Students from across the country participated in the March for Our Lives in Washington, DC, on March 24, 2018, to call for common-sense gun safety laws. The march was organized by survivors of the February shooting at Marjory Stoneman Douglas High School in Parkland, FL. Photo by Scott Serio via AP Images.
Shareholders Press for Change
Every day, an average of 96 Americans are killed with guns, and the gun homicide rate in the US is 25 times higher than that of other developed countries, according to the nonprofit Everytown for Gun Safety.
The US public largely supports enacting common-sense gun-safety laws to help reduce these fatalities, such as laws to ban attachments that allow a gun to fire bullets more rapidly. An NPR survey—conducted shortly after the shooting at Marjory Stoneman Douglas High School in Parkland, FL, last February that killed 17 students and faculty and injured 17 more—found that three-quarters of Americans want stricter gun laws than we currently have.
Unfortunately, Congress remains gridlocked on gun safety, even after another school shooting happened at Santa Fe High School near Houston, killing ten and injuring ten more, as the Green American went to press. Investors, however, are taking action.
Investor members of the Interfaith Center on Corporate Responsibility (ICCR), a nonprofit shareholder advocacy group, have been working behind the scenes with companies and through the shareholder resolution process to pressure weapons manufacturers and retailers to stop selling military- and assault-style weapons and accessories to civilians, make guns safer, and support gun-safety policies.
“Our end game is not to shut down the gun industry. We’re not talking about civilians who use guns to go out and hunt,” says Susana McDermott, ICCR communications director. “We are restricting [our investor efforts] to what are really military weapons [that are] being sold to civilians. At the very least, it’s about ensuring that those products don’t get into the wrong hands.”
Shareholder activists have already achieved important victories with gun manufacturers and retailers. Much of the leadership on the gun safety issue comes from Catholic sisters, who have been working on what Sister Judy Byron calls “militarism” issues since the 1970s, when they took part in anti-nuclear efforts. Byron is a member of the Adrian Dominican sisters and director of the Northwest Coalition for Responsible Investment, an ICCR member in Seattle.
“We’re about the mission of Jesus, and He certainly called us to care for people and have a just society,” says Byron. “I’m sure He would have done something about these weapons, if they’d been around in His day and age. Our Catholic social teaching also drives what we do.”
In 2016 and 2017, Catholic sisters across the US bought up stock in Dick’s Sporting Goods, Sturm Ruger and Co., and American Outdoor Brands (formerly Smith & Wesson), aiming to use their investor power to drive change at the companies. They then sent letters to all three asking for dialogues on gun safety.
“We were quiet about our work, because we thought if the companies were inclined to talk to us, it might not happen if we were out talking to the press,” says Byron. “There was no response. So we decided we would file our shareholder resolutions [for the 2018 shareholder season].”
St. Louis-based Mercy Investment Services—the investment program for the Sisters of Mercy and an ICCR member—led things off by filing a resolution at Dick’s in January, asking the company to commit to conducting background checks on gun sales, support universal background-check laws, and reevaluate its sales of assault-style weapons, including accessories like bump stocks and high-capacity magazines that increase a gun’s firing rate.
While most guns are sold at gun shows and smaller shops, corporate stores like Dick’s are responsible for 12 percent of assault-style weapon and 23 percent of rifle and handgun sales in the US, says the National Shooting Sports Foundation.
In addition, ICCR members Sisters of the Holy Names of Jesus and Mary, in Marylhurst, OR, and Catholic Health Initiatives in Colorado filed resolutions asking American Outdoor Brands and Sturm Ruger, respectively, to report on their efforts to make their gun products safer, to report on the reputational and financial risks associated with their products, and to monitor “violent events” associated with their companies.
But then the Parkland shooting changed everything, as the Stoneman Douglas High students catalyzed a nationwide movement for gun safety. The sisters and other ICCR members took the opportunity to approach Dick’s behind the scenes “about the clear business and moral case for immediate corporate action.”
On Feb. 28th, Dick’s agreed to stop selling assault-style weapons, and it raised the minimum age of gun purchasers in its stores to 21. The sisters dropped their resolution at the company.
In April, Dick’s took its commitment even further, committing to purge assault-style weapons and accessories from its shelves and destroy them, rather than selling them or returning them to the manufacturer. A month later, the company announced it was hiring a firm to lobby Congress on gun-safety policies.
“With Dick’s, we have achieved our goal regarding the positive role retailers can play in ending gun violence,” says Sr. Valerie Heinonen, director of shareholder advocacy at Mercy Investment Services.
Though not the subjects of gun-safety resolutions, Kroger announced it would end all gun sales in its Fred Meyer stores, and it would stop selling magazines about “assault rifles” in all of its stores; Walmart raised the minimum age for gun purchases to 21 and will no longer sell high-capacity magazines; it does not sell bump stocks and stopped sales of military-style rifles in 2015.
In May, the resolution at Sturm Ruger received a rare majority vote of 69 percent. While even a ten percent vote on a socially responsible shareholder resolution is often enough to bring companies to the negotiating table, a majority vote sends a clear message that a company’s stock ownership wants action.
“Sturm Ruger needs to not only take their fiduciary responsibility to investors seriously but also their broader and more important responsibility to society,” said Colleen Scanlon, chief advocacy officer at Catholic Health Initiatives, shortly after the vote. “We are heartened by today’s vote and look forward to dialoguing with the company on ways to make episodes of gun violence a thing of the past.”
Another 2018 shareholder resolution, filed by Stewart W. Taggart, an individual shareholder, asked Chubb Ltd. about the “Carry Guard” insurance it underwrote for National Rifle Association (NRA) gun owners worried about liability in self-defense shootings. The SEC ruled that Chubb could omit the proposal from the ballot on technical grounds, but shortly after the Parkland tragedy, Chubb disclosed that it ended its contract with the NRA three months earlier. While not targeted by shareholders, insurance broker Lockton Affinity said at the end of February that it would no longer act as Carry Guard’s broker and administrator.
A vote on the American Outdoor Brands resolution will take place at the company’s annual meeting this fall.
Mainstream Investors Get on Board
Responsible investors have also conducted outreach at mainstream investment companies like BlackRock and State Street Corp., asking them to use their financial might to press for gun safety, says McDermott. Those efforts have yielded impressive results.
BlackRock, the world’s largest asset manager, stated in February that it would speak with the weapons manufacturers and retailers in which it invests “to understand” their response to the Florida high school shooting. BlackRock also noted that it does not hold weapons manufacturers in its active funds—only in index funds, which are funds that mirror third-party stock indexes.
The company said in a March 2nd follow-up statement: “For manufacturers and retailers of civilian firearms, we believe that responsible policies and practices are critical to their long-term [financial] prospects. Now more so than ever. That is why, over the past week, we have reached out to the major publicly traded civilian firearms manufacturers and retailers to engage in a discussion of their business practices. We have already had constructive discussions with some, and we are continuing to pursue our engagement with them all.”
In April, BlackRock introduced two new exchange-traded funds and a line of pension plans that do not include companies that manufacture or sell civilian firearms. It also backed the gun-safety shareholder resolution at Sturm Ruger.
A few days after BlackRock’s initial statement, State Street Corp. announced it would engage with gun manufacturers and sellers over what these companies will to do support “safe and responsible use of their products.”
More Companies Make Moves
Several corporations took positive steps on gun safety this spring, bowing to public pressure after Parkland. On March 22nd, Citigroup announced a new US Commercial Firearms Policy “to do our part as a company to prevent firearms from getting into the wrong hands.” Under the new policy, Citi requires new retail-sector clients and partners to 1) refrain from selling firearms to those who have not passed a background check; 2) restrict weapons sales to people under 21; and 3) not sell bump stocks or high-capacity magazines.
On April 10th, Bank of America announced that it would stop lending to gun manufacturers that make military-style assault weapons for civilian use, prompting the powerful gun lobby to decry the actions of these two “gun-hating banks”.
Outside the financial sector, L.L. Bean announced that it would stop selling guns to anyone under 21. And Canadian-based Mountain Equipment Co-op said it was suspending further orders from five brands owned by Vista Outdoor, a Utah-based gun-manufacturer.
US outdoor company REI announced it would suspend orders from 50 brands owned by Vista, which include CamelBak water bottles and Jimmy Styk surfboards.
Shortly after Parkland, the NRA came under public fire for its extreme lobbying against gun-safety laws, including opposing measures to create a universal background check system in the US for weapons sales.
#BoycottNRA went viral on social media this spring, which may have at least partly influenced several companies to take anti-NRA action:
- Insurance giant MetLife tweeted that it would no longer offer discounts to NRA members on transportation insurance.
- Other companies ended discounts or deals for NRA members including: Symantec (Norton security software and LifeLock identity-theft services); Enterprise Holdings (Alamo, Enterprise, and National car rental); United Airlines; Delta Airlines; Allied Van Lines; North American Van Lines; TrueCar; SimpliSafe; and Starkey Hearing Technologies.
- And First Bank of Omaha announced in February that it would stop issuing its NRA Visa affinity credit card.
Credit Card Companies
On February 19, journalist Andrew Ross Sorkin, in an op-ed in the New York Times, called on the finance industry to “set new rules for the sale of guns in America”.
“Collectively,” he wrote, “they have more leverage over the gun industry than any lawmaker. And it wouldn’t be hard for them to take a stand.”
Sorkin called on the big credit-card companies to refuse to allow their cards to be used by retailers that sell assault-style weapons and accessories.
If that doesn’t work, Sorkin noted that banks and credit-card-processing companies could take steps to prevent their credit cards and card-processing services from being used at such stores. Finally, he urged retailers like Amazon, CVS, and Apple to pressure the payment-processing industry to act, since they’re among its largest customers.
McDermott says that the media pressure exerted by Sorkin and others “is making [the financial industry] realize we need to figure this out,” she says. She also notes that one coalition of responsible investors is currently talking behind the scenes to the big banks, pressing them to ban the use of their cards to purchase assault-style weapons and accessories. And another coalition is talking to big conventional mutual funds about encouraging such action.
In May, members of Green America’s Green Business Network® (GBN) launched a letter asking major financial institutions to restrict the availability of accessories like bump stocks, and to require gun buyers to be at least 21 and pass a background check. Individuals can sign our letter to the big banks with a similar ask.
Social Investors Take Action
Several GBN members in the responsible financial sector have taken action. Many socially responsible mutual funds offer weapons-free options—or, if they do hold weapons companies, it may be for the purpose of exerting shareholder pressure on them as ICCR members did with Dick’s and Sturm Ruger. If you want weapons-free investments, on May 31st, As You Sow launched WeaponFreeFunds.org, an online tool to help you check whether your mutual and exchange traded funds are exposed to gun manufacturers and retailers.
On March 27th, ICCR and nearly 150 other institutional investors, including many GBN members, released an “Investor Statement on Gun Violence.” The statement called on companies to embrace the Sandy Hook Principles, a set of gun-safety measures for corporations selling guns or ammunition. The principles were named after Sandy Hook Elementary School in Newtown, CT, the site of a school shooting that killed 20 children and six staff members in 2012. The principles encourage steps like developing tech-based safety measures for guns and supporting universal background checks.
“As shareholders concerned about the social impacts of our investments, we believe it is incumbent on all corporate actors to use their power and influence to contribute to the well-being of the communities where they operate and, more broadly, to society as a whole,” the statement reads. “The dangers presented by gun violence threaten the lives of our children, our communities, and the very fabric of our society. In the coming months, we will be engaging with companies we own to urge immediate and positive action that addresses gun violence.”
Use your economic power to pressure companies for common-sense gun safety.
- Sign Green America’s letter to the big banks asking them to restrict credit card purchases of assault weapons and accessories.
- Share Newground Social Investments’ infographic: which gives a quick visual run-down of how you can start getting weapons out of your investments.
- Divest from weapons: Since the 1990s, responsible investors have been screening weapons out of their portfolios. You can screen on your own, or get help from a responsible financial advisor. Find one at GreenPages.org.
- Choose socially responsible funds. These mutual and exchange traded funds may hold some weapons companies, but it can be because they plan to use their investor power for change. Find them at GreenPages.org and WeaponFreeFunds.org.
- Vote for responsible shareholder resolutions on weapons. Visit ShareholderAction.org to view Green America’s list of resolutions to watch, including those on gun safety.
- Break up with your mega-bank. Some mega-banks help financially prop up weapons companies and retailers. Find a responsible bank at BreakUpWithYourMegaBank.org.
- Take charge of your credit card. By using a credit card from a responsible bank, you’ll know that your credit card fees aren’t bolstering weapons manufacturers and retailers. Find one at TakeChargeofYourCard.org.
- If you own a business that uses credit-card processing services, consider switching to a responsible processor like Dharma Merchant Services. Dharma does not serve companies that sell weapons or ammunition.