Marcela I. Pinilla
Director of Sustainable Investing
Download our Q4 2021 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. In the fourth quarter of 2021, we continued to use our voice to lead and support unfolding initiatives on addressing racial inequity.
Progress Update
We joined Investor Advocates for Social Justice (IASJ) in engaging Microsoft to evaluate misalignment between its lobbying activities and company values regarding artificial intelligence, public policy, human rights, and racial justice. We met with two of Microsoft’s largest shareholders, Vanguard and State Street, to make the case for our proposal, which garnered 38 percent of the vote.
We had the honor of introducing Dr. Ibram X. Kendi (NYT best-selling author and recipient of a MacArthur Fellowship) to our friends and clients in a webinar held by the Boston University Center for Antiracist Research. We recognize that we have benefited from racist systems as an investment firm and must hold ourselves accountable. It’s important to us that we support these groundbreaking efforts, learn from the leading voices in antiracism and racial justice, and promote racial equity and justice through our investments.
We continued pushing back on private prison expansion. Last year, we helped organize a successful campaign to halt Alabama’s attempt to finance private prison development through bank underwriters. However, the state’s government persists in using COVID-19 funding to expand the carceral state, rather than investing in its residents’ health and well-being. We plan to keep the pressure on the project’s lead underwriter and continue to question the incentives and profits of mass incarceration.
In Other News
At Zevin Asset Management, we are active in lending our investor support and frequently sign letters directed to companies and government offices. This year, we signed a letter to the largest proxy advisor, Institutional Investor Services (ISS). We asked ISS to go further to improve their benchmark on climate risk, to more consistently recommend votes in favor of climate-related issues, and to provide rationales that accurately reflect investor interests.
We also joined 66 institutional investors in a letter asking member companies of the Business Roundtable (BTR) to support the Build Back Better (BBB) reconciliation package. We sent letters to portfolio companies AbbVie, ADP, Alphabet, Amazon, Apple, and Verizon, urging them to actively support both this critical legislation and the bipartisan infrastructure bill. We chose to engage BRT and its members because they are well-positioned to make the business case for important issues such as a national paid leave policy.
We also supported social change by signing onto letters:
Calling on the United States Congress to pass a comprehensive and permanent federal paid family and medical leave program by the end of 2021. [1]
Promoting the rights of the people of Sudan and civil society, in support of the rule of law, accountable governance, and civic freedoms.
Pushing companies to provide inclusive insurance and benefits for reproductive and maternal health care. [2]
Questioning the maker of Ray-Ban and Oakley sunglasses, EssilorLuxottica, for using “aggressive and fear-inducing” interference tactics to prevent 2,000 employees at its facility in McDonough, Georgia from unionizing. [3]
Supporting Starbucks employees’ unionization efforts in Buffalo, New York. As of this writing, one of three stores has successfully secured union representation, making them the first-ever unionized Starbucks store. More stores are likely to vote for the union as vote disagreements are resolved.
Encouraging Chairman Gary Gensler of the U.S. Securities and Exchange Commission (SEC) to mandate the annual publication of demographic workforce data by corporations. [4]
Ensuring that the transition to a greener economy is just and equitable. [5]
Looking Ahead
Despite the ongoing pandemic, we are hopeful that meaningful progress will be made on many fronts in the year ahead. There is a broader understanding that thoughtful changes in our systems and institutions will need to be made to abate the unequal impacts of the pandemic. We remain determined in our support for this transformation, and for more inclusive and equitable systems.
Exceeding a global warming of 1.5 degrees Celsius presents risks to the global economy and investors. A warming climate is associated with supply chain disruptions, reduced resource availability, lost production, political instability, reduced worker efficiency, and adverse health impacts that disproportionally affect low-income communities and communities of color.
Zevin Asset Management continues to be active in corporate engagements, listening to advocacy organizations on the ground, and filing shareholder proposals for inclusion in the 2022 proxy season. Below are select resolutions that we have led and supported in 2021:
Tell Alphabet that their climate change commitments and lobbying activities should match. Investors and stakeholders are increasingly scrutinizing misalignment between companies’ climate commitments and policy advocacy [6]. Corporate lobbying activities that are inconsistent with the goals of the Paris Agreement present regulatory, reputational, and legal risks. Alphabet publicly supports the goals of the Paris Agreement, advocates for science-based climate policies, and leads investment in carbon-free energy. Additionally, the company recently announced a new policy “that will prohibit ads for, and monetization of, content that contradicts well-established scientific consensus around the existence and causes of climate change” [7]. However, there are discrepancies between the company’s lobbying activities and climate change policies, which led us to file a proposal seeking an assessment of these activities.
Tell UPS that it’s time to up the ante on shipping emissions. UPS has announced a goal to achieve carbon neutrality in its operations by 2050. But shareholders do not know if UPS plans on achieving net zero through emissions reductions or the purchase of carbon credits. [see our view on carbon offsets here] To assure shareholders that the company’s goals align with climate science, UPS should set a science-based target verified by the Science Based Targets initiative (SBTi), an initiative that requires annual disclosure of emissions. Given the impact of climate change and UPS’ contribution to it, we believe the company’s board and management must be more ambitious and adopt greenhouse gas emissions reduction goals aligned with the very latest scientific consensus.
Tell Verizon to make good on its commitment to diversity, equity, and inclusion (DEI). The harmful impacts of systemic racism on Black, Indigenous and People of Color (BIPOC) communities are a major focus of policymakers, governments, and civil society. While Verizon has made commitments to DEI and statements of solidarity with BIPOC communities, we believe the company can go further to address the adverse impacts of its policies, practices, and products on racial equity. We filed a resolution encouraging Verizon to audit its impact on racial equity, which could mitigate potential reputational, regulatory, license to operate, and other risks.
[1] Partnered with Interfaith Center on Corporate Responsibility (ICCR).
[2] Partnered with Rhia Ventures.
[3] Partnered with Trillium Asset Management.
[4] Coordinated by ICCR.
[5] Coordinated by ICCR.
[6] https://www.politico.com/news/2021/04/20/investors-corporate-climate-lobbying-activity-483429.
[7] https://support.google.com/google-ads/answer/11221321?hl=en.
Thanks for reading and sharing. For more on this work and our broader advocacy, visit our website, and join us on Twitter and LinkedIn. And please don’t hesitate to contact Marcela Pinilla, Zevin Asset Management’s director of sustainable investing, at marcela@zevin.com with your questions, thoughts, and suggestions.
Disclosures: Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen or experience. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. This communication may include opinions and forward-looking statements. All statements other than statements of historical fact are opinions and/or forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the beliefs and expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such beliefs and expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements. Unless stated otherwise, any mention of specific securities or investments is for hypothetical and illustrative purposes only. Zevin Asset Management’s clients may or may not hold the securities discussed in their portfolios. Zevin Asset Management makes no representations that any of the securities discussed have been or will be profitable.