Pat Miguel Tomaino
Director of Socially Responsible Investing
Download a PDF of this Impact Update
At Zevin Asset Management, we build responsible investment portfolios for our clients. We then address risks and create positive social impact by engaging with portfolio companies. As the start of 2020 brought uncertainty related to the novel coronavirus outbreak, we continued challenging companies for accountability and positive change.
Coronavirus and the corporate connection
Our firm is in solidarity with vulnerable people around the world who are at risk for coronavirus and with workers and communities who are on the frontlines of the public health response. We are all gripped by rising fear and uncertainty. At the same time, we are reminded that the impacts of this public health and economic crisis will be borne disproportionately by poor people, service workers in essential but low wage jobs, and the homeless. Public health authorities around the world are telling citizens to practice physical distancing to avoid spreading the virus and to keep vulnerable people out of harm’s way. However, the groups mentioned above are less prepared to implement that basic guidance, which without changes in policy, could result in their financial ruin.
In this context, and in the absence of federal inaction, large companies have a responsibility to implement common-sense changes to help their workers and communities “stop the spread.” Extending paid sick leave for people who are exhibiting symptoms is one necessary step. However, as indicated in a recent New York Times editorial, many large US employers are failing to do this. To be sure, insufficient paid sick leave, medical leave, and family leave is a problem across the United States. In the past two years, Zevin Asset Management has successfully engaged with companies like TJX, Starbucks, and CVS to force improvements to those companies’ paid family leave benefits.
However, the Times editorial made it clear that dozens of US service-sector employers with enormous low-wage workforces fail to provide paid sick leave benefits to any employees, often leaving tens of thousands of workers without a single paid sick day:
Companies that do not pay sick workers to stay home are endangering their workers, their customers and the health of the broader public. Studies show that paying for sick employees to stay home significantly reduces the spread of the seasonal flu. There’s every reason to think it would help to check the new coronavirus, too.
In March, as the crisis ramped up in the United States, we contacted executives at the following companies held in client portfolios, urging them to clarify and improve their policies on paid sick leave:
Kroger
Starbucks
CVS Health
UPS
The Home Depot
The TJX Companies
In light of the emergency, we urged each company to make a minimum of 15 days emergency paid leave immediately available to all staff, including part-time, temporary and subcontracted workers. We also urged companies to clearly disclose their policies and explain how these policies could extend beyond the current crisis to improve overall worker safety and the health of human capital in the long term.
Home Depot responded positively, explaining that it extended an additional 80 hours of paid sick or personal time to full time employees and 40 hours for part-time employees. In another positive move, Home Depot clarified that workers will be paid if they are quarantined following COVID-19 exposure. TJX Companies (parent of TJMaxx and Marshall’s) also responded to explain their decision to close all stores for two weeks in March, maintaining pay and benefits for workers. We will continue to engage with both these companies on implementation and extending these structures into the future. This will help prepare for other potential crises and strengthen overall human capital in a way that improves morale and reduces costs associated with employee turnover in the long run.
In addition to the above rapid response, we are banding together with fellow responsible investor members of the Interfaith Center for Corporate Responsibility (ICCR) and the Human Capital Management Coalition to press companies further. We contributed to an Investor Statement on Coronavirus Response with several recommendations to companies facing important decisions in this uncertain time. Along with emphasizing the importance of paid sick leave, the statement also encourages companies to honor commitments to suppliers, which are often small and medium-sized enterprises relying on timely payment. Moreover, our statement discourages financially imprudent moves such as share buybacks and exorbitant executive compensation packages, which can harm companies’ viability and morale in times of crisis.
We will continue to look for ways to press companies on key issues such as drug discovery and fair access to medicines as well as responsible consumer credit next quarter as the fallout of coronavirus continues.
What else is new?
We joined our partners at the Investor Alliance for Human Rights to call out 95 companies that scored poorly on the 2019 Corporate Human Rights Benchmark. This means that companies have ignored key human rights risks regarding their employees, the communities they operate in, or workers in their supply chain. We expect answers and further substantive engagement by June.
Our advocacy with large asset management firms bore some fruit. We have long engaged with T. Rowe Price on the company’s proxy voting and inattention to certain climate change issues. In a step forward, T. Rowe Price wrote the SEC in January to defend asset managers’ right to vote thoughtfully on sustainability issues. BlackRock, another giant asset manager we have pushed on responsible investing, also joined the Climate Action 100+ initiative, which presses companies that emit large amounts of carbon to take action in line with the Paris Agreement. This is a first step, but BlackRock’s is a key voice.
And in another set of wins, we received word that both Microsoft and AT&T responded to our requests to participate in the Workforce Disclosure Initiative. This is a massive data collection project that encourages companies to be open and thoughtful about their approach to labor standards issues like worker benefits, scheduling, health and safety and supply chain.
Thanks for reading and sharing. For more on this work and our broader advocacy, join us on our website, Twitter, and LinkedIn. And please don’t hesitate to contact Pat Miguel Tomaino (pat@zevin.com) with your questions, thoughts, and suggestions.