An Impact Pioneer: How Joan Bavaria Harnessed Shareholder Power to Forge Corporate Change

By Rahul Kolluri
Trillium’s history in shareholder advocacy stretches back three decades. Trillium’s founder Joan Bavaria was inspired by the Interfaith Center on Corporate Responsibility’s (ICCR) use of advocacy to push for divestment from companies doing business in Apartheid South Africa. With this example, Joan began similar campaigns at companies on a variety of environmental, labor and human rights, and diversity and equality issues. Through the next decades, coalitions of investors were able to demonstrate that combining the power of shareholders with their passion for change is a powerful asset in creating corporate reform.
Environment
Beginning in 1990, Joan was at the forefront of environmental and economic activism focused on Exxon Mobil following the Valdez oil spill in 1989. With members of the newly formed Coalition for Environmentally Responsible Economies (CERES) which she co-founded and incubated in Trillium offices, Joan helped draft a new ten point set of public environmental accountability standards which came to be known as the “Valdez Principles”. Using our clients’ power as shareholders in the company, Trillium pressed for ExxonMobil to adopt this new code of conduct by filing a shareholder proposal. The resolution garnered 9.5% of the vote at Exxon’s annual meeting, a remarkable showing that well exceeded expectations of a 5-7% result. In addition, Trillium’s first old growth forest-related shareholder resolution in 1998 (in conjunction with the Rainforest Alliance, As You Sow, and the Environmental Foundation of America) convinced Home Depot to phase out the sale of tree-products harvested from these regions. By August 1999, Home Depot committed to completely stop selling wood from endangered areas by 2002, becoming a role model in the industry.
Labor and Human Rights
In 1992, Trillium struck a watershed victory under Joan’s leadership, becoming the first-ever investment firm to file a resolution on sweatshop labor with a major corporation pushing Wal-Mart to adopt a comprehensive set of labor standards to help eliminate the use of child and forced labor across its supply chain. The same year, Trillium’s testimony on the selective purchasing bills compelled companies such as Toyota North America, Apple, Kodak, HP, PepsiCo, and Phillips to break ties with the Burmese military junta, which at the time was under heavy fire for human rights abuses.
Diversity and Equality
In 1994 Trillium began advocating for companies to publically release their workforce diversity data by publishing their EE0-1 forms, a non-public standard disclosure for companies with more than 100 employees organized by government contractors. Trillium would also file the first shareholder resolution ever to call for the implementation of the Equality Principles on Sexual Orientation in 1995, challenging Johnson & Johnson to protect lesbian and gay workers from discrimination resulting in the company creating a written policy banning workplace discrimination entirely and thereby protecting tens of thousands of workers. Encouraged by this success, Trillium pushed successful resolutions at both Chrysler and McDonald’s prohibiting LGBT-based discrimination. In 1997, Trillium filed the first-ever shareholder resolutions on the gap between the pay of top executives and ordinary workers, including a resolution at General Electric that went to a vote.
Challenges
The road to advocacy was far from smooth. Vice President of Shareholder Advocacy, Susan Baker, remembers the tense discourse between shareholders and management throughout Exxon’s annual meeting when she presented the “Valdez Principles” shareholder proposal. “Activist members of the socially responsible investing community like Trillium, were often met with furrowed brows and an extreme level of skepticism.” Opposition to Trillium’s push to divest from South Africa (then under Apartheid) was incredibly fierce, with one lawmaker going so far as to lambast Joan’s “do-goodery”. Even today, the hurdles to the advocacy process remain present and pervasive. Senior Vice President and Director for Shareholder Advocacy Jonas Kron remarks that “Every ten years or so, companies try and move the goal posts and change the SEC rules that govern the shareholder proposal process. Each and every time the sustainable and responsible investing community has rallied to successfully resist efforts to quash our voices.” He also notes that “Today, we face a familiar assault from trade associations like the Chamber of Commerce, astroturf groups, and their allies on Capitol Hill.”
Nonetheless, the outlook for shareholder advocacy remains bright in the face of resistance. As Kron notes, “we are even stronger now than we were in the 90s or in 2010 when they last tried to weaken us. Through US SIF, ICCR, Ceres, the Council of Institutional Investors, and our own advocacy we are working to make sure that our insights will be heard in the next generation of boardrooms.” Trillium’s core message has remain unchanged to this day, and we continue to be a leader in the global charge for responsible policy on a variety of key ESG issues, including: food waste, renewable energy, workplace diversity, political contributions transparency, and sustainability reporting.