(This is the second in a two-part series on the efforts of faith-based groups trying to influence decisions made by corporations and to enact change in their business practices.)
In 1996, Capuchin Fr. Mike Crosby read an article about the lack of upward mobility for women in the business world. It had an impact on him.
“At the last minute, I filed a shareholder resolution on the glass ceiling with Exxon Mobil,” Fr. Crosby said, adding he was hoping it would help more women get hired in upper management and executive positions in the company.
The shareholder resolution was filed by the then Midwest Capuchins; today they call themselves the Seventh Generation Interfaith Coalition for Responsible Investment (Seventh Generation CRI). It got the attention of Exxon Mobil.
Fr. Crosby said company representatives traveled from Dallas to Chicago to meet with him.
“I got a car and came down from Milwaukee and we met some place in Kenosha, at a motel,” Fr. Crosby said. “They brought in all of their people showing (me) they’re doing this to have upward mobility within the company for women.”
Fr. Crosby said he listened to what they were doing to solve the problem.
“And they made a case that they were addressing this issue,” Fr. Crosby said. “So I said, ‘Well, that’s good enough for me. I’ll withdraw the (shareholder) resolution.’”
Toward the end of the meeting, Fr. Crosby recalls one of the individuals telling him “Mike, next time you have a problem with us we would really appreciate you not filing a resolution.”
Environmental concerns surface
The following year, 1997, Fr. Crosby read about how climate change was affecting the environment. This time,
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armed with questions about how Exxon Mobil was handling the issue, he went to them.
“For about two hours we met at Exxon headquarters,” Fr. Crosby said. “They brought out all their top guns and at the end of it I said, ‘You know, you convinced me about the women’s issue last year; you have not convinced me (on climate change). I’m filing a resolution.’”
That began his almost 20-year journey to address the issue of climate change with Exxon Mobil.
The Seventh Generation CRI is a Catholic coalition within the Interfaith Center for Corporate Responsibility, which is composed of about 25 Catholic groups throughout the country. Each group purchases stock or bonds of different companies. The Province of St. Joseph of the Capuchin Order in Milwaukee, for example, uses part of its portfolio to keep the tuition down at St. Lawrence Seminary High School.
The groups also use their shared ownership, if they have owned at least $2,000 worth of stock for one year, to file shareholder resolutions to engage a company on a particular issue.
They have worked to address climate change for several years.
“Over all the years when increasing data is showing that there is climate risk, we have been stymied by Exxon’s absolute commitment to keep locked into fossil fuel production without any known significant effort to develop alternative energy sources,” said Fr. Crosby.
Resolutions continue to be filed
The priest said the lack of communication between Exxon Mobil and the shareholders is frustrating, which is why shareholder resolutions continue to be filed.
“They won’t let us talk to the board,” Fr. Crosby said. “As a result, we had no other alternative … we’re saying this is not good for the long term interests of this company or the planet.”
In 2015, two shareholder resolutions were filed by ICCR members regarding climate change.
The first resolution was filed by the Province of St. Joseph of the Capuchin Order in Milwaukee seeking the addition of a climate change expert on the board of directors.
The resolution states, “We believe the Exxon Mobil’s board of directors would benefit by addressing the impact of climate change on its business at its most strategic level by electing to its board independent specialists versed in all business aspects of climate change.”
It continues, “Just one authoritative figure with acknowledged expertise and standing could perform a valuable role in ways that would enable the board to more effectively address the environmental issues and risks inherent in its present business model regarding climate change.”
Exxon Mobil recommended shareholders vote against that resolution, stating, “The board is comprised of members with diverse backgrounds and views, including several who have engineering or science degrees.”
It continues, “The Board’s Public Issues and Contributions Committee is charged with reviewing the effectiveness of the company’s policies, programs and practices with respect to the environment.”
A resolution needs 50 percent of the vote in order to be taken to the board of directors. This one received only 21 percent, but Fr. Crosby believes this is a promising sign and re-filed the same resolution.
“This year, given the pressure, given more information about climate change, we will get a higher vote,” Fr. Crosby said.
New Jersey sisters file resolution
The second resolution was filed by the Sisters of St. Dominic of Caldwell, New Jersey, which asked for the board of directors to “adopt quantitative goals for reducing total greenhouse gas emissions (GHG) from the company’s products and operations.”
Exxon Mobil recommended that the shareholders vote against the resolution and stated, “As Exxon Mobil seeks to increase production of oil and gas to meet growing global energy demand, the company continues to take steps to improve efficiency, reduce emissions and contribute to effective long-term, sustainable improvement.”
It continues, “In general, energy is required to produce and process oil and gas, so increases in production volumes that are needed to meet the world’s rising need for energy will lead to increases in emissions from our operations and from end use by customers.”
This resolution was also defeated, receiving only 9 percent of the vote.
According to Exxon Mobil’s media relations manager, Alan Jeffers, the company values the relationship it has with ICCR and other shareholders.
“It’s a great way to exchange viewpoints and hear the concerns that the shareholders might have,” Jeffers told the Catholic Herald. “And also, give them the benefit of a direct discussion and understand the company’s position without a filter such as the media.”
Jeffers said the company tries to accommodate all of the shareholders’ concerns and deal with them directly. He mentioned the company talked with a large number of shareholders this year.
“On that occasion, we took the opportunity to bring in one of our vice presidents at our research company and he had a really good discussion with them on various lower carbon, lower emission technologies that we’re working on,” Jeffers said. “An entire suite of things I don’t think they’re particularly aware of.”
As for the current list of shareholder resolutions to be discussed at the annual meeting, he wasn’t able to comment.
“I’m at a little bit of a disadvantage when it comes to shareholder resolutions,” Jeffers said. “My lawyers tell me that we need to communicate with all shareholders at the same time.”
He added the company will release its annual proxy statement for 2016 in April.
Acton Institute opposes ‘shareholder activism’
The filing of shareholder resolutions to create some sort of change is one that some people are against. The Acton Institute was founded by a Catholic priest and is a “non-profit research organization dedicated to the study of free-market economics informed by religious faith and moral absolutes,” according to their website.
Kishore Jayabalan, director of the Acton Institute office in Rome, Italy, said this behavior is “shareholder activism.”
“We’re quite different than the Interfaith Center for Corporate Responsibility; we’re not an activist group,” Jayabalan said. “We’re much more of an educational organization.”
Jayabalan said ICCR has a right to exist, but he questions its tactics.
“The shareholder activism model is much more confrontational, it’s much more antagonistic to what businesses do,” he said. “I think our approach is much more one of engagement with the reality of business, the good businesses, and so I think it’s just a different approach to trying to achieve a more morally sound world.”
Jayabalan said the issue of climate change isn’t a top concern for him.
“I happen to think that the climate change issue is a trendy issue, it’s one that everyone likes to talk about without knowing much about it,” he said. “Whether Exxon Mobil needs to have a climate change expert on (its) board or not, I’m really not qualified to say. Would it bother me if they did not have one? Not particularly. Would it bother me if they did? Again, not particularly.”
Energy companies like Exxon Mobil, Jayabalan said, are easy targets.
“I think any oil company, let’s be honest, is the boogie man in this situation,” he said, adding activist groups are always blaming them for environmental issues. “If they have some kind of great idea about what kind of energy sources (other countries) should be using that are both cheap and viable, they should invest resources in looking at those rather than simply castigating fossil fuels as this great pariah.”
Companies benefit by dialoguing with groups
Margaret Hughes-Morgan, assistant professor of management at Marquette University, said it would benefit companies more to dialogue with groups like ICCR.
“The ultimate goal of a company is to make money but if you got a constituent that’s unhappy with your tactics then that’s going to impact profitability,” Hughes-Morgan told the Catholic Herald.
Before coming to Marquette, Hughes-Morgan was director of the United Bank of Switzerland and spent several years with Lehman Brothers Holdings Inc., in institutional sales.
“When I was working at Lehman Brothers … a large part of my job was taking various company management teams around to meet with their investors,” Hughes-Morgan said. “Thy just wanted to go around and meet with their investors to keep these investors happy because a lot of their compensation is based on how well the stock does.”
Hughes-Morgan said companies have a responsibility to make a profit for their shareholders. However groups like ICCR are starting meaningful conversations with big companies.
“The fact that corporate social responsibility is such a huge issue these days … they (ICCR) were well before their time,” Hughes-Morgan said. “The way that they define success is just getting the conversation going which, in my opinion, is success … these things take time.”
Despite starting the conversation, Hughes-Morgan is less optimistic than Fr. Crosby on the shareholder resolution addressing a climate scientist on the board of directors.
“I don’t know that ICCR is going to be able to get Exxon Mobil to put an environmental scientist on its board of directors,” she said. “I just don’t think it’s going to happen. Exxon is way too powerful.”
But Hughes-Morgan said this route is more effective than protesting on the street.
“It’s the ones that stomp their feet and throw a tantrum that are the least successful,” Hughes-Morgan said. “Because the companies are going to say ‘the heck with you’ … if you can really generate meaningful conversation, that’s the way to do it.”
But there’s a chance things can change.
“Ultimately, corporations have a responsibility to their customers and all of us are customers of Exxon Mobil,” Hughes-Morgan said. “If we destroy the environment, it hurts everybody.”