What is shareholder advocacy?
Shareholder advocacy is a strategy that can be used by investors to push a company to report on or change policy and behavior, or change its leadership. Shareholders are owners of the public companies in which they invest, and this comes with a set of shareholder rights which allows investors to engage with company leadership on issues of concern.
This strategy has been used for decades by faith-based and secular, progressive and conservative investor groups alike to influence corporate decision-making. Each company holds a shareholder meeting annually at which shareholders can vote on proposals put forward by either management or other shareholders. Shareholder advocacy can take place at any time but much of it is focused around the company’s annual general meeting. Shareholder advocacy tools can include: engaging management in dialogue, filing shareholder proposals, voting proxies (on shareholder or management proposals), campaigning to support or oppose a specific proposal or the election of a director.
Why is the Jewish community getting involved?
The overarching Jewish value guiding JLens’ approach to investing in public companies is hocheach tochiach (constructive rebuke). As there is no perfect company, attempts to solely screen out ‘bad actors’ or only invest in ‘good actors’ miss the greatest opportunity for impact through the constructive rebuke inherent in shareholder advocacy.
Corporations play a larger role in our society than ever before, even rivalling the influence of governments: some U.S. public company annual revenues surpass national economies, media and tech companies shape public opinion, and 31 million people are employed by the 500 largest U.S. companies. They have an obligation to ensure their products, platforms, and workplaces remain free from antisemitism and all forms of hate. The Jewish community, just like any other community, has a right to make its voice heard by corporations and to represent its values; whether that is to support Israel by countering the Boycott, Divestment & Sanctions (BDS) movement, or by repairing the world through Tikkun Olam initiatives.
The Jewish community has historically been absent from the shareholder advocacy process but JLens is helping Jewish investors to take their seat at the table and amplify the Jewish shareholder voice in the corporate arena.
How does JLens employ shareholder advocacy on behalf of the Jewish community?
JLens investment strategies are passive (meaning the companies in the portfolio are not actively selected but rather they meet certain rules-based criteria which qualifies them for inclusion) and all companies are among the largest 500 U.S. public companies. The reason these portfolios hold many of the 500 largest U.S. public companies is so that JLens can represent shareholders in these companies through shareholder advocacy and push company management to do better.
JLens’ advocacy with companies focuses on Jewish communal priorities such as combating antisemitism and hate, supporting Israel, and promoting select Tikkun Olam issues. Examples of shareholder advocacy campaigns that JLens may engage in include:
Combat Antisemitism and Hate
- Pushing gaming or social media companies to improve content moderation on their platforms to remove hateful and extremist content
- Asking e-commerce companies to remove hateful products from their marketplaces
- Encouraging companies to offer antisemitism training to their employees
- Supporting companies in creating Jewish Employee Resource Groups and implementing best practices for religious accommodations in the workplace
Support for Israel
- Campaigning against shareholder proposals filed at defense companies which aim to end the companies’ business with Israel
- Removing anti-Israel bias from financial ratings at investment firms
- Encouraging companies to maintain their economic ties to Israel, in the face of BDS pressure
Tikkun Olam
- Pushing companies to end forced labor, child labor and human trafficking in supply chains
- Helping companies promote employee health, safety and wellbeing
- Ensuring companies adhere to ethical business practices and continue to improve product and service safety and sustainability
If you’re unhappy with corporate behavior, why not just divest from those companies?
If we have concerns about a company’s product, platform, or even the conduct of an executive or director, our first step is to engage in good faith and seek change. When needed, we deploy additional shareholder advocacy tools—from proxy voting to shareholder resolutions—to address those issues. We view divestment as the absolute last resort because giving up your status as shareholder means giving up the ability to advocate for change.
JLens’ strategies screen out, or divest from, very few companies based on business conduct. Our screening is deliberately light because we prioritize the “own and advocate” method, which we believe will maximize our impact through shareholder advocacy. JLens screens out companies with significant parts of their revenue from tobacco, oil sands and thermal coal (the most damaging and pollutive of fossil fuels), or for-profit prisons. JLens also reserves the right to screen out companies who have committed an ‘egregious act’ such as acquiescing to pressure from the BDS movement to pull business out of Israel.
These screens are only applied when all advocacy channels have been exhausted or where we believe advocacy would have minimal impact to effect change to these business activities or behaviors. JLens believes these business activities do not align with Jewish values and a screen is non-controversial in the Jewish community, representing a consensus position.
