Azzad engages in shareholder advocacy on behalf of our clients by voting proxies and by filing resolutions and sending investor letters. Below you can find brief summaries of the investor letters we sent and the resolutions we filed for consideration at 2019 company meetings.
Shareholder advocacy refers to actions taken by shareholders to ask the companies whose stock they own to take an action or change behavior for the public good. One common way to do this is to propose shareholder resolutions to the company’s management to be brought to a vote at the company’s next annual general meeting. An individual or institution may file a shareholder resolution as long as they hold at least $2,000 worth of a company’s stock continuously for one year before filing and continue to hold at least $2,000 worth of stock through the date of the company’s annual general meeting. You can file resolutions with as many companies as you like during a given filing season; however, you can only file one resolution per company using your shares.
Shareholder resolutions may appear along with the company’s proposed changes on its proxy ballot, which all shareholders have a right to vote on. Mutual fund companies vote proxies on behalf of their clients. If you’re concerned about ethical issues with investing, it’s a good idea to find out how your mutual fund company votes.
You can find Azzad’s proxy voting guidelines here.
ALPHABET (parent company of Google)
Issue: Human rights impact of a potential censored search product for China
Background: In March 2010, Google announced it would stop censoring search services in its Chinese search site and would redirect users to a site offering uncensored search. In August 2018, however, the Intercept reported that Google was developing a censored search engine — code-named Dragonfly — for the Chinese market that would comply with China’s repressive censorship laws and “blacklist websites and search terms about human rights, democracy, religion, and peaceful protest.”
Dragonfly could also further enable the already intense surveillance and tracking of Chinese citizens. For example, government intrusion into the lives of residents of the Xinjiang region in western China has expanded to what the Associated Press described as “[a]ll-encompassing, data-driven surveillance.” In this environment, we believe there are serious human rights implications inherent in a technology service company doing business in China.
Request: The resolution asks Alphabet to publish a human rights impact assessment examining the actual and potential impacts of a censored Google search product in China.
Azzad is the lead filer on this resolution. We were joined by eight co-filers.
Issue: Stop selling facial recognition technology to law enforcement agencies
Background: Shareholders are concerned that Amazon’s facial recognition technology, called “Rekognition,” poses a risk to civil and human rights and to shareholder value. Amazon is reportedly marketing Rekognition to ICE, despite concerns Rekognition could facilitate immigrant surveillance and racial profiling.
Request: The resolution asks Amazon to halt sales of Rekognition to government agencies unless Amazon’s board concludes, after an evaluation using independent evidence, that the technology does not cause or contribute to actual or potential violations of civil and human rights. The filers recommend the board consult with technology and civil liberties experts and civil and human rights advocates to assess:
— The extent to which such technology may endanger or violate privacy or civil rights, and disproportionately impact people of color, immigrants, and activists, and how Amazon would mitigate these risks.
— The extent to which such technologies may be marketed and sold to repressive governments, identified by the United States Department of State Country Reports on Human Rights Practices.
The resolution was filed by the Tri-State Coalition for Responsible Investment. Azzad co-filed.
BOOZ ALLEN HAMILTON
Issue: Develop and adopt a corporate human rights policy
Background: In November 2018, reports surfaced that, as part of a contract with the government of Saudi Arabia, Booz Allen has assisted in training Saudi sailors who participated in the blockade of Yemen, which is facing mass starvation and cholera outbreaks. We also remain concerned that training the company has provided to cyberfighters in Saudi Arabia could be used to intimidate and silence critics globally. We believe that Booz Allen would benefit from a formal human rights policy to guide the company as it works on government contracts in areas of the world where human rights violations are commonplace.
Request: The resolution asks Booz Allen to develop and adopt a comprehensive human rights policy that includes an explicit commitment to support and uphold the principles and values contained in the United Nations’ Guiding Principles on Business and Human Rights.
Azzad was the lead filer.
We withdrew this proposal after a successful dialogue with Booz Allen.
Issue: No business with governments complicit in genocide — Burma
Background: The government and military of Burma (Myanmar) is committing human rights violations against its Rohingya ethnic minority to an extent that the UN has said amounts to crimes against humanity. In 2015, Chevron entered into a contract with the state-owned Myanmar Oil and Gas Enterprise to explore for oil in the Rakhine Basin.
Request: The resolution asks Chevron to evaluate the feasibility of adopting a policy of not doing business with governments that complicit in genocide or crimes against humanity as defined by the U.S. Department of State.
Azzad first filed this resolution in 2016; it was the first shareholder resolution focused specifically on the Rohingya to be filed with a U.S. corporation.
Azzad was the lead filer; five other socially responsible asset managers co-filed.
We withdrew this proposal after a successful dialogue with Chevron.
Issue: Lobbying disclosure
Background: Equifax spent $1.07 million in federal lobbying in 2017 (Source: opensecrets.org). Equifax has steadily increased its federal lobbying spending over the past 10 years. We are concerned that Equifax’s lobbying may pose reputational risks, especially in the aftermath of its 2017 data breach (Source: “Equifax lobbied for easier regulation before data breach,” Wall Street Journal, September 11, 2017). Equifax shareholders don’t know how much the company is spending at the state level. Equifax does not disclose its membership in or payments to tax-exempt organizations that write and endorse model legislation, such as the American Legislative Exchange Council (ALEC).
Request: The resolution asks Equifax to disclose its direct and indirect lobbying activities and expenditures to assess whether Equifax’s lobbying is consistent with its expressed goals and in the best interest of shareholders.
The resolution was filed by Friends Fiduciary. Azzad co-filed.
We withdrew this proposal after a successful dialogue with Equifax.
Issue: Lobbying disclosure
Background: Honeywell spent $42 million from 2010 – 2016 on federal lobbying. These figures do not include lobbying expenditures to influence legislation in states, where Honeywell also lobbies but disclosure is uneven or absent. Honeywell does not currently disclose in full its lobbying activities or its memberships in, or payments to, trade associations.
Request: The resolution asks Honeywell to disclose its lobbying policy and procedures as well as Honeywell’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
Azzad was the lead filer. We were joined by one co-filer, Mercy Investment Services.
MONSTER BEVERAGE CORPORATION
Issue: Human trafficking and forced labor in sugar supply chain
Background: An estimated 40 million people are victims of modern slavery, with 24.9 million in forced labor. These victims work in virtually every industry and across sectors in a company’s supply chain. According to the U.N. Guiding Principles, companies have a corporate responsibility to respect human rights within their operations and supply chains.
The 2018, Know the Chain’s Food & Beverage Benchmark Findings Report scored Monster at four points, acknowledging that Monster has improved over its 2016 score of zero. This shows that Monster has made some commitments regarding modern slavery. However, the commitments are not time-bound and Monster doesn’t disclose if any progress has been made. This reflects poor transparency and disclosure in managing human trafficking and forced labor risks in its supply chain. In contrast, Coca-Cola, Nestlé, and Pepsico, scored 62, 58, and 49 respectively.
Request: The resolution asks Monster to issue a report containing the criteria and analytical methodology used to determine its conclusion of “minimal risk” of slavery and human trafficking in its sugarcane supply chain.
As You Sow was the lead filer. Azzad co-filed the resolution.
We withdrew this resolution after a successful dialogue with Monster.
Booz Allen Hamilton: Stop providing training to the Saudi military while that country continues its blockade of Yemen, which is causing one of the worst humanitarian disasters in the world.
The letter was written by Azzad and signed by investors representing more than $8 billion in assets under management.