Marcela I. Pinilla
Director of Sustainable Investing
Cui Bono? Who Benefits?
At Zevin Asset Management, we view our fiduciary duty to our clients as inseparable from our responsibilities as global citizens. Through this quarter's update we hope to share a window into our efforts to contribute to shaping a more sustainable and just economy. From defending the shareholder proposal process to challenging surveillance pricing and the rollback of climate and workforce disclosures, this update shares how we continue to press for transparency and accountability on behalf of our clients.
When Shareholders Warn and Boards Say No
Corporate management and boards often describe shareholder proposals in terms of cost or distraction. But corporate decisions have impacts well beyond a company's walls, and investors who take a whole-world view see shareholder engagement, including the ability to file shareholder proposals, as an essential feedback mechanism to management. Since 1942, the right to file shareholder proposals, codified as Rule 14a-8, has given investors a democratic way to surface risks and ask boards consequential questions.
A recent analysis from the Interfaith Center on Corporate Responsibility (ICCR) offers striking examples on the value of shareholder proposals. It looks back at shareholder concerns raised at Meta, Johnson & Johnson, and Monsanto/Bayer on data privacy, child safety, product safety, and glyphosate, years before significant litigation, settlements, or regulatory action on those same issues.
We can't know what would have happened had these companies responded differently. But the question remains on the proverbial boardroom table: shouldn't investors have a way to raise risks before they become more costly?
A Narrowing Door For Shareholders
This question is urgent now. The SEC has proposed eliminating Rule 14a-8, the federal framework governing the inclusion of qualifying shareholder proposals in company proxy materials. This proxy season, SEC staff also stopped weighing in on disputes over proposals, removing the neutral referee that has long helped companies and investors resolve them. Together, these changes would sharply narrow how shareholders can weigh in on governance, pay, and emerging risks.
Defending Shareholder Dialogue
This quarter, we wrote to every U.S.-based company in our portfolios encouraging them to keep engaging with shareholders and to support a stable Rule 14a-8 framework. Shareholder proposals are a low-cost early-warning system. Without them, engagement could fragment into costlier and less predictable avenues, such as litigation, floor motions, and vote-no campaigns against directors. We asked each company to submit a comment letter or public statement, engage directly with the SEC, and commit to continue accepting shareholder proposals regardless of the rule's fate.
Protecting the data investors rely on
We also joined two coalition letters opposing federal efforts to eliminate disclosures investors use to assess risk. With 15 investors, labor unions, and public interest organizations, we urged the SEC not to finalize its rescission of climate-related disclosure rules, which rests on a narrow reading of the agency's authority and sets aside overwhelming investor input. We also joined a broad investor coalition opposing the Equal Employment Opportunity Commission (EEOC's) proposal to stop collecting workforce demographic data, including EEO-1 reports, which break down workforce demographic data. Before the recent retreat, 80% of S&P 500 companies disclosed this data voluntarily, and it has helped enforce anti-discrimination laws since 1966. In both cases, the question is the one at the heart of this update: when information disappears, who benefits?
Surveillance Pricing: Who Pays?
In September, Zevin Asset Management submitted a comment to the Federal Trade Commission (FTC) on surveillance pricing, developed in collaboration with Open MIC, a technology and digital rights organization. Built on sensitive personal data such as location, demographics, and browsing behavior, surveillance pricing can charge each shopper the most they will likely pay.
We welcomed the FTC's view that undisclosed personalized pricing is likely unfair or deceptive. However, we argued that the proposal for disclosure alone falls short since a notice on the use of personalized pricing does not change the practice or result. Setting prices that prey on a need rather than reflect the cost of a product has the potential to become another extractive practice that furthers inequality and erodes customer trust. We urged the Commission to govern what companies may do with personal data, not just what they disclose.
Data Centers and the social licence to operate
Our recent letter to Digital Realty Trust shows why open dialogue matters. The data center industry faces a rapid shift in community sentiment over electricity costs, grid reliability, water, land use, pollution, and transparency, and Digital Realty's proposed Atlanta data center has faced repeated delays amid neighborhood opposition. Our inquiry included questions to the Board on how it oversees community engagement and opposition-driven risk, including the cost of project delays, the use of Community Benefit Agreements, and stress-testing against new state moratoria.
Always looking ahead
Across each of these engagements, our approach remains the same: to raise difficult questions and to press for solutions that safeguard both human dignity and financial value. As the rules governing investor dialogue come under pressure, we will monitor changes in the corporate and policy arena alike.
As ever, we are grateful for your partnership. We welcome your thoughts, questions, and reflections on this work.
Thank you for reading and sharing. For more on this work and our broader advocacy, visit our website, and join us on LinkedIn, Facebook, and Instagram. And please don’t hesitate to contact Marcela Pinilla, Zevin Asset Management’s director of sustainable investing, at marcela@zevin.com with your questions, thoughts, and suggestions.
Disclosures: Registration with the SEC should not be construed as an endorsement or an indicator of investment skill, acumen, or experience. Investments in securities are not insured, protected or guaranteed and may result in loss of income and/or principal. This communication is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Nothing in this communication is intended to be or should be construed as individualized investment advice. All content is of a general nature and solely for educational, informational, and illustrative purposes. Unless stated otherwise, any mention of specific securities or investments is for illustrative purposes only. Adviser’s clients may or may not hold the securities discussed in their portfolios. Adviser makes no representations that any of the securities discussed have been or will be profitable. The listing of organizations or initiatives should not be construed as an endorsement or a recommendation to retain Adviser by these entities. Certified B Corp status is, at least in part, based on responses provided to B Lab by Zevin Asset Management. Zevin Asset Management pays annual membership dues to B Lab, which is a requirement for eligibility in B Lab results. Certified B Corp status requires an assessment of companies’ positive impact on workers, community, customers, and environment (Criteria: https://bcorporation.net/certification/meet-the-requirements).