Annual Summary of Shareholder Activity 2015-2016


This landmark pact, in conjunction with the 2030 Agenda for Sustainable Development, holds the power to transform our world. (Ban Ki-moon, Secretary General of the United Nations)

The events of April 22 resonated with us because we not only seek to implement our chapter directives, but also work to make climate change an integral part of all our interactions and engagement with corporations. In response to Pope Francis’ Encyclical, Laudato Si, we recognize that the exceptional delicacy of nature’s balance is becoming increasingly irreversible. We have a moral responsibility to commit ourselves to actions that will lead to a more sustainable future for our planet and its most vulnerable communities.

Our Franciscan commitment to the care of creation has been bolstered by Pope Francis’ call for a radical transformation of all areas of life to confront climate change. For us, this means bringing a strong message to corporations that includes equal access to the basic needs of life: human rights, healthcare, clean water, food, shelter, and employment. Climate risk is no longer a future concern. It is a present reality. The dangerous warming of our planet is not only an issue for oil, gas, and other extractors, but also for each one of us. As Sisters of St. Francis of Philadelphia and members of the Interfaith Center on Corporate Responsibility (ICCR) and the Investor Environmental Health Network, we consider engagement with all companies vital for transformation and sustainability. We strategize and focus increased attention to the Business Standards/Vision and Values of Corporations by expressing a deep concern for the protection of workers’ rights, community rights, indigenous people, refugees, migrants, and the rights of Mother Earth. We do not have major investments in extractives, including mining, oil, gas, and lumber companies other than what we need for shareholder advocacy. Fossil fuel companies have been the focus of major resolutions on climate change and are facing a moment of reckoning. The following brief summaries give insight into our shareholder engagement for 2015-2016.


Human rights and the rights of communities continue to be a part of most dialogues since we believe in a consistent ethic of life and the inherent worth, value, and sacredness of each person. We are supported and guided in our ministry by the USCCB, and the UN Framework: “Protect, Respect and Remedy” developed by John Ruggie, the special UN representative to the United Nations.

sears-logoAnadarko, Boeing, Northrop Grumman, and Sears: During the past three years, we worked diligently with all four companies to develop a human rights policy that was more comprehensive than their business codes. All companies addressed their responsibility to implement the UN Guiding Principles as well as the Ruggie Framework, “Protect, Respect, Remedy.” Boeing revamped its website and has developed a whole new set of policies and principles that will enhance human rights. Boeing is still working on human rights impact assessments to validate their policies. Northrop Grumman has made extensive progress in policy development and will continue the dialogue for further improvements. Anadarko has developed a good policy statement but has much work to do in implementing it. Sears has developed a complete human rights policy and will now need to work on human rights impact assessments.

Kroger Co LogoKroger Company:
We filed a resolution seeking a mechanism to assess the risk of human rights violations in the company’s supply chain. A March 30 dialogue with Kroger demonstrated a new focus of auditing first tier suppliers but the company has still not developed a global human rights policy and continues to refuse to disclose specific data on the audits they perform. A follow-up call on May 9 will cover their commodity risk assessment program to see if it satisfies our requirements for withdrawal.


Climate change has become a major issue and just about every sector is being asked to report on how they are addressing the risks related to the goal of limiting global warming to 2°C. Companies are at various stages in using the assessment.

In April, Ceres, a strong sustainability organization, announced that “110 companies, including IKEA, Mars Incorporated, PG&E, Salesforce, General Mills, Kellogg Company, HP, Starbucks, and many others, signed a statement of support for the Paris Climate Agreement and urged the U.S. to do its part by swiftly implementing the Clean Power Plan, citing that failure to do so could put America’s prosperity at risk.”

 Exxon Mobil’s management called on the Securities Exchange Commission (SEC) to exclude the Tri-State Coalition for Responsible Investment resolution from the proxy statements published for the annual investor meeting. The proposal—cofiled by the Sisters of St. Francis and 33 other investors—called for the company to assert moral leadership on climate change. The resolution received a “yes” from the SEC and made it to the company’s proxy for a vote later in May. Another resolution at Exxon Mobil tells us that a definite energy transition toward a low carbon economy is underway and pressure is mounting to break free of fossil fuels.


chevronChevron Company: This is our sixth year to file a hydraulic fracturing resolution at Chevron. The company still asserts that their Operational Excellence Management System is being applied to shale gas development.  The company received certification from the Center for Sustainable Shale Development but did not provide best management practices or actual data. Since little progress was made, we were joined by 14 other shareholders to file another resolution. The resolution will be on the ballot for the annual meeting in May.  Click here to learn more.

Anadarko: The company has made significant progress in developing its human rights policy and has published the statement on the website. We’ve been urging them to look at the human right to water but there’s no consent although they have developed a water assessment tool. The dialogue/discussions continue to be productive.


general-millsGeneral Mills: In our dialogue with the company onApril 25, they were disappointed that they only moved from 11th to 10th place in the Access to Nutrition Index rankings from 2013 to 2016. The company has been reducing sugars in cereals and eliminating artificial coloring. General Mills does not offer many of their products in several developing countries but they work with organizations like Partners in Foods Solutions in Africa to provide food in needed areas. Additionally, they own Green Giant vegetables, Yoplait yogurt, and Better For You snacks which present their own unique challenges.

Kroger Company: Kroger has invested a great deal to lower prices on healthier foods. Their Simple Truth has now become a billion dollar brand. They focus mostly on clear labeling on their store brands since they have control over those products. Although they use coupons occasionally to promote healthy foods, they mostly respond to customers’ tastes. They participate in a program in the Memphis area that benefits customers who are on the SNAP program. If customers purchase fresh fruits and vegetables using SNAP dollars at a certain amount, they get an additional $10 off those purchases. It has been recognized nationally.

macdonalds-logoMcDonald’s Corporation: In our December 17 dialogue, McDonald’s revealed that they do not list obesity as a risk in their 10-K but make allusions to it by citing public health concerns. 2015 was the first year they stated nutrition goals for their portfolio. The goals are flexible enough to target different things depending on the most pressing needs in that area of the world. Although general nutrition has improved, the number of Happy Meals that meet the Children’s Food and Beverage Advertising Initiative standards is still very low.

Yum! Brands: The company has developed a robust long-term nutrition strategy. By the end of this year, 15% of menu items will be at 1/3 of required daily allowance (RDA) required by the individual country. For countries with no established RDA guidelines, YUM! products will—by 2020—provide 20% of the RDA as stated in the World Health Organizations (WHO) guidelines. In addition, 75% of KFCs are offering nonfried options. Many Pizza Hut markets offer a lower-calorie, lower-fat skinny pie. Menu balance is the key.


dow-chemical-logoDow Chemical: The Environmental Protection Agency (EPA) suspended the registration of “Enlist Duo” in November, stating that it is likely significantly more harmful than initially believed. Approved by the agency just over a year ago, Enlist Duo is a toxic combination of glyphosate and 2, 4-D that Dow AgroSciences created for use on the next generation of genetically engineered crops. In a December 15 dialogue, the company defended Enlist Duo and said the EPA had preliminary data and believed the ban would be lifted. To their thinking, grower training and compliance is key.

Hormel: A February 1 dialogue produced significant progress on the issue of antibiotics in Hormel’s meat supply. The company no longer uses antibiotics for growth purposes or gestation crates. Hormel has implemented separate pilot programs to raise pigs and turkeys without antibiotics and are working to reduce their use with hogs. Applegate Farms, an organic meat company, was acquired and Hormel is now implementing the Applegate model into its operations. Our shareholder resolution was withdrawn.

McDonald’s Corporation: The goal of our engagement has been to convince McDonald’s to cease the use of antibiotics that are important for human medicine in its global meat supply chain. Beginning this year, the company will no longer source chickens that have been fed these antibiotics but they have yet to address beef or pork, or the use of other antibiotics in their meat. When pressed by shareholders, the company said they are studying the issue and would not commit to a timeline for implementation. A shareholder resolution was filed and will be voted on at the annual meeting on May 26.


Water will continue to be a critical issue for years to come and is seen as a major aspect of climate change. Key water issues exist in every area of life and business and our company engagements center around water scarcity, availability, accessibility, consumption, quality, contamination, and the human right to water. It is a major aspect of our dialogues and resolutions with fossil fuel companies, beverage companies, and agricultural companies.

enjoy-coca-colaCoca Cola: Our dialogues have focused on the company’s actions in regard to rights, especially water. They use the Ruggie Principles, the CEO Water Mandate, and Shift for guidance on these rights. Based on community vulnerabilities, they develop and implement a source water protection plan. Embedded in this requirement is a rights-based approach to water. The company took the opportunity last year to see how well they were doing on the rights use approach—use of water can’t affect quality, quantity, accessibility, and affordability of water to the community. They have a common strategy based on risk assessments and did a qualitative and quantitative assessment. All business units will be required to do the assessments.

Tyson Foods: Despite numerous violations and fines resulting from nutrient runoff at Tyson processing plants as well as from their over 5,000 contract farmers, the company refuses to develop a dedicated water policy. Tyson’s current disclosure on water quality does not extend beyond its own facilities and lacks metrics, goals, or information about processes to manage the risk of contamination. Our shareholder resolution garnered 11.81% vote.


walmart-logo-2013Sears, Walmart, Target, Kohl’s, and others: In our dialogues with these corporations, we ask that supply chain monitoring be a major part of the company policy throughout the global community. This policy would be made public and independent monitoring would be part of the process. This issue continues to be a very serious one for all companies who outsource from factories in developing nations. In recognition of the factory fires in Bangladesh three years ago, ICCR reminded all companies that “as shareholders who have been engaging apparel companies and retailers to foster responsible sourcing practices, including human rights due diligence with robust audit oversight in global supply chains, we see the events in Bangladesh as a watershed moment for the industry. Regardless of whether products are being sourced from Bangladesh, Guatemala, China, or the Philippines, morality dictates that the price/value calculus for all manufactured goods must begin with the fundamental human rights of workers, including health and safety, freedom of association and collective bargaining, and a living wage.”

Ford: The dialogue on September 15 was focused on trafficking, supply chain, labor brokers, and a “no fees” campaign. The company introduced us to the new initiatives that will strengthen supplier sustainability performance and develop an accountable supply chain management system. At our January 28 meeting, Ford introduced a new set of supplier score card metrics that will cover environment, conflict minerals, human rights, and working conditions.


goldman-sachs-logoBank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, and Wells Fargo: All seven major financial institutions have taken steps to revisit their business standards with a more definitive awareness of “Values and Ethics in Banking.” Individual banks are approaching it differently. Generally speaking, the banks are not happy with all the regulations, especially the Dodd Frank with increased disclosure requirements. We noted the complaints on the 10-K filings.

Wells Fargo: Our October 23 dialogue centered on Wells Fargo’s implementation of a Business Standards Review. They strongly held to their process which was an updating of their “Vision and Values”–is good in itself but not inclusive of areas of culture and risk management that are deemed necessary. Our December 3 meeting in New York enabled Wells Fargo to envision a reframing of their “Vision and Values” that would address the areas of risk management, reputational risk framework, and metrics. The company still hasn’t made a definitive commitment to a Business Standards Review as such but hope to disclose more information within their “Vision and Values” document.


Walgreens_Logo_2Rite Aid, Walgreens: Tom attended the Rite Aid’s annual meeting on June 25 and made a statement on tobacco sales. The company was subsequently bought by Walgreens. He also attended the Walgreens’ annual meeting on January 27 and spoke with their U.S. division president and two board members who indicated that they had serious discussions about eliminating tobacco from their stores. A follow-up dialogue was scheduled for May 2.

Comcast, Disney, Time Warner: Conversations have been held with all six major movie studios that make up the governing board of the Motion Picture Association of America concerning the health impacts of smoking images in movies. The Sisters of St. Francis have participated in three dialogues with the companies listed above. Although each studio has implemented policies that prohibit smoking in youth-rated movies (with exceptions for historical and literary characters and films purchased from independents) smoking incidents have remained fairly steady. The studios will not support our push to make all movies with smoking R-rated.


dollar-tree-logo-300Dollar Tree: On April 28 we continued our dialogue with Dollar Tree and expressed our disappointment with their lack of a corporate responsibility report that was due last November. We again presented the business case for reducing toxicity in all their products. We noted that the main priority is the health of the consumer and we encouraged the company to manage risks since they have not yet developed a “safer alternative” policy. We are awaiting the completion of their 2015 Sustainability Report and after much persistence, they agreed that it would be ready in July.

Alpha Natural Resources: Alpha filed for bankruptcy but is continuing operations. An almost entirely new management team has been unresponsive to our requests for dialogue. We authored two letters expressing our objection to their decision to discontinue health benefits for retirees while, at the same time, applying for permission from the bankruptcy court to pay executive retention bonuses. We also addressed the company’s responsibility for reclamation of its closed mines. With the uncertainty of the company’s future, this engagement will be sunsetted.

Peabody Energy: The tone of the February 6 dialogue with Peabody did not reflect the reality of the company’s situation. They spoke of efficiencies being implemented, their positive safety record, and the hope of Carbon Capture and Sequestration as their future. Peabody filed for bankruptcy on April 13. On a positive note, they assured us that they have sufficient funds for reclamation of all their mines. This engagement will also be sunsetted.

General Electric: Our resolution requested that the company undertake an independent evaluation demonstrating that an assessment has been done on all potential sources of liability related to polychlorinated biphenyls discharges on the Hudson River. Because of ongoing litigation (Record of Decision Agreement, 2001), the SEC allowed the resolution to be omitted from the proxy under ordinary business. We did give our proxy to indigenous activists from Brazil as they fight against a mega dam.


merck_logo-svgDomestic Health: Abbvie, Bristol-Myers Squibb, Johnson & Johnson, Merck, and Pfizer: The focus of these engagements has shifted from health coverage to drug pricing. Discussions with these companies have recently focused on the development of key performance indicators regarding the pricing of drugs as well as the lifecycle of the drug’s indications. Some companies have launched a task force on value-based pricing framework. Bringing a drug to market involves extreme research and development costs and a high failure rate so companies must recoup those losses.

Domestic Health – Insurance: Anthem, UnitedHealth: A December 11 dialogue with Anthem explored the company’s growth in the Medicaid sector, their merger with Cigna, and their noncompete agreement with Blue Cross/Blue Shield. They don’t believe they are limiting competition and they will be able to offer better prices because of their further reach. UnitedHealth recently announced they are leaving the Affordable Care Act exchanges in all but a few states. A dialogue date is being negotiated.

Global Health: Bristol-Myers Squibb, Johnson & Johnson, Merck, Pfizer, and ViiV: Access strategies in low and middle income countries are highly dependent on the cooperation of governments. These companies have longer histories of involvement with HIV drugs but have expanded over the years to drugs that treat TB, malaria, hepatitis C, and, more recently, cancer. Many collaborations with Gates Foundation, Clinton Initiative, Medicine Patent Pool, WHO, and others have fostered access one country at a time.


anthemAnthem: Our February 28 dialogue revealed significant disclosure on lobbying at both the federal and state levels. The company requested that we withdraw the shareholder resolution but after much discussion, it was decided that the proposal would remain. Anthem’s current disclosure leaves a gap because the current reports only capture dues rather than all payments (all payment ensures that any payments beyond dues are captured, including special assessments). The resolution will be presented at the company’s May 19 annual meeting.

Comcast: We cofiled a shareholder resolution with Friends Fiduciary Corporation seeking an annual report on direct and indirect lobbying and grassroots lobbying communications. Comcast’s disclosure is limited to a statement on their website explaining their reasoning in using lobbying activities to support their business. The company has not committed to a dialogue. The proposal will be presented at the annual meeting on May 19 (on the internet only).

– Nora Nash, OSF, and Tom McCaney

Additional Summaries of Shareholder Engagement