COMPANIES AND THEIR BOARDS had better take religious activists seriously, says Sister Patricia Wolf, executive director of the New York-based Interfaith Center on Corporate Responsibility. She was instrumental, for example, in forcing Wal-Mart to disclose employment data. Here are excerpts from a conversation.
Directorship: Just how big is your organization?
Sister Patricia Wolf: We have about 275 faith-based institutional investors that have about $110 billion under investment. We also have affiliate members, which are long-term investment firms, maybe pension funds. We have about 30 of those.
Have you become more effective in pushing for change in the boardroom over the years?
There are different ways of talking about success. One way is the vote. Many years ago, we would have been happy with 3 percent of the shareholder vote. Today, we're seeing much stronger votes. If we take a look at our human rights resolutions, three years ago the average vote was between 6 and 8 percent. That has grown. This year, our human rights resolution filed at Boeing got 22.5 percent, 25 percent at Chevron and 23 percent at Haliburton. What we understand that to mean is that there is greater support for these resolutions on the part of institutional investors.
But why would a pension fund or a mutual fund care about human rights? All they want is the best rate of return on their investment, right?
Companies today can see that there are issues of reputational risk. No company wants to be tagged as a violator of human rights. From a financial point of view, that can lead to exposure and liability. Long-term institutional investors understand that.
What are your key issues that you've been active on in this proxy season?
There are nine different areas. Under environment, we have environmental justice, and water and food. Under global corporate accountability, we have human rights and what we call contract supplier. We have a working group called Acccess to Health, which has done significant work on the issue of HIV-Aids. Another called Access to Capital, which looks primarily at fair lending practices of banks.
Do you work with community activists on so-called redlining practices?
How we align ourselves with other organizations varies. Their strategy has to fit the strategy of long-term institional investors. That's fundamental. We bring sophisticated research to the table. We collaborate with an organization called Cannicor, which assists us with research. Tanks understand the research. We're trying to improve the lending practices of specific banks. Collaboration with local groups needs to fit in.
And your other two issues?
We work on the issue of militarism and violence in society and we've done work on violent video games in particular. Finally, we have a small working group on corporate governance.
You helped force Wal-Mart to disclose its data on the employment of women and minorities this year?
That was a huge success for us this year. The reason was that proponent of that resolution, the Sisters of Charity, had filed it seven times, including every year since 2002. The votes kept increasing each year. Last year, it reached 18 percent. We thought that was a very good vote. The resolution has served to keep the dialogue open with Wal-Mart. The resolution was filed again this year, and Wal-Mart's response was that it would post the Equal Opportunity Employment data on its website and it invited the proponents to come to the annual meeting and address the issue. So we withdrew our resolution.
The point of the exercise was to prevent discrimination?
The point of it is to be able to track the hiring of women and minorities. Wal-Mart has made efforts to improve diversity on its board and among what they call their 'associates.' This is a public statement of a breakdown on minorities and women in the work place. It's a good first step.
So you supported the Sisters of Charity?
The ICCR does all the coordination for our members.
How are religious activists such as yourselves different from, say, labor union activists?
What makes ICCR unique is that we want to do is to engage the company in dialogue and change corporate policy and practice. About 50 percent of our time is devoted to long-term dialogue with the corporation. We stay with the company for a long time.
