What's Happening

By Maxwell Homans
Shareholder Advocacy Associate, Mercy Investment Services, Inc.

The Portfolio Advisory Board filed a proposal this year at Dollar General, asking the retail dollar store to adopt a comprehensive human rights policy aligned with international human rights standards. Mercy Investment Services worked closely with the Interfaith Center on Corporate Responsibility’s (ICCR) Advancing Worker Justice Initiative to advocate for this resolution, carrying forward engagement with Dollar General following the company’s unsatisfactory responses to previous human rights concerns.

A previous resolution in 2023 had asked the retail chain for a safety audit to address reports of unsafe conditions, understaffing, and violence at many of its stores. The 2023 resolution received a majority vote with more than 77% shareholder support. However, the company surprisingly refused to engage with the shareholders who had led this proposal. Dollar General chose instead to conduct an audit privately, choosing a “union-busting” law firm as the auditor; the audit found minimal problems with company policies.

Since that time, Dollar General agreed to settlements with the Occupational Safety and Health Administration (OSHA) and the National Labor Relations Board (NLRB) for unsafe store conditions and illegal union-busting activities. The company was fined $12 million by OSHA in July 2024 for repeat safety violations, and in July 2023 the NLRB ruled that Dollar General was practicing “blatant hallmark unfair labor practices” based on their corporate response to store workers attempting to unionize in Connecticut. In addition, workers have reported continued understaffing, low pay, and feeling unsafe at stores, with no meaningful changes since the audit and agreement with OSHA to increase safety protocols.

Recognizing the need for further engagement on worker safety and rights, the proposal the PAB filed this proxy season focused on requesting a corporate-wide human rights policy, asking for greater protections for workers and customers still experiencing unsafe conditions in stores. 

To highlight the voices of Dollar General workers calling for change, ICCR co-hosted a webinar briefing ahead of Dollar General’s annual meeting to build support for the human rights proposal. Dollar General workers told personal stories of receiving violent threats at work, being ordered to block fire exits, and feeling embarrassed that peer retailers offered safer conditions and higher pay for their workers. Investors also made the case for a human rights policy, connecting worker testimonies to widespread financial risks and penalties faced by Dollar General. 

The human rights proposal received 22.9% of the shareholder vote at the company’s annual meeting, falling short of a majority, but high enough to allow investors to re-file the proposal next year. PAB and our fellow investors will continue our push to improve workers’ rights and human rights in Dollar General stores. 

As workers demand more from U.S. retailers, it is imperative that these companies uphold workers’ legal rights to organizing and collective bargaining and a safe and healthy workplace. Stores including Whole Foods, Trader Joe’s, and Starbucks have all seen their workforces unionize in recent years, and with Dollar General surpassing 20,000 stores in the U.S. this past year, responsible business means embracing workers’ rights, not systematically denying them. 

Workers and shareholders will continue to speak up to ask companies to respect human rights; to be successful, companies like Dollar General need to listen.

By Lydia Kuykendal
Mercy Investments

February 6, 2024, Adrian, Michigan – Last year, shareholder health work focused on intellectual property protections for branded drugs. Specifically, it sought to clarify the relationship between pharmaceutical company patenting and access strategies. 

That work continues, with the Portfolio Advisory Office filing resolutions at five pharma companies – Eli Lilly, Gilead Sciences, Johnson & Johnson, Pfizer, and Merck. Several regulatory changes over the past year will impact this issue, and we hope that companies see these second-year proposals as a way to prepare for these coming changes.

First, the Inflation Reduction Act (IRA) empowers the federal government to negotiate some drug prices. Some have argued that it enacts significant patent reform, specifically around the issue this proposal seeks to understand. This comes from a critical provision of the IRA that states the only drugs that qualify to be considered for price negotiations are drugs with no generic competition, thus discouraging extended patent exclusivities. Additionally, three bills addressing patent reform passed out of the U.S. Senate Judiciary Committee in 2023 and, if passed, would impact pharma companies’ current practices.

In addition to the continuing work on patents, the Interfaith Center on Corporate Responsibility (ICCR) health group has started a workstream around the right to health. This is a human right: the right to the highest attainable standard of physical and mental health, as defined by the World Health Organization. Access to medicines is a critical component of the right to health. 

Target 3.8 of the United Nations’ Sustainable Development Goal 3 assesses progress toward “access to safe, effective, quality and affordable essential medicines and vaccines for all.” The UN Special Rapporteur on the Right to Health has made clear that states and pharmaceutical firms share the responsibility for increasing access to medicines and recommends that firms “should adopt a human rights policy statement which expressly recognizes the importance of human rights generally and the right to the highest attainable standard of health in particular.”

However, a quick look at drug pricing shows that U.S. pharmaceutical companies are not supporting this right. An analysis by the Rand Corporation concluded that U.S. prices for branded drugs were nearly 3.5 times higher than prices in 32 Organization for Economic Co-operation and Development (OECD) member countries. A study by the Kaiser Family Foundation found “prescription drug costs to be an important health policy area of public interest and concern.”

Shareholder proposals at Eli Lilly, Bristol Myers Squibb, and Pfizer seek to understand whether the business model of pharma companies may pose human rights risks. The current business model of the pharmaceutical sector, which in many instances prioritizes profitability over patient health, often infringes on these rights. Given pending legislation in the European Union that would mandate human rights due diligence as called for in the UN guiding principles, companies undertaking human rights due diligence will be ahead of the curve. 

International human rights organizations have recognized the human right to health for decades. Drug manufacturers have a responsibility to operationalize a business model that promotes this right worldwide. If, as all companies in this industry state, patients are indeed the most essential part of their business, this should be an achievable task.