February 14, 2012
ICCR Focuses on Dialogues More than Resolutions in Corporate Engagement
by Robert Kropp
SocialFunds.com talks with Laura Berry about the Interfaith Center on Corporate Responsibility's
shift in emphasis from filing shareowner resolutions to corporate engagement through dialogues.
When SocialFunds.com talked with Laura Berry, Executive Director of the Interfaith Center on Corporate Responsibility (ICCR), following the
2011 proxy season, she said, "The only real win is withdrawn resolutions, when companies look to us
as a focus group for risk management."
In fact, a look at this year's 2012 Proxy Resolutions and
Voting Guide reveals that ICCR's philosophy on corporate engagement has undergone a more
fundamental evolution. The number of resolutions filed by ICCR members, which totaled 308 as
recently as 2010, has decreased to 160 thus far in 2012. Members also report that they are engaged
in 170 ongoing dialogues with corporations.
Clearly, a change in tactics has
occurred at ICCR, from the more adversarial practice of filing shareowner resolutions to quiet
engagement which, Berry told SocialFunds.com in a recent conversation, is often framed by the Chatham House
Rule, "to encourage openness and the sharing of information."
Berry was quick to point
out that ICCR members continue to vote their proxies in favor of shareowner resolutions filed by
like-minded institutional investors. As the Guide states, "Proxy resolutions are one of many levers
employed in shareholder advocacy, effective for bringing investor concerns to the more public forum
of the company's annual shareholder meeting."
"There are a bunch of people working on
shareholder proposals, and we're excited about all the work being done in the space," she said.
Berry then described the process that led to ICCR's evolved approach to corporate engagement.
"In 2008, after a period of nine months and with the input of more than 100 people, we adopted
a new strategic plan," she said. "We intentionally got about a third of the input from
underrepresented voices who had visions of justice and sustainability aligned with ours."
The new strategic plan emphasized that "We seek a global community built upon on justice and
sustainability through the transformation of the corporate world," she continued. "When you start
to use language around transformation and collaboration, it starts to leave the field of
adversarial conversations and pushes us toward everyone having a stake in transformation."
Which is not to say that corporations are let off the hook for such common practices as a
failure to account for externalities. The list of 2012 shareowner resolutions posted on
ICCR's website, for example, includes environmental sector rankings provided by Trucost, a leading environmental research firm.
took on the work of increasing more research-driven and well-informed dialogues with corporations,
policymakers, and regulators," Berry said. "We needed to develop cross-sectoral approaches to
systemic change in corporate behavior through intensive research. All of a sudden we weren't
finding the bad guys and filing shareholder proposals, and we found a broader spectrum of
collaborators, including how corporations were working with us through stakeholder focus groups."
Berry cited the financial crisis and other global crises as contributing as well to the
evolution in ICCR's approach.
"The convergence of so many global crises over the last
couple of years has made mainstream stewards of capital pay attention differently," she said. "It
has made proprietary coalitions who might be more interested in protecting their own identity than
in collaborating look up and say, we not only have to collaborate more authentically with each
other. We have to reach across the ocean as well."
In a 2009 paper outlining the
differences in approaches to shareowner engagement in the UK and US, James Gifford, Executive
Director of the United Nations' Principles for
Responsible Investment (PRI), wrote, "There is a cultural difference between the US and the UK
on the issue of filing shareholder resolutions, with this tool being much more common in the US due
to weaker shareholder rights leaving shareholders with fewer options, as well as a more
confrontational corporate culture." Berry noted that ICCR's recent meetings at its New York City
headquarters were attended by many more institutional investors from other continents, and the
influence of the cultural differences of the new attendees cannot be discounted.
also pointed to an article entitled Creating Shared Value,
published last year in the Harvard Business Review. Authors Michael Porter and Mark Kramer wrote,
"Corporate responsibility programs—a reaction to external pressure—have emerged largely to improve
firms' reputations and are treated as a necessary expense. Anything more is seen by many as an
irresponsible use of shareholders' money."
However, the authors continued, "The concept of
shared value resets the boundaries of capitalism. By better connecting companies' success with
societal improvement, it opens up many ways to serve new needs, gain efficiency, create
differentiation, and expand markets."
"What does it mean for a company when it looks at
the common good and seeks economic value in creating shared value?" Berry asked. "If you believe in
shared value, how do you capture the negative and positive externalities of strengthening
communities where you operate?"
"More and more in the mainstream world, we see people
asking, how do you measure this?" she continued. "How do we monetize it, and if we monetize it does
it just make it a cynical money-making exercise? Our belief is that if some organizations have to
apply a monetary value—to say that it is good business to treat people well—we just want the social
transformation to occur. Whatever metrics and mechanisms are required to drive that change forward
and bring more justice to the world, we're excited about it."
ICCR's emphasis on social
transformation received further validation last year, when the United Nations Human Rights Council
endorsed the Guiding Principles on
Business and Human Rights of Professor John Ruggie, the UN Secretary-General's Special
Representative for Business and Human Rights (UNSRSG).
Rev. David Schilling, the director
of human rights for ICCR, described the Guiding Principles as "a significant breakthrough and an
indispensible resource for investors in assessing the human rights performance of companies."
"Like any other principle-driven document, once a global norm is established it is amazing how
words drive behavior," Berry said. "It's a benchmark for a new way of thinking about business and
these other issues.
"When companies see that you're not only at the forefront of filing
proposals and pushing them to change, but are also willing to acknowledge when they do change, they
begin to change their way of looking at what corporate social responsibility means," she said.
"They're willing to take more risks with us because we understand that moving through system change
"We started a movement 40 years ago, and we can do it again. The tools of the
movement might be different, but the vision and the faith are the same."