The change in US administration this year has generated a palpable sense of optimism among proponents of socially responsible investing and a sustainable and just economy. The Securities and Exchange Commission (SEC) and other federal agencies have appointed new leaders whose values align with our priorities. As a result, many of the 11th-hour rules and regulations put in place by the previous
administration in 2020 have either been paused, deemed unworthy of enforcement, or canceled.
Ethical investors were particularly concerned with legislation that ended limits on methane emissions from new oil and gas wells while removing additional curbs on leaks of smog-causing compounds. They were also dismayed by new rules imposing limits on shareholders’ rights to file resolutions with company management. While the methane regulation passed the Senate in April, the shareholder rights bill did not. This leaves it up to the SEC to determine how to enforce the methane regulation, which wouldn’t go into effect until 2022, and/or go through a new rulemaking process, which will take time.
In the meantime, we are expecting the imminent filing of a lawsuit against the SEC challenging the manner in which the shareholder rights rule was implemented (it failed to conduct the required economic analysis) and asking a judge to halt its implementation. Natural Investments has contributed financially to the legal fund of the plaintiffs in this case: the non-profit advocacy groups Interfaith Center on Corporate Responsibility (ICCR) and As You Sow, as well as shareholder advocate and Corporate Governance founder James McRitchie. ICCR has been a leader in shareholder advocacy for 50 years, starting with its founder Tim Smith (whom we interviewed for this newsletter).
The SEC made positive news in March when Acting Chair Allison Lee, a longtime ally of the sustainable investment industry, issued a request for public comment on a proposed rule that would require companies to disclose data related to climate change (e.g., greenhouse gas emissions, reduction targets, and progress). We submitted a comment letter, and while we agreed that the SEC should require companies to provide emissions data, we asked the SEC to broaden its disclosure requirement to include as many environmental, social, and governance issues as possible. This has long been the top regulatory priority for the sustainable investment industry, as it has the potential to establish consistent and complete reporting of environmental, wage, human rights, worker safety, community, diversity, and board-related issues––and to do so with clear minimum performance metrics. Right now, such disclosure is voluntary and too inconsistent and incomplete to properly inform investors’ decision-making process. We look forward to seeing how the public input influences the SEC’s next rulemaking on disclosure.
OTHER NATURAL INVESTMENTS ADVOCACY HIGHLIGHTS FROM 2021:
Urging large asset managers to:
- Vote against approval of all-white boards of directors
- Vote against approval of directors in charge of political spending at corporations that have failed to address their role in funding elected officials implicated in the Capitol Insurrection or those behind or supporting voter suppression efforts
- Support shareholder demands for racial equity audits at critical companies
- Support shareholder demands for complete transparency and accountability on political spending and lobbying
- Support shareholder proposals demanding long-overdue action to address practices that reflect white supremacy and cause related harms, including inequitable workplace practices and discrimination, customer discrimination and abuse, algorithmic bias, and community surveillance.
Requesting President Biden and Vice-President Harris to prioritize the protection of women’s reproductive health care and supporting existing bills that:
- Remove federal restrictions on the use of federal health insurance funds for abortion
- Establish a federal statutory right to abortion care
- Extend postpartum insurance coverage
- Provide 12 weeks of paid family and medical insurance leave
- Make reasonable accommodations for pregnant workers
Imploring Congress and the Environmental Protection Agency to protect Bristol Bay in Alaska from mining development and waste leaching
Requesting the President and Congress to increase the federal minimum wage gradually to $15/hour by 2025
Encouraging leading corporations to take a stand where they operate and advocate against state-level efforts to restrict voting rights via support for the For the People Act
We remain committed to using our voice, in concert with our industry peers, to raise the bar of corporate social responsibility and to seek policies and laws that facilitate a just and sustainable economic system. Watch this space to stay up to date with our efforts.