Change Finance, a majority women-run ETF issuer with deep roots in activism, has released its 2021 Advocacy Report, which details its commitment to active ownership and their five-tiered shareholder advocacy strategy to promote sustainable practices.
Such efforts include addressing structural and systematic issues in corporate culture; promoting climate change and sustainability policies as well as pushing ESG-related corporate governance.
Dorrit Lowsen (pictured), President and COO of Change Finance, explains that the ETF has enjoyed a recent period of growth, with assets up to USD75 million, on the back, she believes, of the increased inflows into ESG funds generally.
“At over three years old, we are now one of the oldest ESG ETFs on the market,” she says. The firm has also been undertaking a lot of education and outreach work, particularly with its latest Advocacy Report. “It’s a good way to push the companies to do even better,” she says.
“We think it’s important to be active investors and we see the landscape shifting with a record year for ESG proxy voting. All investors need to be reminded that if you own stock, you can vote and you can reach out directly to companies and organisations like ours which are trying to build opportunities to engage.”
Change Finance’s latest Advocacy Report details the firm’s commitment to positive change by voting proxies in alignment with ESG principles; engaging companies to promote more just and sustainable business practice; filing shareholder resolutions to change corporate policies; advocating for public policy that strengthens shareholder rights, equality, and democracy and divesting when a company is unwilling to change.
Change Finance has contacted 121 large cap US companies to request median racial and gender pay gap data. Lowsen says that this information is crucial for understanding the opportunity available to women and people of colour at senior levels of large corporations.
The first quarter of 2021 saw members of Change Finance’s Shareholder Advocacy Committee meet with senior members of BlackRock’s Investment Stewardship team to press the organisation to vote in support or climate critical shareholder resolutions.
Change Finance writes: “While our discussion with BlackRock was largely encouraging, other organisations have received similar responses, only to be disappointed in subsequent proxy voting seasons. We intend to pause our dialogue until a third-party analysis of BlackRock’s votes is conducted later this year.”
Change Finance has also partnered with the non-profit, Shareholder Commons, to file a shareholder resolution asking Salesforce.com to reincorporate as a Public Benefit Corporation.
The firm writes: “We formed a coalition of investors representing USD6.8 billion in assets under management to press 75 corporations to publicly support democratic institutions, voting rights, and transparency regarding political giving. Change Finance has supported seven collaborative engagement efforts with other investors related to democracy, voting rights, climate risk disclosure rules.”
These are all initiatives that Lowsen feels investors deserve. “Our investors choose to invest in our product because of our strong focus on ESG issues,” she says. “Increasingly investors are paying attention to the whole life cycle of their investments and looking to see that the asset managers they invest with are committed to their values.”