Activists' investments have come from fossil fuels.  What about guns?

Activists’ investments have come from fossil fuels. What about guns? – Mail Bonus

The message after the massacre, this time in a Texas elementary school, was clear: People who want to put an end to gun violence should “vote in November.” Senator Chuck Schumer, DN.Y., the leader of the majority, said this on Wednesday.

But not everyone has to wait until then. Now on Wednesday, when Connecticut-based gunman Sturm’s shareholders sign up for the company’s virtual annual meeting, they can vote on a shareholders’ proposal that says “in the natural death of firearms,” ​​Ruger must hire an outside company. to examine its impact on human rights, “in addition to laws and regulations.

The human rights investigation is an unlikely crusade for Ruger, as are the efforts of Smith & Wesson, another rare gun company in general business in a largely opaque industry. The non-binding proposals put a nun, who is at the forefront of one activist, and a hospital director, who leads another, against gun manufacturers who have so far refused to compromise.

They may not be typical Ruger investors, but they represent a certain type of investment activist: buying shares in a public company to have a say in how it is run.

Shareholder action can mean a lot. Some activists want to take over a company and manage it differently for financial reasons. Some, like those who encourage Ruger to study human rights, invest in companies to force them to change social issues.

On Wall Street, the ESG range is expanding. It stands for environmental, social and governance governed by companies, and making decisions from an ESG perspective leads some investors to avoid certain industries, including fossil fuels, private prisons and tobacco, while others are passionate about institutional change.

In Ruger’s case, investors led by CommonSpirit Health, a non-profit hospital chain based in Chicago, want the company to assess the human rights impact on their products and business practices. The support is part of a larger effort coordinated by the Interfaith Center on Corporate Responsibility.

Ruger has no public relations department. The company’s representatives did not respond to phone calls and emails requesting comments.

“If we can move companies, it’s a huge leverage for systemic change because of the money and power that American business really has today,” said Laura Krausa, director of CommonSpirit’s advocacy.

Krausa and its allies have little to lose and a growing precedent to set for effective support for corporate behavior.

Increased emphasis on ESG issues has led banks and other financial institutions to reduce funding for the most polluted fossil fuels. It has also forced countless companies to diversify corporate boards by adding more women and minorities.

The changes brought about by individual shareholders’ resolutions are not significant in themselves. But together, they have made companies more aware of how their actions affect the wider world.

Shareholders’ willingness to vote on ESG-based proposals is growing. In 2021, for example, 44% of shareholders in Smith & Wesson voted in favor of an investor proposal to adopt a human rights policy. It was higher than 36% of shareholders who supported a similar proposal submitted in 2019.

“This is a kind of complete Mary,” said Dr. Jonathan Metzl, director of the Department of Medicine, Health and Society at Vanderbilt University, whose research focuses on guns in America. Shareholders’ conclusions are weak, Metzl said, because they can only affect one company at a time and without broader, more coordinated pressure, individual gun manufacturers have no incentive to act.

Ruger opposes the existing human rights proposal and has described CommonSpirit’s interest in the company’s actual day – to – day business as low. “Despite the lack of ownership of corporate shares, proponents of the agency’s system are using the gun control that they have not been able to achieve through legislation and other means,” Ruger wrote, urging shareholders to vote down the proposal.

Even if it passes, the resolution will not force the company to act. But activist investors see any impact on the gun industry as better than none.

The recent history of agitation for change from companies, as gun advocacy advocates put it, is largely a story of failure.

When Ed Shultz, the CEO of Smith & Wesson in the late 1990s, made a deal with the Clinton administration to approve new security measures for his products, the retailers and the National Rifle Association company shunned it, almost bankrupting him and driving Shultz out of the industry.

When companies like Citigroup, retailer Dick’s Sporting Goods and Delta Air Lines have declared support for arms control measures and promised to promote gun safety by changing their own business practices, groups like the NRA have fought against them.

However, it can be harder to ignore investors. Boards have a duty to listen and respond.

In 2018, it received a measure that encouraged Ruger to conduct a study on the safety of its products by a majority of shareholders’ votes, and the company responded with a twenty-page report.

“The catastrophic misuse of firearms is a complex social issue, immune to a solution with more laws or new technology,” the report said. “We have long warned that there is no such thing as a fireproof gun and there is no substitute for personal responsibility and common sense in the safe handling, use and storage of firearms.

Activists said it did not really answer their questions, but at least it was a start.

Some investors have also campaigned for the removal of Ruger’s executives, including Sandra Froman, a former NRA president who the left-leaning Majority Action group said had worked with physicist William Shockley in the early 1970s to make his theories about the inherent inferiority complex of blacks people publicly. appetizing.

Froman said at the time that she did not remember working with Shockley.

Major asset managers such as BlackRock, State Street, Vanguard and Charles Schwab, as well as Renaissance Technologies’ volume fund managers, are a large part of Ruger’s shareholders. On Wednesday, Krausa sent an email to some of these major shareholders asking for their support.

Representatives of each company said they could not comment on how they would vote. But on Thursday, Vanguard’s management held a phone call in which Krausa and others presented their case for review.

Proponents of her case have been working to make the actual transcript of this statement available online. But they see it as better than the current position of the head in the sand.

“This resolution is in a position to help the company understand its role in dealing with a crisis of enormous proportions,” she said of the CommonSpirit human rights assessment proposal.

Metzl saw little prospect of change. It did not help, he said, that stockpiles had flourished during the coronavirus epidemic, as gun sales increased and pictures of people waiting in line around the block to buy them asked manufacturers to increase their production.

“We should try everything we possibly can,” he said, “but I would say that if this is the only way, then it is a reflection of a much bigger problem.

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