In each issue of the Corporate Examiner, we profile an ICCR member organization and its work in corporate social responsibility. Below we spoke with Sr. Patricia Daly, OP, and Mary Beth Gallagher.
With 40 members, the Tri-State Coalition for Responsible Investment (Tri-CRI) is the largest of ICCR’s regional coalitions for responsible investment (CRIs), and has been a leading voice in ICCR since shortly after its founding. Tell us about the special dynamics of CRIs within ICCR, and the challenges and opportunities CRIs are facing.
Sr. Pat: Catholic institutions were eager to join in the interfaith effort that began as ICCR was founded, but due to the different way that Catholic institutions manage assets - with a different fund for nearly every congregation or institution - they were not poised to establish a national entity to commit to shareholder engagement. Most of the Catholic institutions gathered in regional coalitions, and then appointed delegates to ICCR.
Historically, CRIs have brought significant leadership to corporate responsibility work within ICCR, bringing capacity across the U.S., especially among women religious. In the 1970s and 1980s, when many shareholder proposals were filed, our sisters and priests might be simultaneously inside an annual meeting presenting resolutions, and outside with others demonstrating against the company. Since the shift toward working in dialogue with companies, rather than primarily filing shareholder resolutions, CRI members continue to be important stakeholders in corporate dialogues. Largely rooted in Catholic Social Teaching, we bring a faith-based perspective that asks a company to consider the dignity of each person, care of creation, solidarity with communities, and a preferential option for the poor. The CRIs primarily are structured around regional membership, so we are well-positioned to address local issues that arise related to corporate impacts within our communities.
Today we are in the midst of a shift in the Catholic Church in the U.S. that has seen fewer women and men entering religious life. This diminishment of religious congregations has impacted the capacity of Catholic congregations to carry out corporate responsibility work, leading to the closure of a number of CRIs. Together, we must recognize this important turning point and identify ways to ensure the sustainability and viability of this important voice for justice. At Tri-State CRI, we view this as an opportunity to intentionally mentor new voices and lay people who bring a new level of expertise to our work and continue to integrate Catholic Social Teaching into corporate responsibility engagement.
For 40 years, Tri-State CRI has led engagements across nearly all ICCR priority programs. Talk to us about the institutional priorities of your coalition members and how that informs your engagement strategies.
Mary Beth: Each congregation in our membership has institutional priorities that direct their justice work, but there are several themes that unite this commitment: respect for human dignity, preferential options for the poor, and care of creation. This manifests with a commitment to mitigate climate change, address justice issues in the financial services sector, and take on the broader challenges of trafficked labor in global supply chains. We pride ourselves in being at the vanguard of justice issues and encouraging companies to continue to do more to address them. We are currently focused on the work to encourage ethical recruitment in various supply chains, seeing this as a priority for furthering human rights. We also see the interconnection of many of these justice issues and continue to devote energy to sustainable agriculture, the human right to water, over-speculation in the commodities markets, and access to healthcare.
Our commitment to active ownership and socially responsible investing extends to our proxy voting service, which enables our members and other clients from among ICCR to maintain voting that is consistent with their justice priorities.
Tri-Cri is known for its enduring engagements with a number of companies, including ADM, ExxonMobil, General Electric, and Ford. Can you speak to the value of sustained engagement?
Sr. Pat: We believe strongly that we are collaborative partners with corporations. This is not to say the work is easy or moves forward in a linear fashion the way we might like. We have consciously looked at our work with companies as building relationships and working with individuals within corporations, and over the years have been grateful to form many strong bonds. About 10 years ago one colleague observed: “I get it now, you people aren’t going away. You understand how this business needs to operate in the next 20 years and every year there’s another high bar and issues that you challenge us with.”
We believe it is important to stay at the table and challenge companies to do more to address the social and environmental impacts of their business models. Through this sustained engagement, we have seen many companies demonstrate leadership that continues to set a new standard and drive changes in supply chains. There are a few noteworthy examples that stand out from our history of engagement. Ford Motor Company took significant steps to position itself as the first company to report on its climate risk and the first to set GHG reduction goals. These early steps helped catalyze action across the automotive industry. In another example, after years of engagement, in 2014 ADM adopted a human rights policy that it is implementing through its global supply chain to eliminate the use of recruitment fees. As one of three global commodity processers, this will have ripple effects throughout the agricultural industry to support protection of human rights.
Even among the laggards we see subtle progress, but here it is perhaps most important to continue to raise the questions. Corporate intransigence can have many causes, yet by remaining a voice for a more just and sustainable path forward, we can become partners when companies are ready to accept our steady call for new direction.
This is not to say we are always satisfied with the progress. We have worked with ExxonMobil for over 20 years, recognizing that its role is significant and its influence is strong. Our engagement has evolved over the years, originally focusing on the substance of climate science, then its role in funding many tiers of the disinformation campaign that stalled climate policy for decades. We knew the company needed to do more within its own business, so we focused on asking it to set targets to reduce its greenhouse gas (GHG) emissions. For many years we filed shareholder proposals and have seen the company take small steps to improve its operational efficiency, but ExxonMobil has not set goals and continues to focus on fossil fuel-based energy sources.
It has been frustrating, actually infuriating, in this past year to realize that ExxonMobil’s research and disinformation efforts extend to the 1990s. It is appropriate that ExxonMobil should be under investigation by several Attorneys General. This revelation, the timing of Pope Francis’ Encyclical Laudato Si’, and the Paris Climate Agreement, moved us to file a resolution on the moral imperative of limiting global warming to 2 degrees Celsius. ICCR members long ago established the business case for addressing climate change. After 45 years, this might be the first ICCR resolution that actually uses moral language to shine the light on what the company must do to be part of the solution to global climate change.
Transitioning to a low-carbon future will take careful planning and substantial investment. Can you discuss your efforts to facilitate investment in green energy? How can the responsible investment community help facilitate the necessary capital flows?
Mary Beth: The investment world has already started to respond to the incredible challenge of financing a low-carbon economy, and Tri-State CRI has worked to support both our CRI and ICCR members as they explore opportunities in climate finance. We believe we must direct investments to communities that need it most. We seek climate finance opportunities that serve indigenous communities, low-lying populations, and poor people who are least responsible for climate change and who are already bearing the greatest burdens. The investment products to meet these goals will take time to develop, but they are critical to the mix that is already emerging.
Tri-State CRI has focused on capacity and knowledge-building to facilitate greater investment in these climate solutions. This has manifested through events like the climate finance roundtable held at ICCR in 2015, smaller events with speakers for our members, and the development of targeted resources. We also work closely with investors to help them make the case for climate finance with their investment committees and to develop a process for implementation of climate finance commitments. This approach has sought to address a number of barriers and priorities that institutional investors face in allocating capital to climate solutions, not least of which is ensuring that these resources are going to communities most in need
*Note: Atid Kimelman, above, worked as a Program Associate for Tri-CRI from 2014 to 2016, where he focused on climate change, proxy voting, and provided support for the coalition's work around water, food, and human rights.
ICCR wishes to acknowledge Atid’s many contributions to the coalition’s work over the past two years and also wishes him well as he enters Georgetown Law School this fall.