2024 Northwest Coalition for Responsible Investment Annual Report
Northwest Coalition for Responsible Investment Rising Together for 30 Years
Annual Report 2024 | NWCRI - A program of the Intercommunity Peace & Justice Center
Northwest Coalition for Responsible Investments (NWCRI) celebrates its 30th anniversary of faith-based shareholder advocacy calling for corporations to align their practices with the values of justice, the inherent dignity of all people, a just economic transition, a sustainable environmental future, and responsible governance. Shareholder advocacy is a tool for social change grounded in the belief that the economy must work for the common good and the planet must be preserved for future generations. We rise together to bring the voices of marginalized and impacted communities to curtail and hold accountable harmful corporate behavior.
Another tool for social change is regulation and policy changes. In this year, an unprecedented year of national elections, when 60 nations with almost 50% of the world’s population are holding elections, voters will play a crucial role in effecting policies. As we face the worsening existential threats of climate change, widening inequalities, and rising authoritarianism, our vote is more consequential than ever. This November shareholders and impacted communities will have their chance to affect Environmental Social Governance (ESG) policies with national and global implications through their vote.
that have no generic competitors. According to the Biden administration, the first ten negotiated drugs whose prices range from $517 to $14,934 for a 30-day supply account for more than 20% of Medicare’s Part D total annual expenditure. Pharmaceutical Companies along with the US Chamber of Commerce of Ohio have sued in federal courts, challenging the constitutionality of the law giving Medicare the ability to negotiate prices. Thirty institutional investors sent letters challenging these Pharma companies for opposing the government's attempt to negotiate prices on behalf of Medicare recipients. So far, they have lost seven such challenges. The negotiated reduction of list price ranging from 38% -79% will go in effect in 2025.
Since its inception NWCRI along with ICCR colleagues, motivated by moral, ethical, and faith values, have engaged companies to bring the voices of impacted communities and people on the margins to the corporate table.
Over the last 30 years the coalition has brought over 1260 resolutions to more than 110 Corporations!
NWCRI and the Interfaith Center on Corporate Responsibility (ICCR) have engaged pharmaceutical companies for years on increasing access to their products to reduce harm, improve outcomes, diminish the regulatory and reputational risk posed by increasing high drug prices that limit equitable access and affordable medicines. According to a 2023 poll 30% of Americans do not take their medications as prescribed due to cost.1 In 2022, the Inflation Reduction Act (IRA) enabled the US government to negotiate on commonly used expensive Medicare drugs 1. https://bit.ly/public-opinion-prescription-drugs-and-prices
This year, NWCRI brought 15 justice issues to the boardrooms of 37 Corporations, filed 41 shareholder resolutions, and participated in over 40 dialogues. We engaged corporations on issues ranging from the right to healthcare and affordability of medicine, living wages, workers and children rights throughout the supply chain, online child safety, externalization of the cost of gun violence, indigenous rights, and environmental justice. In the subsequent pages are a few highlights!
NWCRI is a member of ICCR, a coalition of 300 faith-based and value-based investors challenging companies to mitigate the risks of any adverse social and environmental impacts. Shareholders continue to engage corporations in a number of focus areas including climate change, gender and racial equity, human/worker rights, environment, lobbying/political spending, and health equity and governance. The overall number of resolutions filed decreased except for lobbying/political spending, human/worker rights, and environmental related proposals. Climate change continues to be the highest priority followed by Diversity, Equity, and Inclusion and human/work rights.
The filing of a shareholder resolution at a company will prompt them to reach out to negotiate for a withdrawal.
ICCR 2024 Filings Across Issues
THE YEAR BY THE NUMBERS:
399 Resolution filed
84 proposals withdrawn for an agreement
56% of agreements were related to climate change, racial equity, and human/worker rights
44% Health equity - issue with highest share of agreement
57% of all proposals went to a vote
109 proposals garnered a notable shareholder support (>20%)
9% proposals successfully challenged by companies
<2% of investors support anti-ESG proposals
2024 NWCRI Proposals filed FILINGS ACROSS ISSUES
Health Equity
For a long time, NWCRI and ICCR have been engaging Pharmaceutical Companies to make their life saving innovations more equitable, accessible, and affordable to people who need them. Companies say they believe access to health is a human right. Investors argue that the current business model of the pharmaceutical sector in many instances prioritizes profitability above patient health, including the practice of filing numerous subsequent patents to block cheaper generic versions from entering the market. Moreover, these practices make companies more likely to be singled out for reputational and regulatory risk. Case in point, when the Inflation Reduction Act (IRA), for the first time, allowed the government to negotiate on commonly used Medicare drugs with no generic competitor, of the first ten drugs singled out for negotiations for the first round, three were made by Johnson & Johnson (J&J) and one by Merck. This year, NWCRI co-filed resolutions with five drug manufacturing companies asking for more transparency regarding their patenting process. The four proposls filed at Gilead, J&J, Merck & Pfizer were withdrawn after agreeing to increased disclosure of their patenting strategy. The shareholder proposal at AbbVie, identified as one of the worst perpetrators of this practice, received a solid vote of 25%, ~5% less than last year.
J&J generic version of TB drug Bedaquiline in 134 countries
Shareholders have engaged J&J on lowering the cost of HIV/AIS & MDR-TB drugs in the global south for decades. Although Tuberculosis (TB) occurs throughout the world over 80% of new cases and deaths, from this curable disease, occur in 30 low- and middle-income countries (LMICs). According to the World Health Organization (WHO), in 2022, an estimated 10.6 million people developed TB, and 1.3 million people succumbed to the ailment. J&J’s drug, Sirturo, is a shorter course and better tolerated treatment for TB. As the primary patent was ending, J&J sought to block generics from entering the market internationally by filing secondary patents. However, the rising pressure from TB patient advocates and civil society like Doctors Without Borders along with the rejection of secondary patents by state governments (India) resulted in J&J announcing they would not enforce patents on Bedaquiline (Sirturo) for 134 LMICs. Companies competing to make generics resulted in a ~50% decrease in price of Bedaquiline.
Non-sugar sweeteners
A new investor proposal was filed at Coca Cola and PepsiCo focused on the adverse health effects linked to their non-sugar sweetened beverages. Non-sugar sweeteners, like Aspartame have been shown to be ineffective at maintaining weight loss and may be associated with increased risk of diabetes, heart disease, stroke, and death. Moreover, last year the WHO listed Aspartame as “possibly a carcinogenic”. A crosscutting concern is that these products are disproportionately advertised in Black and Hispanic communities that already have a higher burden of the aforementioned diseases. These proposals garnered 10.7% and 11.5% of the votes, respectively.
Equitable Global Supply Chain
The use of illegal child labor in US Companies’ local and global supply chains persists. In fact, since 2021, at least 30 states have introduced or passed bills to weaken child labor protections due to the tightening labor market. At the same time, a record number of unaccompanied minors crossed the southern border (~400,000 between 2021–2023), the majority arriving to non-parent sponsors with the expectation to send money back home. These factors made these children vulnerable to abusive labor practices.
In 2023, The New York Times reported that a Department of Labor investigation revealed that Tyson Foods’ subcontractor, Packer Sanitation Services Inc., illegally hired 100 undocumented teens to clean meat plants using hazardous chemicals and heavy equipment during overnight shifts. A shareholder resolution filed at Tyson Foods to evaluate the effectiveness of their policies and practices in preventing child labor though their supply chain received over 12% of the shareholder votes, a majority of the non-insider vote.
One of the best ways for companies to manage their human rights risks is to conduct an independent assessment to uncover any unforeseen risk. These evaluations can help the company mitigate systemic risks by preemptively addressing, preventing, or remediating risk. Last year, media reports of Walmart suppliers using illegal child migrant and trafficked labor on fishing ships and processing plants was the impetus for shareholders filing a resolution to ask Walmart to conduct a human rights impact assessment throughout their supply chain. The resolution was supported by 11.7% of voters.
Human Rights & Worker Rights
Respect Indigenous Rights
The United Nations Declaration on the Rights of Indigenous Peoples and International Labour Organization Convention 169, are internationally recognized standards for Indigenous Peoples’ rights. These protected rights include the right to health, education, self-determination to maintain and strengthen their culture, religion, and economy, including free, prior and informed consent (FPIC) on the use of any project that impacts their land and natural resources. Both Wells Fargo and Citigroup were leading financiers of Enbridge’s Dakota Access and tar sands pipeline projects over the last decade. These projects did not respect indigenous rights including FPIC, culture, health, and religion. These violations negatively affect shareholders' value and increase litigation exposure, potential damage to the Companies’ reputation, as well as risking civil and criminal liability. Wells Fargo’s violation resulted in two cities withdrawing $3 billion in assets from the bank. Investors filed proposals asking for the banks to report on the policies and practices of the companies or projects that they finance regarding
respecting internationally recognized human rights standards for Indigenous Peoples. The resolutions garnered 24% and 26% of the investor support at Wells Fargo and Citigroup, respectively.
Human Rights Due Diligence (HRDD)
An independent evaluation of human rights due diligence introduces more accountability beyond written policies and laws. The process enables companies to preemptively identify, prevent, and/or remedy human rights violations thereby reducing reputational, financial, and/or legal risk. This year we filed due diligence resolutions at Chevron, Eli Lily, Bristol Myers Squibb, and Amazon.
Chevron is the second largest US oil company and operates in 180 countries. An independent 2021 report examining 70 lawsuits against Chevron found that 65% of the cases involved documented claims of severe human rights abuses including: torture, forced labor, rape, murder, and genocide. Impacted communities in the US and globally assert Chevron operations have failed to remediate oil spills, violated environmental protection laws, and fueled local conflict.2 Shareholders asked for the public disclosure of an independent report on HRDD which received 22% of the vote.
Eli Lilly’s code of conduct and supply chain principles policies only apply to its suppliers and do not reference any internationally recognized human rights standards. Moreover, these policies do not apply to Lilly’s own business and operations. An Investor proposal was filed to urge the company to adopt a more comprehensive human rights policy that includes the right to health and outlines a process to address human rights impacts. The proposal received 10% of the vote. A similar resolution filed at Bristol Myers Squibb was withdrawn for an agreement to produce a HRDD process.
Amazon products like Ring and Rekognition utilize a face comparison feature, while they are not supposed to be used for criminal investigations they are still used by police in undisclosed ways. In addition, Amazon is known to serve governmental customers with histories of human rights abuses and its product Ring continues to infringe on citizens’ privacy. Investors’ proposal asking the company to asses if customers’ use of its products and services contribute to human rights violations garnered almost 17% investor support.
At the start of the Ukraine-Russia war in 2022 420 Companies suspended operations in or exited from Russia. Mondelez, one of the largest snack companies in the world, not only continued its operations but aided Russia by increasing its business, generating $173 million in taxes and participating in the mandatory draft of its workers for the war effort. Investors want the company to assess the effective implementation of its Human Rights Policy during the Russia/Ukraine war. The shareholder resolution had strong investor support at 31.4%.
Gun Violence
The lethal nature of gun manufacturer's products expose Strum Ruger and Smith & Wesson to increased human rights risk. Over several years shareholders have engaged Sturm Ruger to reconsider the negative effect of advertising, manufacturing, and selling of products that contribute to a violent world. Despite shareholders’ deep concern demonstrated by a supermajority vote on the Human Right Impact Assessment (HRIA) proposal two years ago, Sturm Ruger refuses to evaluate the societal cost of its products. This year’s investor proposal, to assess the public health cost of their business model, was challenged at the SEC forcing the withdrawal of the resolution for continued dialogue. At Smith & Wesson, shareholders refiled the HRIA proposals which fared better in 2024 receiving 30% of the investor vote.
Living Wage Disclosure
According to The Investment Integration Project, high levels of income inequality are a systemic risk for investors because “income inequality slows economic growth, limits upward mobility, and exacerbates political polarization—threatening investments in all asset classes.” The buying power of low-wage earners has been decreasing in the last 50 years. For instance, when adjusted for inflation, the 2024 federal minimum wage in the United States is over 40% lower than the minimum wage in 1970. The federal minimum wage 54 years ago was $1.60 which would be worth $13.05 in 2024 dollars, significantly more than the current federal minimum wage of $7.25. Shareholders are engaging companies to narrow the income inequality gap. As part of the living wage initiative, shareholders filed disclosure requests regarding Amazon warehouse employees and Kohl’s workers. Challenges to these resolutions by the companies at the SEC were successful on grounds of ordinary business.
Climate & Environment
Pesticide use in farms has been associated with a significant decline in pollinators and pesticide toxicity on crucial soil invertebrates has doubled in the last 20 years. Also concerning are the significant adverse health effects that pesticide exposure has on humans including increased risk of cancer and developmental defects. Unlike companies like Walmart, Costco, and Giant Eagle who have taken steps to innumerate and reduce/eliminate toxic pesticides, Target has not disclosed any metrics on pesticides used in its operations and supply chain. Investors requested this disclosure and that the Company provide plans to eliminate toxic pesticides from their value chain. The proposal was withdrawn upon an agreement in which Target will undergo an independent evaluation of its current practices and will consult with the Integrated Pest Management (IPM) Institute on best practices to reduce pesticide use and track, measure, and report on progress.
A safe, healthy, and just environment is a prerequisite for enjoying all human rights. St. James Parish located between Baton Rouge and New Orleans is home to an impoverished and predominantly Black community. The area is known as “Cancer Alley” due to high levels of cancer prevalence linked to a concentration of environmental pollutants from existing fossil fuel plants. Formosa Plastics Group –who has a history of repeated environmental and safety violations – is planning to build a plant in this over polluted and overburdened community. In support of faith-based grassroots opposition (Rise St. James) to another chemical plant, investors signed onto a letter to Bank of America, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Citigroup, Wells Fargo, and Sumitomo Mitsui Banking Corporation (SMBC) requesting they cease financing of Formosa Plastics Group and its subsidiaries.
Artificial intelligence (AI) use is becoming quite ubiquitous ranging from plain text correction to facial recognition algorithms, to breast cancer detections, to insurance claim denials. To its credit, Alphabet had AI Principles instituted across the Company as early as 2018 to provide ethical guidelines for AI development. However, after the launch of ChatGPT and the ensuing race for generative AI supremacy Alphabet’s AI policy commitments to be socially beneficial, avoid creating or enforcing bias, and to not give professional advice, have not been enforced. A shareholder proposal asked for clear board oversight over the Company's AI activities and implementation of its AI Principles. This resolution was supported by 7.4% of the vote.
Online Child Safety
Our coalition of investors have been engaging tech companies like Alphabet and Meta on online child safety, how they are reducing harm, and measuring the effectiveness of their solutions. In the same year when Alphabet and Meta, respectively, reported over 800,000 and over 22 million Child Sexual Abuse Material (CSAM) incidents, respectively, Apple only reported 160. In fact, Forbes reported that Apples’ prioritization of consumer privacy and lack of proactive attempts to detect CSAM makes Apple’s devices, streaming, and storage services “the greatest platform for distribution of child porn,” according to a former Apple executive. Investors’ resolution requesting Apple to assess how its products and services are being used to facilitate online sexual exploitation of children was withdrawn for an agreement to produce a public report.
After years of advocacy to limit dangerous firearm related content from reaching underage users, Alphabet’s video platform YouTube implemented a policy to prohibit minors from accessing firearm videos involving homemade guns, automatic weapons, and firearm accessories. Shareholders welcome the new policy and will continue to engage the Company in effective enforcement of this change. Late last year, Meta launched end-to-end encryption making detection of CSAM more difficult. We continue to engage Meta in improving the safety of children across its platforms.
Anti – ESG Pushback
From 2021-2023, the were significant anti-ESG and antiDiversity Equity and Inclusion pushes on state legislatures, the larger society, and asset managers who have outsized influence on proxy voting. Consequently the support for pro-ESG proposals by big asset managers has significantly
decreased. In 2024, despite the introduction of over 161 anti-ESG bills, only 6 passed. Moreover, over 3000 of the largest U.S. companies across 10 sectors increased their pro-ESG policies and initiatives.3 And although anti-ESG shareholder resolutions increased by two thirds, they remain unpopular with investors, garnering only 2% of the vote. This year shareholders engaged asset managers to voice strong pro-ESG advocacy.
Historically, greenhouse gas emissions proposals at ExxonMobil have garnered strong and sometimes majority shareholder support. This year Exxon filed a lawsuit against shareholders for a proposal that requested an increased pace of emissions reduction. Even after the proposal was withdrawn, Exxon continued the suit to cover litigation cost intending to intimidate investors and silence their voice. The judge dismissed the case on grounds that Exxon was no longer an injured party since the proposal was withdrawn. On the positive side, this year Exxon joined the Oil & Gas Methane Partnership 2.0 – a UN program which is the only comprehensive, measurement-based reporting framework for the oil and gas industry that improves the accuracy and transparency of methane emissions reporting.
In June, the Supreme Court overturned the decades-old doctrine of Chevron Deference which gave deference to federal agencies to write rules and regulations. Without a new congressional law this decision will likely weaken regulations and shift decision-making on safeguarding the public concerns from subject matter experts to unelected federal judges.
Health Impacts of Social Media on Youth
Recently General Surgeon Dr. Vivek Murthy issued a public warning regarding the negative mental health impact of social media on youth.
ADOLESCENTS AGES 13-17 SELF REPORT: 95% use social media platform
THE GOOD
58% reported feeling more accepted
80% reported feelingmore connected to their friends’ lives
THE BAD
46% reported feeling worse about their body image
Only 14% reported feeling better 64% reported being exposed to hate-based content
≥3 hours/day on social media is associated with poor mental health outcomes
Source: Social Media and Youth Mental Health, The U.S. Surgeon General’s Advisory, 2023
3. Diligent Market Intelligence
2023-2024 NWCRI Shareholder Activities
NWCRI members brought 15 justice issues to the boardrooms of 37 corporations, filed 41 shareholder resolutions, and participated in over 40 dialogues.
COMPANY ISSUE ACTION
Pfizer
*Resolutions filed by the Sisters of St. Francis of Philadelphia
Highlights — 30 years of Investing for Communities and the Planet.
2002 - General Electric - Shareholder dialogues and resolutions on climate change propelled the company to make energy efficiency a core business mission and plantted the seed for the creation of the Ecomagination initiative.
2005 - Dow Argo Sciences - Commits to not engineering food crops to produce pharmaceuticals.
2006 - For four years, shareholders campaigned to win healthcare reform engaging over 70 companies and winning a Security & Exchange Commission ruling that healthcare reform is a significant social policy issue. In 2010 the Affordable Care Act was signed into law.
2011 - - In the five years of shareholder engagements, the Company became a leader in access to HIV medicines in low income countries increasing its reach from 30,000 patients to 5 million. Today 16.5M people in LMIC access Gilead HIV therapy.
2013 - - Commits to source 100% certified cocoa for its products to be child labor free by 2020.
2014 - - After years of engagement, these banks end predatory payday loans to new customers and phase out loans to existing borrowers.
2016 - - One of the world’s largest agricultural processors and food ingredient providers, serving 170 Companies, adopts a human rights policy and no deforestation policy.
2018 - - Stops selling assault-style weapons, lobbied for common sense gun reform, and raised the gun purchasing age to 21.
2019 - - Stopped selling ammo for handguns and assault style weapons and called on congress to adopt common sense gun safety measures.
2017 – 2023 - Over a five-year period, Investor for Opioid & Pharmaceutical Accountability (IOPA), comprised of 67 member investors, engaged 32 opioid manufacturers, distributors, and retail pharmacies through dialogues and over 100 resolution filings regarding board governance oversight and executive compensation. Board level changes adopted by companies through these engagements include: adoption of compensation claw back policies by 17 companies, 14 published risk reports, two companies established board level oversight committees, and three companies reinforced executive accountability through pay cuts after significant shareholder support for IOPA's “vote no on executive compensation” campaigns.
NWCRI
A program of the Intercommunity Peace & Justice Center, NWCRI is a member of the Interfaith Center on Corporate Responsibility, a national coalition of over 300 faith-based investors who are Inspired by Faith, Committed to Action.
These highlights summarize the work that NWCRI has done in collaboration with ICCR during the past year.
Timnit Ghermay Director, NWCRI
Members
Adrian Dominican Sisters
Benedictine Sisters
Cottonwood, Idaho
Benedictine Sisters of Mt. Angel Congrégation des Soeurs des Saints, Noms de Jésus et de Marie Congregation of the Sisters of St. Joseph of Peace
Jesuits West
Northwest Women Religious Investment Trust
PeaceHealth
Providence St. Joseph Health Sisters of Providence, Mother Joseph Province
Sisters of St. Francis of Philadelphia
Sisters of St. Mary of Oregon
Sisters of the Holy Names of Jesus & Mary, U.S.-Ontario Province
