Issued January 06, 2022
WASHINGTON – Today, a coalition of investors and shareholder advocates announced a sweeping set of shareholder initiatives designed to advance racial equity, protect against attacks on democracy, and promote long-term shareholder value. On the one-year anniversary of the January 6th insurrection, and following a year of harmful and risky voter suppression efforts, the coalition announced the filing of resolutions demanding that companies provide both greater transparency and oversight on corporate political spending and lobbying and conduct comprehensive racial equity audits.
“For decades, investors have sounded alarms about the threat that corporate political spending poses to our democratic institutions, as it leads to policy-making at all levels of government that often places corporate interests over the public interest,” said Nadira Narine, senior program director of the Interfaith Center on Corporate Responsibility. “The distortion of public policy has a corrupting influence on our political system and a destabilizing effect on the broader economic and cultural environment that both inhibits the long-term sustainability of businesses and threatens to unravel our social fabric. We believe this is a moment of reckoning for corporations; they should thoughtfully re-consider whether their political activities have been undermining the ideals of democracy, and the fulfillment of their social contract.”
The coalition is demanding that companies re-evaluate their policies governing lobbying, political spending and oversight to ensure they do not promote voter suppression and attacks on democracy. They also called for support for their shareholder proposals from the country's largest asset managers, which failed to adequately support such initiatives in 2021, despite public statements in favor of racial equity and protecting democracy.
“Major financial institutions and corporations like Apple are touting their commitment to advancing diversity, inclusion, and accessibility. However, the accusations of discriminatory business practices, mistreatment of employees, and disregard for individuals from marginalized communities raise serious questions about how effective these companies are in implementing their pledges. That’s why we call for an independent review,” said Dieter Waizenegger, executive director of SOC Investment Group. “Undergoing third-party civil rights and racial equity audits will ensure that board of directors and shareholders are provided the level of transparency necessary to mitigate long-term reputational risks. As shareholders, we’ll continue to demand companies like Apple take-up these audits, consult with their key stakeholders, and report annually about their progress.”
Groups also highlighted the risk posed to workers’ capital investment resulting from the misalignment of corporations’ public commitments to racial equity and their political spending.
“The events of January 6 illuminated the headline and reputational risk that investors often mention when they discuss disclosure focused proposals,” said Alphonso Mayfield, president of SEIU Florida Public Service Union. “Large asset managers should join institutional investors in calling for more transparency and disclosure because of the heightened sense of corporate accountability around the stability of our democracy and economic markets. Many corporations that made significant commitments to diversity, equity and inclusion after the murder of George Floyd continue to funnel political donations to officials working to roll back voting rights in Black and Brown communities, whose money they want to manage. This is unacceptable.”
“We’ve seen the reputational risk that racist incidents and systematic discrimination can pose to companies. But too many are taking stock after the fact—a scandal pushes a company to examine how its policies, practices, or operations, internal and external, are perpetuating white supremacy. In pushing for a racial justice or civil rights audit, investors are asking companies to be proactive instead of reactive,” said Kate Monahan, a director of shareholder advocacy at Trillium Asset Management.
“An unprecedented coalition of asset owners with over $1 trillion AUM and more than 140 of the country’s top racial justice leaders called on asset managers to uphold their fiduciary responsibilities and to use their power to work for, not against, the communities whose assets they manage, yet BlackRock, Vanguard, State Street and others continued to rubber stamp corporations’ political donations and activities that directly supported the attack on the U.S. Capitol and a wave of voter suppression bills,” said Eli Kasargod-Staub, executive director of Majority Action. “Asset managers will face a critical choice in 2022: stand up for democracy and racial justice as they previously promised, or once again fail in their duties by shielding company boards from accountability. Either way, the outcome of corporate action will be in their hands.”
The Service Employees International Union (SEIU) unites 2 million diverse members in the United States, Canada and Puerto Rico. SEIU members working in the healthcare industry, in the public sector and in property services believe in the power of joining together on the job to win higher wages and benefits and to create better communities while fighting for a more just society and an economy that works for all of us, not just corporations and the wealthy.