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.

 

By Mary Minette
Mercy Investments Consultant

December 8, 2023, New York, New York – The Interfaith Center on Corporate Responsibility’s (ICCR) annual Fall Conference took place October 3-5, 2023, in New York City and featured a variety of speakers and events that related to the work of the Adrian Dominican Sisters Portfolio Advisory Board (PAB). 

The event also provided an opportunity to celebrate the contributions and retirements of Sister Judy Byron, OP, Director of the Northwest Coalition for Responsible Investment, and Pat Zerega, Senior Director of Shareholder Advocacy for Mercy Investment Services. Both have provided many years of staff support to the PAB. 

Defending shareholder rights was a central topic of this fall’s ICCR gathering because of the growing number of bills introduced at the state and federal levels, aiming to prohibit investor consideration of Environmental, Social, and Governance (ESG) factors. (For an explanation of ESG investment and anti-ESG bills, read this recent article.) With 2023 ESG shareholder proposals seeing decreased support, investors discussed potential actions, namely offering public support for the SEC’s forthcoming disclosure rules and engaging large asset managers on their voting practices. 

Another session focused on providing investors with tools to engage asset managers on proxy voting. Following the recent rise of anti-ESG sentiment, asset managers significantly decreased their support for shareholder resolutions in their 2023 proxy voting. Asset managers oversee the holdings of investors, their clients, assuring that their decisions on behalf of the investors are made in good faith, aligned with the client’s responsible screening criteria.

ICCR members are urged to engage their asset managers on disclosure of voting policies, with progressive escalation steps for unresponsive managers, including switching assets to a competitor if the asset manager refuses to act.

In another emerging issue, a panel of presenters discussed the growth of Artificial Intelligence (AI), mindful of its impacts on society and democracy. The keynote speaker, Nathalie Maréchal from the Center for Democracy and Technology, explained that the most important decision is when not to use AI in modern work, citing the rise of disinformation, fraud, and misuse of data.

ICCR members continue to advance worker justice issues, and the conference included a session on advocating for companies to provide a living wage. The session’s panel members included an associate at a large retail chain who provided insight into the challenges facing workers, such as low wages, minimal benefits, and employer retaliation for employee criticism. 

A researcher on the panel illustrated the negative impact that underpaying workers can have on long-term shareholder value, as studies show that a living wage supports employee retention and productivity. 

The Racial Justice Investing Coalition moderated a session on racial justice-focused investing and its impact on fostering a stronger democracy. The session provided investors with a chance to learn about best practices from investors already working on this issue.

Another panel offered a presentation on pressing for corporate action on environmental justice and emphasized centering racial equity in climate work, engaging local communities in joint decision-making, and holding parent companies accountable for pollution from owned facilities.

In another session on company accountability, speakers addressed human rights due diligence (HRDD) and responsible contracting. Speakers explained the importance of supply chain contracts, highlighting that shifting risk onto a supplier is not the same as risk management. The panel members recommended that investors advocate for responsible contracts that feature shared commitments and prioritize human rights. 

The ICCR conference provides a valuable opportunity to strategize with fellow faith-based investors for the current shareholder advocacy season.
 

Caption for feature photo at top: Attending the ICCR conference are, from left, Sister Susan Mika, OSB, Sister Ann Scholz, SSND, Sister Judy Byron, OP, Timnit Ghermay and Sister Marilín Llanes, OP.

The Portfolio Advisory Board held its Fall meeting in late September at Weber Retreat and Conference Center, where Board members attended to business items, shared the year’s accomplishments regarding shareholder advocacy and community impact investing, and engaged in strategic planning. PAB member Mary Priniski, OP, opened each day with inspiring reflection and prayer. 

Business Items

Sister Marilín Llanes, Director of PAB, provided an update on plans for PAB’s 50th anniversary, to be celebrated on September 26, 2025. A synopsis of the plan is pending approval of the Board in November.

New voluntary staff and Board members were introduced:

• Associate Dee Joyner will serve in the volunteer role of Senior Advisor to PAB for Special Projects. She will help facilitate the adoption and implementation of the 2023-2026 strategic plan and support the planning of the 50th anniversary. 

• Kayoko Lyons, CFA, and Petra Vujakovic from the Cabrini Missionary Sisters Impact Investment Fund will assist with community impact investing.  

• Sister Judy Byron, OP, and Rev. Dr. Sidney Williams Jr. were unanimously recommended as new members of the Board and were confirmed by the General Council. They filled two vacant seats on the Board due to the passing of Pat Daly, OP, last year and the resignation of Corinne Florek, OP, as portfolio manager.

Shareholder Advocacy

Pat Zerega and Mary Minette, PAB consultants with Mercy Investment Services, presented a report on their activities for the 2023 proxy year. They had 66 engagements  – such as meetings and negotiations – with companies in the PAB’s focus areas of protection of human rights, healthy persons and communities, and environmental sustainability. In addition, 18 shareholder resolutions were filed: nine in human rights, three in healthy persons, and six in environmental sustainability. 

One constructive engagement (with Dollar General) garnered a high vote from shareholders of 67.7% regarding practices on the safety and well-being of workers. In addition, the Adrian Dominican Sisters supported signing on to 39 letters, joining other faith-based investors in expressing viewpoints on actions of various companies at odds with our social impact criteria.

Mary reported on the anti-ESG (Environmental, Social, and Governance) movement and its impact on different sectors. For example, there are growing attacks against Climate Action 100+/Net Zero Asset Managers who are falsely accused of violating anti-trust /consumer protection laws. Another area highlighted the economic impact in states that have anti-ESG policies. These policies have forced divestment and decreased returns for pensioners in five states with a negative financial impact estimated at $20 billion. 

This was Pat’s last meeting due to her upcoming retirement. Mary Minette will be the permanent Mercy Investments Consultant to PAB.  

Community Investing

Sister Marilín presented an update on the PAB community impact loan portfolio, presented two loans for renewal, and presented three new loans for approval.

The PAB approved the following loans for renewal:

• Community Vision Capital and Consulting has been a borrowing partner with ADS since 1988. This CDFI invests in strengthening low-income neighborhoods and enabling underserved communities to build more racial and economic equity in more than 46 counties in Northern California.

• The Cooperative Fund of the Northeast (CFNE) and PAB have been in partnership since 1987. This CDFI facilitates socially responsible investing in cooperatives, community-oriented nonprofits, and worker-owned businesses in New England and adjacent communities in New York.

New loans were approved for the following borrowing partners:

• Capital for Change Fund (C4C) was formed in 2016 by the merger of the Greater New Haven Community Loan Fund (GNHCLF), Connecticut Housing Investment Fund, and Community Capital Fund. Capital for Change (C4C) is the largest full-service CDFI in Connecticut, serving a wider bandwidth of people, nonprofits, businesses, and public institutions in need.

• Lawndale Christian Development Corporation (LCDC) was established in 1987 by the Lawndale Christian Community Church to fulfill the call to justice in Micah 6:8. LCDC organizes with the community to eliminate health and wealth disparities in North Lawndale, Illinois. LCDC develops and manages affordable mixed-use housing, creates homeownership for working families, and builds cooperative businesses. 

• The African American Alliance’s Black Renaissance Fund (BFR) was formally established in 2020 by the African American Alliance of CDFIs CEOs of Black-led CDFIs. It is committed to closing the wealth gap in Black communities in the United States and identifying opportunities that will result in greater investments in the organizations they lead. The BRF secures grant and debt capital at very low interest rates, allowing members to strengthen their balance sheets, build more loan capacity, and generate more revenue through interest income. 

Celebrating Associate Dee Joyner and Consultant Pat Zerega

PAB was joined by members of the General Council and invited guests to express gratitude to Pat Zerega and Associate Dee Joyner for their many contributions to PAB upon their retirement. Dee retired on July 1, 2023, as Director of the Portfolio Advisory Board, and Pat will be retiring as a Shareholder Advocacy Consultant on October 1, 2023. Cynthia Crim, PAB Chair, and Carmen Mora, Co-Chair,  thanked Pat on behalf of the PAB. Corinne Sanders, OP, PAB General Council Liaison, expressed gratitude to Dee for her many service years with the Congregation in both PAB and the Resilient Communities endeavor. A toast and blessing were offered, followed by a celebratory dinner in honor of Dee.

Strategic Planning

Associate Dee Joyner engaged Board members in discussing the proposed Theory of Change Framework recommended by the Strategic Planning Committee.  

Members reviewed the Theory of Change Framework and definitions of component parts during a daylong process of engagement, working in small and large groups. The four overarching themes for the strategic plan are shareholder advocacy, community impact investing, alignment of the work of PAB for greater impact, and collaboration with internal and external partners. Recommendations were sent to the Strategic Planning Committee to refine and bring back to the Board for a vote by December 2023.

Please see the PAB website for articles on our borrowing partners and shareholder advocacy activities, which are updated monthly.

 

Feature photo at top: Members of the Portfolio Advisory Board are, from left, Kristine Cooper, Office Manager; Judy Byron, OP, Consultant; Joseph Baker II; Corinne Sanders, OP, General Council Liaison; Carla Mannings; Marilín Llanes, OP, Portfolio Manager; Mary Priniski, OP; Pat Zerega, Consultant; Cynthia Crim, Chair; Dee Ann Joyner, Director; and Carmen Mora, Vice Chair.

By Mary Minette, 
Consultant, Mercy Investment Services

The pillars of environmental, social, and governance (ESG) form a basis for responsible investing that prioritizes the long-term health of our economy, societies, and planet. This has been a key component of the approach of the Portfolio Advisory Board (PAB) since its inception as an important expression of alignment between the investments and the mission of the Adrian Dominican Sisters.

As ESG investing has grown as a share of the overall market, an anti-ESG movement has developed among some politicians and state treasurers, who decry such investments as “woke” capitalism.

New legislation in some states prohibits state contracts and investments with investment firms that use environmental or social indicators to inform investment decisions. Sometimes, government entities may not enter contracts for goods or services without written verification that the vendor will not boycott fossil fuels. Legislation of this nature has been introduced in 37 states, targeting investors who have made climate commitments.

In July, the US House of Representatives Financial Services Committee held a series of hearings called “ESG Month” that targeted ESG investors. They introduced bills designed to curtail social and environmental investment and the regulatory powers of the Securities and Exchange Commission to allow for greater disclosure of ESG information. None of these bills is expected to move to the Senate during this session of Congress, but they represent a disturbing trend that would curtail the ability of investors to choose how and where they invest.

In early June, the PAB joined 77 fellow Interfaith Center for Corporate Responsibility members in a letter asking members of Congress to publicly speak out against these anti-ESG campaigns and efforts to derail environmental and social progress resulting from shareholders’ efforts. The letter encourages members of Congress to advocate for prudent, non-partisan investment practices and to consider the financial damage to state and municipal pension funds due to the anti-ESG legislation.

The PAB will continue to advocate for the importance of addressing these factors in investing and engagement.

 

By Lydia Kuykendal,
Mercy Investment Services

Drug costs in the United States remain one of the main reasons Americans have the world’s most expensive health care. Intellectual property protections on branded drugs play an important role in maintaining high prices and impeding widescale access to medicine. 

Intellectual property describes the rights to creative and intellectual efforts and includes copyright, designs, patents, and trademarks. In the pharmaceutical industry, this often involves patents that cover manufacturing processes, dosing regimens, and product formulations.  

When patent protection on a drug ends, generic manufacturers can enter the market with a lower-priced formulation that generally results in increased access to the consumer. For this reason, branded drug manufacturers often deploy a variety of strategies to delay generic competition and extend their exclusivity periods. 

This year, the Adrian Dominican Sisters’ shareholder resolution at pharmaceutical companies addresses a major factor in these costs: the pharmaceutical industry’s patent practices – specifically, patent thickets. 

Patent thickets are the practice of applying for and amassing multiple patents on a single product. Pharma companies create these thickets of dozens to even more than 100 patents around a single product to intimidate and sue their potential competitors out of the market. This lack of market competition raises prices, with U.S. prices for branded drugs nearly 3.5 times higher than in 32 member countries of the Organizations for Economic Co-operation and Development (OECD).  

The cost makes many prescriptions unaffordable, and nearly 1 in 3 Americans has opted not to fill a prescription – or to split pills, ration doses, or take an over-the-counter drug instead – because of the cost. This pricing structure is devastating to patients who rely on these medicines. In some cases, their lives depend on access to these medicines. 

Sister Judy Byron, OP

“Members of Interfaith Center on Corporate Responsibility (ICCR) have been engaging the pharma sector for decades to advocate for changes in policies and practices that will increase the access and affordability of medicines,” said Sister Judy Byron, OP, of the Northwest Coalition for Responsible Investment, which led the filing of the proposal at Gilead Sciences. Gilead manufactures medications used to treat COVID-19, HIV, cancers, and more. “These patent practices erect barriers to access that clearly prioritize company profits over people's health. As shareholders, we view this as fundamentally at odds with the purported missions of our companies.”  

This resolution asks four pharmaceutical companies to explain how their patenting strategies impact patient access and to enhance their disclosures of the relationship between patents and patient access. We seek to understand whether companies consider access and affordability when applying for additional patents on a product. 

The resolution received significant shareholder support at Pfizer (30.2%) and moderate support at Gilead Sciences (16.5%), Johnson & Johnson (14.4%), and Eli Lilly (10.4%). The Portfolio Advisory Board will continue to use these shareholder votes to push companies to ensure access and affordability of their products.

By Sister Judy Byron, OP Consultant, Portfolio Advisory Board 

The 2023 shareholder engagements of the Portfolio Advisory Board (PAB) of the Adrian Dominican Sisters will carry out the Enactments of our 19th General Chapter, held in June 2022. In addition to electing our new leadership, more than 200 Sisters of the Congregation affirmed our focus for the next six years on areas including diversity, sustainability, and women. 

In our 2023 Shareholder Advocacy Plan, the PAB committed to raise up systemic inequities and the quest for racial justice in corporate board rooms, where we will advocate for policies and practices which respect human rights and promote worker justice, food justice, health equity, and a transition to a low-carbon future. 

Focusing on our Adrian Dominican Enactment on Diversity to “act to dismantle unjust systems; and build the beloved community in which everyone is cared for, absent of poverty, hunger, and hate,” we engage Walmart and Dine Brands (Applebee’s and IHOP) on providing adequate wages and benefits for their employees. Research by the Institute for Child, Youth and Family Policy at Brandeis University found that more than one-third of U.S. families that work full-time year-round do not earn enough to cover a basic family budget. More than half of Black and Hispanic families cannot afford basic needs. 

We plan to continue addressing information and communications technology companies, Alphabet and Meta Platforms (Facebook), on child sexual exploitation online. In 2021 the National Center for Missing and Exploited Children’s Cyber Tipline received 29.3 million reports of suspected child sex abuse materials online. Some 92.2% of the reports involved Meta mobile apps Facebook, WhatsApp, and Instagram. 

In support of the human right to health and the dignity of each person, we ask pharmaceutical companies to adopt a human rights policy which includes the right to the highest standard of health for all with a focus on women, Indigenous Peoples, and those living in poverty and to develop drug pricing strategies that support affordability and access for all. Companies that we engage include Eli Lilly, Gilead Sciences, Johnson and Johnson, and Pfizer. 

Acting on our Sustainability Enactment “to address the cry of Earth and the cry of those who are poor,” we engage companies to assess the impact of their operations on society, the local economy, and the environment. We especially focus on the most vulnerable, including women, Indigenous Peoples, communities of color, and people who are impoverished. 

We ask fossil fuel companies to adopt technologies to monitor and reduce methane emissions. The Environmental Defense Fund says that “cutting methane emissions is the fastest opportunity we have to immediately slow the rate of global warming, even as we decarbonize our energy systems.” In addition we ask fossil fuel companies to improve their public disclosure and transparency reporting, including plans to comply with a regulatory scenario that holds global temperature rise below a 1.5 degrees Celsius threshold. Companies in this sector include Exxon Mobil and Marathon Petroleum. 

The PAB is a member of the Interfaith Center on Corporate Responsibility (ICCR), which pioneered the use of shareholder advocacy more than 50 years ago. “Inspired by faith, committed to action” to build a more just and sustainable world, ICCR members in the 2022 proxy season engaged hundreds of companies with thousands of dialogues and with more than 500 shareholder resolutions. We reached agreements with companies to implement the resolution requests for 174 proposals; the majority focused on climate issues and racial justice. 

 

The Forum for Sustainable and Responsible Investment Foundation reports that faith-based and healthcare organizations represent 4% of assets at major companies, yet they file 36% of resolutions, making them a powerful voice at corporations around the world. 

For decades, the Adrian Dominican Congregation, through the Portfolio Advisory Board (PAB), has been part of this work: filing resolutions, engaging companies, and speaking to corporate boards at their annual meetings. This work has been done in coalition with other faith-based shareholders from the Interfaith Center on Corporate Responsibility (ICCR), where members often pool their holdings to have a seat at the table. 

This longtime work has resulted in hundreds of examples of companies changing their policies and practices after constructive engagement with shareholders. ICCR members have championed positive changes in areas such as annual director elections, supply chain risk and impact reporting, political and lobbying spending disclosure, climate risk reports, and due diligence practices for human rights risks.

In 2020, the Securities and Exchange Commission (SEC) enacted new rules that severely restrict small shareholders in the resolution process. In the past, shareholders could pool their ownings to reach the $2,000 worth of stock that needed to be owned for one year in order to file a resolution. 

The new rule bars shareholders from pooling stocks, and an individual organization must own at least $2,000 of the company’s securities for at least three years. The new rules offer no provisions for shorter ownership, such as owning at least $25,000 for at least one year to file a resolution. 

The SEC also changed the minimum vote to return a resolution the following year. A first-year resolution must now get 6% vote support, up from 3%. By the third year, a resolution must receive 25% vote support – a tall order for many resolutions on social issues. 

In 2021, ICCR and several other investor groups entered litigation to rescind the rule changes. The PAB offered several examples of how the changes would negatively impact their work. Unfortunately, the courts have postponed the ruling several times, now indicating a decision in late November, subjecting the current shareholder filing season to the more stringent filing rules. These limitations curtail the voice of small shareholders and place additional constraints on the PAB’s work for the 2023 season.

It’s important to note, the engagement process is more than just filing shareholder resolutions. The ongoing dialogues and long-term relationships that are a hallmark of the PAB mean that much of our work continues. Companies are aware that very often we as faith-based shareholders are like “canaries in a coal mine” or an “early warning system.” We hear the social and environmental concerns from partners and advocates on the ground and see the world with a moral lens; thus, we raise issues that may not have yet made it to the C-Suite level. 

As this article is posted, the PAB is considering the 2023 shareholder season work plan, engaging to effect change toward justice in the policies and operations of corporations in which we hold investments.

 

Article by Pat Zerega
Portfolio Advisory Board Consultant
Mercy Investment Services 

 

 

 

 

By Sister Judy Byron, OP, PAB Consultant

Just two weeks after witnessing the murder of her teacher and classmates, fourth grader Miah appeared before the House Committee on Oversight and Reform. She shared how she and her classmates were celebrating the end of the school year with a movie when a gunman burst into their lives. Miah went on to describe how she smeared herself with the blood of her friends to appear dead and used her teacher’s phone to call 911 for help. We know that her call was in vain. No one came to save the children.

For five years now, faith-based shareholders led by the Adrian Dominican Sisters and CommonSpirit Health have been calling on firearm manufacturers Smith & Wesson and Sturm Ruger to play a positive role in developing firearms and shaping legislation that would benefit their business and the health and safety of our citizens. Like Miah’s call to 911, our request has gone unanswered.

In 2018, a majority of shareholders supported our resolutions with Smith & Wesson and Sturm Ruger, requesting a report on the company’s activities related to gun safety measures and the mitigation of harm associated with gun products. The reports were disappointing in that they failed to put forward meaningful solutions to address gun violence.

For the past four years we have been calling on Smith & Wesson to adopt a policy articulating a commitment to respect human rights, which includes a description of a due diligence process to identify, assess, prevent, and mitigate actual and potential adverse human rights impacts. In 2021, 44 percent of shareholders supported the proposal. The resolution will be presented for a vote again this year at the company’s annual meeting in September.

This year, on June 1, CommonSpirit Health led a resolution, co-filed by the Adrian Dominican Sisters, urging the Sturm Ruger board to oversee a Human Rights Impact Assessment which assesses and produces recommendations for improving the human rights impacts of its policies, practices, and products. It was supported by 69 percent of the Company’s shareholders. 

“This shareholder majority in favor of the proposal invites Sturm Ruger to consider what it can do to contribute to solutions to the preventable epidemic of gun violence,” said Laura Krausa of CommonSpirit Health. “We refuse to believe there is nothing we can do to reduce gun violence. We know we can find common ground on common sense approaches that respect the right to own a gun, and also the obligation to help keep our neighbors safe and healthy in the face of this epidemic of gun violence." (source)

Although the police didn’t come when Miah called for help, in the hours and days after the tragedy at Robb Elementary School, the children, families, and community of Uvalde have been held in a circle of care. This circle includes shareholders of firearm manufacturers; faith communities; citizens who demonstrated for sensible gun reform; and the U.S. Congress, which took steps to address gun violence for the first time in 30 years. Together, we will answer our children’s cry for help, their plea to be safe in their schools and communities. 

 

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.