Jan. 28, 2020
January 28, 2020 RE: Comments Related to File S7-23-19 Dear Ms. Countryman, The Needmor Fund is a private foundation with a sixty-year history of supporting social justice work across the country. Our grantees are actively pursuing equitable solutions to a range of issues, including worker rights, criminal justice reform, gun safety, and climate change. Through our experience working with these groups, we have found shareholder advocacy to be an effective tool for ensuring that the voices of marginalized communities are heard within the corporate sector. Over the last two decades, the Needmor Fund has been involved in the filing of over 100 shareholder resolutions on issues like governance, climate change, expanded disclosure of lobbying expenditures, diversity and board diversity, and human rights. We believe we have been one of the most active foundation shareholder proponents . To advance this program we have utilized the expertise of our investment manager. Thus, our foundation has a significant stake in the decisions you make which would limit our rights as a medium size foundation to file resolutions alone and with others. We oppose the combined restrictions being proposed. They would limit our role even when there have been demonstrable positive effects from our engagements. For example, right after the Wells Fargo scandal broke, the Needmor Fund filed a resolution seeking an Independent Board Chair be appointed. Very quickly the Board met, agreed with this request and appointed a new Director as Chair, an important step in rebuilding their credibility. In response we withdrew our resolution. This is but one example of an effective use of shareholder advocacy we have utilized. On behalf of the Board of Directors of the Needmor Fund, I am pleased to offer these comments in response to the new proposed SEC rules related to shareholder resolutions. We do not believe that the new proposals come with any significant support from investors. Certainly no investor who has ever filed a resolution supports these changes. So while the mission of the SEC is to be the ‘Investor’s Advocate’, this rule is clearly one that mirrors the wishes of large corporations who are trying to step back from accountability to their shareowners and broader stakeholders. As you know, in Mid-January 2020 BlackRock’s CEO Larry Fink sent his annual letter to companies. In this letter and an accompanying letter to clients, Mr. Fink highlighted the urgency for investors and companies to address climate change and outlined the expectations BlackRock had of companies. For example, BlackRock urges companies to provide comprehensive climate reporting following the TCFD and SASB reporting guidelines. Their understanding is that companies doing such reporting will also disclose and implement plans for improving their climate record. But central to the expectations of climate concerned investors is the need for clear reporting and accurate data provided by those companies in which we invest. Only with clear reporting in hand can investors address the progress being made by a company and the climate related risk they face. Seeking this information is part of their fiduciary duty. We believe the proposed rules, taken as a whole, will have a serious negative impact on the ability of investors, small and large, to file shareholder resolutions seeking vitally important material information regarding companies GHG emissions and climate programs. As such the SEC would be inhibiting the request for necessary information to do our analysis. We urge you to study Mr. Fink and BlackRock’s statements to evaluate how the new rules would be an impediment to BlackRock and other investors fulfilling their financial responsibilities. While BlackRock may not be presenting a Comment Letter on the shareholder resolution proposal, we are aware (from studying their new letters to companies and clients) how deeply they support the call for key material information on a company’s climate record being provided to investors. They urge companies to disclose such information in private discussions, in more public SASB dialogues and in their own March ‘declarations’. Resolutions are one important tool for investors to have available to press for such necessary disclosure. The SEC proposed rules limit the rights of smaller investors like Needmor and the world’s largest investor, BlackRock, to ask for and vote on such disclosure requests using shareholder resolutions as a tool. Should you have any questions regarding these comments, please feel free to contact me at the email below. Thank you. Mary Sobecki Mary Sobecki, Executive Director The Needmor Fund 539 East Front Street Perrysburg, Ohio 43551 PH: [redacted] EM: [redacted] Visit us at: www.needmorfund.org
(Attached File #1)(Attached File #2)(Attached File #3:s72319-6706470-206111.pdf)