Activists push for gun safety in the United States

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As President Joe Biden prepares legislation to ban assault weapons, ESG activists are making a new push for gun safety in the United States through the shareholder franchise.

Another push for gun safety in the United States

This week, New York City Comptroller Brad Lander – alongside city and state politicians, the California State Teachers’ Retirement System (CalSTRS) and Amalgamated Bank, among others – spear a new campaign.

The new campaign asked credit card companies Mastercard, Visa and American Express to create a new merchant category code for gun and ammunition stores, allowing these institutions to better track suspicious activity by identifying purchases. related to firearms.

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And on September 12, shareholders of Smith & Wesson, one of the two largest publicly traded arms manufacturers, vote on a shareholder proposal requesting a human rights policy.

It will likely be unclear whether this will pass – proposals for corporate human rights reporting received 36% support in 2019, were withdrawn in 2020 and received 44% last September.

While a report on the company’s impact on gun violence received 52% support following the Parkland school shooting in February 2018, according to Insightia’s Vote module.

The goal, says Judy Byron of the Intercommunity Center for Peace and Justice, which filed the Smith & Wesson proposal, is “to get businesses to play a role in gun violence reduction by taking responsibility for assess the safety of their products and their marketing practices; and to track and monitor the adverse effects of their products.”

She can draw confidence from CommonSpirit’s efforts at Sturm-Ruger, where proposals calling for greater disclosure received nearly 69% support in 2018 and earlier this year.

The focus on manufacturers is partly due to the successful movement of investors into other sectors. Members of the Interfaith Center on Corporate Responsibility (ICCR) famous commitments to retailers.

Dick’s Sporting Goods and Walmart, which led to the pair removing guns from their shelves between 2018 and 2019.

“Dick’s Sporting Goods and Walmart have taken bold steps to do their part in implementing gun violence prevention and gun safety strategies,” CommonSpirit’s Laura Krausa told me via email. “Their commitments are examples for other firearms retailers, distributors and manufacturers.”

“We definitely need an Ed Stack of Dick’s Sporting Goods in the gun manufacturing industry to take a positive stance on the need for the industry to offer solutions to the increase in gun violence “added Byron, referring to the former CEO who made big changes at the retailer. gun policies in 2018 and subsequently lobbied politicians.

The ICCR has also written to logistics companies fedex and UPS identify measures to prevent the sale of “ghost guns” – firearms that can be assembled at home. Earlier this year, the Biden administration launched a handful of rules to make ghost guns more traceable and criminalize unlicensed manufacturers.

ICCR members have also engaged with banks and credit card companies, but last week’s campaign – involving shareholder proposals at American Express and Mastercard and letters to those companies and Visa – seeks to innovate.

A shareholder proposal on phantom gun measures at Mastercard only received 10% support in June and calls for new merchant category codes can also be seen as ‘too prescriptive’, a term that shareholders have used to describe some ESG proposals this proxy season.

However, the NYC-led campaign can hope to build on other recent successes that social activists have won at credit card providers. Over the past year, Pershing Square Capital Management’s Bill Ackman has pressed Visa and Mastercard to ban pornography companies with lax controls over illegal content on their networks, even offering to help fund lawsuits against companies.

The activist investor does not own shares in either company, however, and the main leverage has been public pressure and reporting, rather than shareholder candor.

This distinction may not bother the leaders of this campaign. The combination of public pressure, regulation and winning over a large portion of a company’s owners is a deliberate strategy and one to which public pension funds are particularly well suited.

With New York State having lost a Supreme Court case over its concealed carry laws earlier this summer, there is renewed political urgency to tackle gun safety by other means. And if that leads to results through negotiations with credit card companies rather than a shareholder vote, politicians and fund managers won’t know the difference.

— Josh Black, Managing Editor, Diligent, formerly Insightia

A record year for human capital

Human rights proposals are proving popular among investors, a trend that will continue as shareholders strengthen their policies for the coming season.

Human capital attracted considerable attention at the start of COVID-19, with several issuers facing backlash for not taking proper care of their workers during the pandemic.

Such controversies have driven companies at all levels to demonstrate how they are taking proper precautions to keep workers safe.

So far this year, a record 15 human capital shareholder proposals have been voted on at US-listed companies, winning an average support of 33.7%.

This is a significant increase from 2018, when only three such proposals received a meager average support of 15.6%.

2022 was also a banner year for majority human capital wins. Three proposals requesting human rights reports received more than 50% support, while a proposal requesting Sturm Ruger to conduct a third-party human rights impact assessment received a 68.5% support, the highest level for any such proposal in history.

“There is growing recognition of the role that companies can and must play in respecting human rights,” said Kimberley Lewis, head of active ownership at Schroders, in a recent interview.

“Companies involved in human rights controversies could face higher operational and financial risks and could suffer reputational damage.”

Today, three years into the pandemic, investors remain just as focused on managing human capital. In response to what Norges Bank described as the “rapid” evolution of these commitments, the $1.4 trillion fund manager unveiled new expectations regarding workers’ rights.

Going forward, issuers will be required to report human capital publicly in accordance with the best international standards, such as the recommendations of the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI).

Norges also expects issuers to disclose “essential information” about their workforce, such as the number of workers, employee turnover, diversity data and relevant industry-specific metrics. Companies that do not meet these expectations may be subject to an additional vote or commitment.

Norges is not the only investor to intensify its efforts on human capital. Lord Abbett & Co. and Vanguard Australia have also refined their human capital policies ahead of the 2023 proxy season.

Companies are waking up to the growing pressure and taking action. In July, Meta released its inaugural human rights report after years of pressure from investors to improve its human rights reporting.

Nvidia and Thomson Reuters have also agreed to publish human rights policies and assessments, following engagement with members of the Interfaith Center for Corporate Accountability (ICCR).

“In a highly interconnected global economy, companies are increasingly under scrutiny for how they address human rights issues that may arise from their business practices,” BlackRock Investment Stewardship (BIS) said in a statement. paper describing its approach to human capital.

“We appreciate when companies implement processes to identify, manage and prevent adverse human rights impacts that could expose them to significant risk, and provide robust information about these practices.”

— Rebecca Sherratt, Publications Editor, Diligent, formerly Insightia

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