can pose significant reputational, financial, and legal risks.[i] This type of assessment, particularly when conducted by a third-party auditor, can often identify issues that a company may be unaware of in its day-to-day operations–issues that a company can remediate, address or prevent once the risks are identified. While the HRIA is a non-binding document, most companies that undergo these third-party audits find them a valuable tool in a company’s risk management structure.
“Whenever someone is injured or killed by gun violence – a daily occurrence in our country – we all ask what could have been done to prevent it,” said Laura Krausa of CommonSpirit Health who filed the proposal along with fellow members of the Interfaith Center on Corporate Responsibility. “And while we all know that there are multiple factors contributing to these events, not taking every possible step to prevent them from recurring within our respective spheres of influence is an abdication of responsibility that almost ensures they will recur. This is precisely what the HRIA is meant to do.”
According to the Gun Violence Archive,[ii] there have already been over 200 mass shootings in the U.S. this year and gun violence has taken the lives of 17,201 people, including 648 children and teens. In fact, gun violence is now the leading cause of death for children and teens in our country[iii].
Said Sr. Judy Byron of the Northwest Coalition for Responsible Investment who co-filed the proposal at RGR, “That the mass shooting in Buffalo was a hate crime perpetrated by a young white supremacist with an AR he likely modified to kill as many Black people as possible is beyond chilling, and the trauma of it, the fear it has instilled in the Black community, cannot be underestimated. There is a significant opportunity for manufacturers to engage in discussions about what proactive contributions they could make to more effectively prevent harms caused by the products they sell to the public. In order to do this, they must first understand where the gaps are and where the risks are most salient.”
In its statement of opposition[iv] to the proposal, RGR claims that it is unable to track customer misuse and/or criminal use of its weapons because it sells to distributors rather than directly to consumers. Proponents argue that its indirect sales model does not shield the company from accountability for its potential human rights risks. The pharmaceutical industry, for example, does not sell its products directly to patients, yet it is accountable for any detrimental human rights impacts throughout its value chain, as Pfizer acknowledges in its human rights policy: “In line with the UN Guiding Principles on Business and Human Rights, Pfizer’s human rights policy focuses on addressing risks that could have the most severe impact on people: our patients, our colleagues, the workers of our business partners, and the communities in which we operate. Our responsibility to respect human rights extends throughout our operations, from lab to patient, including our diverse global supply chain of numerous local, third-party vendors.”[v]
Continued Krausa, “A third-party human rights impact assessment will not destroy RGR as management has argued as it isn’t legally binding, but it will reveal potential human rights threats to the business and it could save lives. Importantly, an HRIA will show the world that RGR takes seriously the human rights/civil rights risks inherent in its business and demonstrates a genuine willingness to contribute to mitigation and prevention strategies. It will demonstrate that RGR is doing what it can to prevent the next shooting and show that RGR places the lives of its customers and communities above its profits.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 51st year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs, and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.
Investors make the business and moral case for a human rights policy aligned with the UN Guiding Principles on Business and Human Rights to help curb escalating gun violence.
NEW YORK, NY – THURSDAY, SEPTEMBER 30TH, 2021 – In a prepared statement she read to present a shareholder proposal requesting the adoption of a human rights policy filed by her order, the Adrian Dominican Sisters, at this week’s Smith & Wesson annual general meeting, Sr. Judy Byron said, “Our advocacy on gun safety has been characterized by Smith & Wesson management as a ruse whose real intention is to put the company out of business and to abolish the second amendment. We have always said this is not our agenda. Again, we seek to make the business, the products and the consumers who buy them, safer. We seek – as everyone here must surely do – to save lives.”
In SEC filings made public yesterday, the shareholder vote was reported as 43.9% in favor, a clear signal that many of Byron’s fellow shareholders share her gun safety agenda. The vote exceeds the 36% support received by a similar proposal filed in 2019 and demonstrates shareholders’ mounting concern with the company’s lack of attention to the growing risks of gun violence.
The proposal asked Smith & Wesson to adopt a comprehensive human rights policy, including a description of the processes the company will use to identify, assess, prevent and mitigate adverse human rights impacts.
The link to proponent’s proxy exempt solicitation is here. The link to the 8K filings including the proposal’s vote result is here.
Proponents submitted the proposal out of concern that Smith & Wesson has no process in place to identify and analyze human rights risks in its business and operations, which is especially problematic given the lethal nature of the company’s products. The proposal asked Smith & Wesson to join leading companies such as Microsoft, Hershey, Shell, Coca-Cola and Adidas that have committed to conducting human rights due diligence in order to manage risks, minimize harm, and protect their social license to operate.
According to an exempt solicitation filed in response to the company’s opposition statement, “Smith & Wesson argues that the proposal would interfere with the company’s ‘ongoing ESG efforts’, including the Corporate Stewardship Policy, its media monitoring program, and ‘a framework for revamping [the Company’s] ESG approach’, which is now under way. That contention is undermined by the fact that none of these efforts deals with human rights.”
Said Byron, “Rather than embrace the enhanced risk management structures a human rights policy would provide, the company chooses to remain recalcitrant and hostile to any efforts to engage on gun safety. When S&W could be a leader in advancing solutions and systems to prevent the misuse of its products by consumers, it chooses instead to fight against the tide. How long will it be before it is forced to make these changes in response to gun safety legislation or the will of a majority of its shareholders?”
The 2021 shareholder proposal is the third filed by the investors who are members of the Interfaith Center on Corporate Responsibility; a 2018 proposalrequesting a report on gun safety passed with over 60% support and a proposal nearly identical to this year’s filing requesting a human rights policy received 36% support in 2019. It was re-filed in 2020 and survived a challenge at the SEC but the proponents offered to withdraw it in exchange for a conversation with management. Unfortunately, the provisions management insisted on for that conversation were so onerous the proponents felt they were left no option but to rescind the offer.
Said Byron, “The proxy process is not our preferred method of corporate engagement. In fact, we were able to convene a very cordial and productive dialogue with team members at Sturm Ruger last year. These conversations build trust and a desire to achieve a common understanding. Our invitation to Smith & Wesson management to dialogue with us in good faith and in a transparent manner remains open.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 50th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn and Facebook.
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