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By Pat Zarega, Senior Director of Shareholder Advocacy, Mercy Investment Services
For almost eight years, the Portfolio Advisory Board (PAB) of the Adrian Dominican Sisters has engaged and supported the work of the Cotton Campaign. It is known that forced labor continues in pockets, but nowhere has it been more organized than in countries where governments force citizens to participate.
The government in Uzbekistan shut down schools and public offices for months at a time to mobilize and send their country’s youth, teachers, nurses, and civil servants to harvest cotton. The government also dictated prices of seeds and fertilizers, controlled the irrigation, and purchased the crop at a fraction of market price.
More than a decade ago, fellow investors came together to advocate for the end of government-directed forced labor in Uzbekistan’s cotton industry. They joined with other human rights NGOs, academics, brand associations, and independent trade unions to form the Cotton Campaign.
In 2010, the Cotton Campaign and the Responsible Sourcing Network launched the Company Pledge Against Forced Labor in the Cotton Sector of Uzbekistan. By signing it, brands and retailers publicly committed to not use Uzbek cotton produced with state-orchestrated forced labor. The PAB used its position as a shareholder to bring the issue of forced labor in the cotton industry to the table at many brands and retailers. In the end, 331 brands and retailers signed the Pledge, including large companies such as Amazon and Walmart.
Over the years, Cotton Campaign members met with the governments of Uzbekistan and the United States to call for addressing the issue. Civil society in the country continued to document the situation and work with the Uzbek-German Forum to provide well-researched reports updating progress. For the 2021 cotton harvest, the Uzbek Forum for Human Rights found no central government-imposed forced labor.
Given the progress made in protecting the workers’ rights and eradicating systemic forced labor, coalition participants traveled to the country to be alongside the Government of Uzbekistan in announcing the lifting of Uzbek Cotton Pledge. The Cotton Campaign has gathered a video history of the work as a beginning to acknowledge the companies who participated in the pledge.
The PAB is currently represented in this corporate work by Pat Zerega of Mercy Investment Services and Sister Judy Byron, OP, Consultant. At the lifting of the pledge, Pat stated, “Investors’ deep concern and respect for human rights, as detailed in the UN Guiding Principles on Business and Human Rights (UNGPs) and the [Organisation for Economic Cooperation and Development] OECD Due Diligence Guidance for Responsible Business Conduct, calls us to address the forced labor situation in the Cotton Industry. We have worked with the Cotton Campaign and supported the Cotton Pledge to address forced labor in Uzbekistan. The findings of independent civil society monitoring the 2021 cotton harvest shows that Uzbekistan has successfully eliminated state-imposed forced labor in cotton production. We are pleased to acknowledge this breakthrough while at the same time calling for continued due diligence by all companies in the Uzbek textile industry, urging them to establish and maintain strong labor standards and engage with the Cotton Campaign.”
After serving as Portfolio Manager for Community Investing for the Portfolio Advisory Board (PAB) for the past four years, Corinne Florek, OP (left), will bring this work to completion at the end of this fiscal year. We thank Sister Corinne for her many contributions to the work of PAB, for building long-lasting relationships with borrowers, and for sharing her expertise and commitment to social impact investing.
The General Council invited Marilín Llanes, OP (right), to succeed Sister Corinne in the role of Portfolio Manager. In informing the PAB of Sister Marilín’s selection, Elise García, OP, General Council Liaison to the PAB, stated:
“The General Council is deeply grateful to Corinne Florek, OP, for her extraordinary decades-long leadership in the field of community investing and for her current service as the PAB’s Portfolio Manager. We are delighted to inform you that Marilín Llanes, OP, has accepted our call to take on the role of Portfolio Manager effective July 1, 2022, and that Associate Dee Joyner has agreed to continue as PAB Director through FY2023.”
Sister Corinne will be working with Sister Marilín during an on-boarding period until the PAB Annual Meeting in September 2022. Sister Marilín, currently serving as the PAB Board Chair, will step down from this role following the March 2022 Board meeting. She will remain a member of the Board until July 1, 2022, when she joins the staff as Portfolio Manager. The PAB will elect new leadership at its March meeting.
By Lydia Kuykendal, Director of Shareholder Advocacy,
Mercy Investment Services, Inc.
The COVID-19 pandemic has exacerbated the disparities for people of color in areas such as vaccine access and health care. Over the past two years, shareholders have expanded their corporate engagements addressing systemic racism.
This movement began as a result of the murders of George Floyd and other people of color at the hands of police. Many companies have since made pledges to address systemic racism. However, more than one year after these commitments were made, the practical outcomes remain unclear.
This year, shareholders have filed a slate of resolutions calling on multiple companies to conduct third-party racial equity audits. These internal audits evaluate how a company’s policies and practices discriminate against or disparately impact communities of color.
Shareholders have called on companies to identify and recommend steps to eliminate any business activities that “further systemic racism, threaten civil rights, or present barriers to diversity, equity and inclusion (DEI).” Shareholders also believe workers, customers, community members, and other stakeholders should inform the audit and the report.
Shareholders have also seen racial disparities between hourly and salaried employees in some companies, where salaried employees are predominately white and hourly employees are majority people of color. This disparity signals that people of color may not have the same opportunity for advancement to better paying, senior-level jobs.
In 2020, partners at the Interfaith Center on Corporate Responsibility (ICCR) filed 12 resolutions calling for racial equity audits. Resolutions were withdrawn at BlackRock, CoreCivic, Morgan Stanley and Amgen based on their commitments to conduct internal audits. The Adrian Dominican Sisters’ Portfolio Advisory Board (PAB) is looking forward to reviewing the audits as they’re completed.
This year, the PAB filed a resolution at Tyson Foods. It was recently withdrawn after the company agreed to conduct an independent third-party audit that will include stakeholder interviews and investor feedback. Shareholders filed the resolution at Tyson due to the significant impacts of COVID-19 on its workers of color.
The racial disparities often extend to company boards of directors. For 10 years, the Thirty Percent Coalition has advocated for diversity on corporate boards and company leadership that reflects the gender, racial and ethnic diversity of the United States. We believe that diverse leadership and boards lead to better experiences for employees and shareholders and improved company performance.
To combat systemic racism, corporations should recognize and remedy industry and company-specific barriers to everyone’s full inclusion in societal and economic participation. The recent Racial Equity Audit proposals, as well as ongoing dialogues that elevate awareness of business models that perpetuate systemic racism, will further the longtime work of the Adrian Dominican Sisters and other investors to create an anti-racist society.
By Eric K. Foster, RPC Co-Founder, Chair, and Managing Director
Rende Progress Capital (RPC), a racial equity loan fund and emerging Community Development Financial Institution (CDFI) located in Grand Rapids, Michigan, provides small business loans and technical assistance to excluded entrepreneurs of color. They work with African-Americans, Latinx/Hispanics, Native Americans, and Asian Americans who statistically represent the racial wealth gap and face barriers to conventional loans.
In turn, RPC is a recipient of a loan from the Adrian Dominican Sisters’ Portfolio Advisory Board (PAB). The PAB was among the first to invest in RPC.
Eric K. Foster, Chair and Managing Director, founded RPC as a result of his W.K. Kellogg Foundation Fellowship Project. He later met colleague Cuong Q. Huynh and together launched RPC in 2018. They made their first loan in the fourth quarter of 2018.
Founded and managed by professionals of color trained in racial equity, business, and law, RPC uses racial equity impact assessments in loan origination and committee review and uses its proprietary Financing Approval through Racial Equity in loan underwriting. Nearing its fourth year, RPC has grown and deployed nearly $500,000 in loans to Excluded Entrepreneurs of Color.
RPC combines racial equity and due diligence, with one loan moving to default in the third quarter of FY 2021 and annual delinquency rates well under its 0.12% to 5% threshold goal. This results in a portfolio that serves women of color, Asian Americans, Hispanic/Latinx, and African Americans within industries such as restaurants, technology, financial professional services, and communications. Seven percent are family-owned businesses, and 80 percent are first-time loan recipients.
RPC develops products for excluded entrepreneurs of color, such as the new Relief Addressing COVID and Exclusion Loan and Reduced Interest Schedule for Excellence Loan.
RPC is also intentional that its growing team reflect the fastest growing group of entrepreneurs: women of color. RPC’s new staff – portfolio manager and loan officer – are women of color.
RPC operates as an anti-racist financial institution and considers racial inequities experienced by applicants as character factors. This aligns with the vision of the Adrian Dominican Sisters to root out racist practices in our lives and systems.
RPC affirms the perseverance of applicants. Clara Guevara, owner of Maily's Dominican Salon, stated, "Rende was very personable … I still had to follow the policies and procedures, but I was able to, for the first time, have someone see me."
Dreams By Bella, owned by Isabel Lopez Slattery, specializes in photography and photo design. Even though she ran a solid company and was a good customer with her bank, Isabel could not obtain a loan. RPC had the same faith in her that she had in herself. This faith continues as RPC recently connected with the law firm Warner Norcross and Judd to help her acquire a new contract, her first major contract.
RPC invested in Reliable Medical Transport – an African American-owned non-emergency medical transportation company – guided by due diligence and the company’s focus on addressing barriers to healthcare for many people of color. Such a focus contributed to the decision to lend to Taylor’s Homecare and Grand Rapids Senior Social Exchange, RPC’s first loan to senior care sector customers.
Caption for feature photo at top: Eric K. Foster, Managing Director of Rende Progress Capital (RPC), speaks to graduates of the RPC Fifth Third Bank/CDFI Pre-Loan Readiness Incubator Program.
Sister Patricia Daly, OP, a Caldwell Dominican Sister and member of the Adrian Dominican Sisters’ Portfolio Advisory Board (PAB), recommended that congregations of women religious use their investment portfolios to further their charism, or spirit. During the annual conference of the Resource Center for Religious Institutes, she further suggested that communities use their investments to bring healing to Earth in the face of global climate change. Read the entire article by Dan Stockman in The National Catholic Reporter’s Global Sisters Report published November 18, 2021.
By Mary Minette, Director of Shareholder Advocacy, Mercy Investment Services
The banking sector is the world’s largest source of finance, with a critical role to play in ensuring that resources are available to provide climate solutions and reducing lending to climate-damaging fossil fuel projects. Investors are working to engage the largest global banks to urge the adoption of policies and procedures that address these environmental risks and to ensure that the global finance system is part of the solution to climate change.
In the 2020 and 2021 proxy seasons, investors escalated efforts to push the largest banks to assess, disclose, and reduce the climate risk and climate impact of their lending and investments. In 2020 proposals filed with several of the largest U.S. banks including Bank of America, JP Morgan Chase, and Wells Fargo requested reports on how the banks are managing climate risk in their lending portfolios. Proposals were withdrawn at Wells Fargo and Bank of America after the banks agreed to analyze various methods to measure financed emissions and consider adopting targets. The proposal with JP Morgan Chase received a near-majority vote of 49 percent at the bank’s annual meeting.
Following this successful season, Citi, Morgan Stanley, and Bank of America announced that they would work to measure the climate impact of their financial practices and agreed to strive for net zero financed emissions by 2050. JP Morgan Chase announced plans to reduce their financed emissions in line with the goals of the Paris Agreement. However, despite these announcements, a series of reports by a coalition of groups including Rainforest Action Network and BankTrack have found that many of these banks have increased their support for oil and gas production in recent years.
The International Energy Agency reported in 2021 that new oil and gas exploration and production will need to cease almost immediately for global temperatures to stay within the 1.5 degrees Celsius limit. This year, investors plan to file proposals with several of the banks, including JP Morgan Chase, the largest funder of oil and gas production globally, asking them to adopt policies to ensure that financing does not contribute to new fossil fuel supplies.
At the recent climate summit in Glasgow, more than 450 financial firms from 45 countries announced they were forming the Glasgow Financial Alliance for Net Zero (GFANZ) to help shift the world’s economy toward net-zero emissions by 2050. The group includes Citi, Bank of America, and JP Morgan Chase. While this is a welcome announcement, the details of how banks will achieve their goals are not known. A spokesman for the Rainforest Action Network noted that “39 banks that are part of [GFANZ] provided around $575 billion in lending and writing to fossil energy companies in 2020 alone.”
With the work with banks shifting from long-term targets to Net Zero goals – and particularly how they will begin to move financing away from oil and gas companies – the Portfolio Advisory Board is focusing on engagements with Bank of America, JP Morgan Chase, PNC, and Wells Fargo for the coming shareholder season.
By Associate Dee Ann Joyner
Director, Portfolio Advisory Board
October 12, 2021, Adrian, Michigan – The Portfolio Advisory Board (PAB) gathered via Zoom September 23-24, 2021, for its annual meeting. They welcomed new Board members, Carmen Mora and Joe Barker, who were both introduced on the PAB website last month. Elise García, OP, General Council liaison to the PAB, also attended her first meeting as a voting member following an amendment to the by-laws approved by the General Council in June.
The PAB also recommended to the General Council the appointment of Carla Mannings to an open position of the Board. The PAB recommended a change to the social impact environment policy to limit investments in any company receiving more than 3% of their revenues producing thermal coal or oil sands. The General Council approved both recommendations.
On Day 1 of the meeting, Judy Byron, OP, consultant on shareholder advocacy, facilitated a panel discussing pesticides and their impact on the environment. Margie Weber, a former PAB staff member and member of the Board, discussed the history of the Adrian Dominican Sisters’ advocacy activities on pesticides and genetically modified organisms (GMOs). She emphasized the long, slow process of changing corporate practices, yet the process does result in important changes.
Caroline Boden, with Mercy Investment Services, discussed the work she has been doing with the Interfaith Coalition for Corporate Responsibility (ICCR) with both food and beverage manufacturers and retailers. For example, the ICCR has gotten corporations to commit publicly to reduce their use of pesticides or at least to switch to less toxic treatments. She stressed the leverage these companies have on their supply chain and discussed success in dialogue with Campbell’s Soups and General Mills in reducing pesticide use on the ingredients in their products.
Corinne Sanders, OP, Director of the Congregation’s Office of Sustainability, discussed her office’s work on reducing pesticide use on the Motherhouse Campus. Her office ceased to use chemical-based pesticides that destroy the health of the soil and has transitioned to using neem oil to enhance fruit, berry, and nut tree growth. Neem oil only affects harmful insects, not pollinators.
In conclusion, the panel agreed on the need for a multifaceted approach to advocate consistently and continuously with companies to ensure their policies and practices reduce the use of harmful pesticides and to practice reducing our own personal use whenever and wherever possible.
Sister Judy and Pat Zerega, board consultant on shareholder advocacy from Mercy Investment Services, updated the Board on 2020-21 advocacy activities. On behalf of the Adrian Dominican Sisters, they engaged 43 companies on 65 engagement topics. The Adrian Dominican Sisters filed 17 shareholder resolutions and participated in 55 sign-on letters covering diverse topics. For example, a letter was sent to 21 food and beverage companies on issues of racial justice and food equity.
Pat and Sister Judy also presented the 2021-2022 advocacy plan which the PAB unanimously approved. The plan outlines strategies for PAB’s engagements with companies on issues such as the systemic inequities evident during COVID-19 and the quest for racial justice, as well as advocacy for policies that promote the rights of workers, food justice, and health equity. Investor statements and sign-on letters are often part of the advocacy process in these priority areas.
Day 2 focused on Community Investing. Corinne Florek, OP, Portfolio Manager for PAB, opened the meeting with a reflection excerpted from the social impact finance criteria developed by Richard Rohr’s Center for Contemplation and Action.
Sister Corinne provided historical background on the creation of the Religious Congregations Impact Fund (RCIF), for which she served as Founding Director until her retirement in 2020. Her successor, Sarah Geisler, provided an update on RCIF and its plans for future growth. The Adrian Dominican Sisters joined RCIF as a sponsor in 2017 and moved $1million from the PAB community investing portfolio to RCIF. RCIF and PAB often invest in the same non-profit organizations and collaborate in their approach to impact investing.
PAB then reviewed three loans presented by Sister Corinne. They approved the renewal of loans to Inclusiv, which provides capital to member credit unions serving low-income communities, and Fonkoze USA, a loan fund investing in small businesses in Haiti.
The Board also reviewed a new loan request from the Real People’s Fund, a collaboration among six non-profits serving the East Bay, California area. The purpose of the new Fund is to provide community capital funding to historically divested communities in the East Bay. The minimum loan term is seven years, which is longer that the Congregation’s policy of making loans for terms of one to five years. Because of its enthusiasm about the Real People’s Fund and its possible impact, the Board requested that the General Council amend the policy on the terms of loans so that they can consider approving a loan to the Real People’s Fund at a future meeting.
The last item on the agenda was a review of the community investing social impact criteria with a racial equity lens and discussion on possible changes. The Board postponed this discussion to the next meeting, giving them more time for an in-depth discussion of this important matter.
The next meeting of the PAB is scheduled for March 24-25, 2022.
October 12, 2021, Adrian, Michigan – At its October meeting, the General Council approved the Portfolio Advisory Board’s (PAB) nomination of Carla Mannings as the Board’s newest member. Carla joins the PAB Board immediately to fill an open position and begin a three-year term on July 1, 2022.
Carla is a relationship manager and Senior Vice President of the Commercial Lending Group of City First Bank in Washington, D.C. City First is the largest African American- owned bank in the United States. Before joining City First, she was Chief of Strategic Initiatives for Partners for the Common Good (PCG), with whom the Adrian Dominican Sisters have had a long relationship.
Carla is currently serving on the boards of National Coalition for Community Capital, Opportunity Finance Network, and National Disability CDFI Coalition. She has a bachelor’s degree from Howard University in Washington, D.C. and a Master of Business Administration degree from Brenau University in Atlanta.
"I have worked with Carla on the Resource Center for Religious Institutions, as well as on PCG’s board,” said Sister Corinne Florek, OP, who nominated Carla for the PAB. “She is a woman of great integrity and strong commitment to the work of justice. I feel she will bring much knowledge and experience in community investing. She is a great educator and communicator."
October 5, 2021, New York, New York – Fifteen members of the Interfaith Center on Corporate Responsibility (ICCR) drew support from 43.9% of the shareholders of Smith & Wesson for a proposal that the gun manufacturer adopt a comprehensive human rights policy in light of rising gun violence in the United States.
The Adrian Dominican Sisters, represented by Sister Judy Byron, OP, were the primary filers of the proposal. Fourteen faith-based organizations from ICCR co-filed.
In a press release, ICCR noted that this amount of support from shareholders – compared to 39% support for a similar proposal in 2019 – “demonstrates shareholders’ mounting concern with the company’s lack of attention to the growing risks of gun violence.” The proposal calls on Smith & Wesson to include in the policy “a description of the processes the company will use to identify, assess, prevent, and mitigate adverse human rights impacts.”
“Undisputedly, something must be done about the misuse of guns in our country,” Sister Judy said in her September 27, 2021, Shareholder Statement. “As a leading firearms manufacturer we genuinely believe Smith & Wesson has the knowledge and the expertise to engineer the solutions we need to reduce gun violence and save lives.”
A consultant to the Adrian Dominican Sisters’ Portfolio Advisory Board, Sister Judy went on to note that the intention of the proposal is not to put Smith & Wesson out of business or to abolish the Second Amendment. “We seek to make the business, the products, and the consumers who buy them, safer,” she said. “We seek – as everyone here must surely do – to save lives.”
September 13, 2021, Albuquerque, New Mexico — When everyday people and their families prosper, we all succeed. Our neighbors are the drivers and the foundation of their communities. It is clear that everyday New Mexicans are the true experts when it comes to knowing what they and their families need to thrive. Still, families and the voices of everyday New Mexicans all too often go unheard in the conversations that affect them the most.
For 30 years, the Partnership for Community Action (PCA), based in Albuquerque, New Mexico, has helped develop strong community leaders and advocates by investing in people and creating a strong voice in the communities they call home. Understanding that people know their own communities best, we encourage families to take ownership of the solutions and to lead the way.
By connecting communities to decision makers, we can create lasting change together. PCA is actively working to fight white supremacy and the literal and figurative violence that it breeds through anti-blackness, the erasure of Indigenous peoples, and the oppression of LGBTQ+ communities.
In 2015, PCA envisioned a redevelopment project centered on racial equity in Albuquerque’s South Valley, a community that has been divested from for generations. Through thoughtful and intentional community engagement with local residents, the idea of the Social Enterprise Center (SEC) was born. The project is an innovative approach to economic development, funded by public and private partnerships and led by PCA and the Southwest Creations Collaborative who have a combined history of more than 55 years of developing community-centered solutions.
The SEC will immediately employ more than 50 people on a family-friendly campus that includes nearly 20,000 square feet of commercial space. Services include a manufacturing facility operated by Southwest Creations Collaborative, childcare space for the employees within the SEC, a family/community engagement and training center, and educational support services for families.
Notwithstanding the major challenges our organizations have experienced during the pandemic, both PCA and Southwest Creations Collaborative have continued their programs and services for families. The SEC will be an innovative model that serves the economic and social needs of the community during a time when economic security and family wellbeing is at the forefront of major policy decisions. We look forward to being a part of the solution for families in our community as we rise out of this pandemic.
The Social Enterprise Center is scheduled to open in the fall of 2021.
Feature photo: Construction begins on the Social Enterprise Center, located in the heart of the South Valley in Albuquerque, New Mexico.
Portfolio Advisory Board, Adrian Dominican Sisters | 1257 E. Siena Heights Drive | Adrian, Michigan 49221
Phone: (517) 266-3523 | Email: