Religious Investors Pressure Wal-Mart With Shareholder Resolution

c. 2005 Religion News Service WASHINGTON _ Wal-Mart Stores Inc. is already facing a massive class-action sex-discrimination lawsuit, an $11 million legal settlement of a federal investigation of labor practices, $3.1 million in fines for violations of the Clean Water Act and allegations of executive misuse of funds. Now the giant retailer must face religious […]

c. 2005 Religion News Service

WASHINGTON _ Wal-Mart Stores Inc. is already facing a massive class-action sex-discrimination lawsuit, an $11 million legal settlement of a federal investigation of labor practices, $3.1 million in fines for violations of the Clean Water Act and allegations of executive misuse of funds.

Now the giant retailer must face religious investors who say the company is long overdue to reassess its business model in light of controversial labor practices and policies that impact communities and the environment.


A June 3 shareholders meeting in Fayetteville, Ark., will include a vote on a resolution backed by members of the New York-based Interfaith Center on Corporate Responsibility (ICCR), which wants the retailer to study itself regarding a variety of ethical issues.

According to the Rev. David M. Schilling, director of global accountability for ICCR, the group was founded in 1971 to “bring the faith communities’ concerns related to human rights, environmental issues and economic development to the companies religious institutions invest in.”

The coalition, made up of a wide range of religious institutions, has launched successful campaigns against overseas labor practices at Gap Inc. (owner of the Gap, Banana Republic and Old Navy stores) and Nike Inc. It has also campaigned on practices at General Motors Corp., Ford Motor Co., Dell Inc. and Microsoft Corp.

The religious investors are also making overseas labor an issue in targeting Wal-Mart, arguing that the retailer’s suppliers don’t pay foreign laborers adequate wages.

“We know Wal-Mart goes to places like Bangladesh and Guatemala because the labor is so cheap,” said Sister Annette Sinagra, corporate responsibility analyst for Adrian Dominican Sisters Portfolio Advisory Board, one of the religious investors involved in the resolution.

The investors’ primary argument against Wal-Mart is that the company’s business model is flawed because it allegedly relies on low employee wages, few benefits and pressure on suppliers to maintain Wal-Mart’s trademark “Low Prices, Every Day.”

“All of these (issues) are of concern to a wide variety of investors, and investors are increasingly wanting more transparency to understand what the company’s plans are and how they’re going to address these problems,” Schilling said.


A resolution for shareholder action calling on the company “to develop a public sustainability report on its efforts to protect human rights, worker rights, land and the environment” was filed by 31 religious investors who are members of ICCR. Overall, the ICCR claims 2,745 religious institution members and 45 affiliated, non-religious members.

The United Methodist Board of Pension & Health Benefits and the Libra Fund are primary filers of the resolution. Other religious groups joining them include the Presbyterian Church (USA), the Dominican Sisters of Adrian, Mich., the Unitarian Universalist Service Committee, Christus Health of Houston and Mennonite Mutual Aid of Goshen, Ind.

Vidette Bullock Mixon, director of corporate relations for the United Methodist Board, said in an interview that “Wal-Mart, as the largest retailer, needs to join the ranks of other multinational companies that are developing or have developed sustainability reports.”

In a letter appealing to fellow Wal-Mart investors, Bullock Mixon criticized the company’s business model.

“We are concerned that persistent failure of Wal-Mart to address social, ethical and environmental challenges in a substantive manner will adversely impact investment returns,” Bullock Mixon wrote in the May 23 letter. “We believe that by focusing on the sustainability model, and managing corporate responsibility, Wal-Mart will reduce the risk of future investor losses.”

ICCR members submitted a similar shareholder resolution to Wal-Mart at last year’s annual meeting. It failed, with 14 percent of shareholders voting for its passage.


Schilling considered that effort successful, however, because it attracted votes beyond the group’s religious base.

Bentonville, Ark.-based Wal-Mart declined to comment for this article. In a recent company proxy statement, it said it would prepare a report on sustainability but it did not give a clear date or format.

Wal-Mart “will prepare, in the future, a report similar to the one the proponent requests, but the company prefers to do so only in the form and at the time that is in the best interests of the company and its associates and the communities and customers we serve,” said the company’s proxy statement, released in February for the June shareholder vote.

The company also maintains that its pay rates and insurance costs are no worse than the retail industry average.

“Independent studies show that Wal-Mart associates have health care coverage at about the same rate as other retailers,” the company asserts on its Web site, http://www.walmartfacts.com. “Wal-Mart estimates about 160,000 people have been taken off the list of America’s uninsured by coming to work with us.”

Sinagra, of the Adrian Dominican Sisters Portfolio Advisory Board, defended the involvement of religious organizations.


“It’s a religious issue because we strongly believe in human rights, we believe that the human rights of workers are being violated and the Catholic Church especially has always promoted human rights,” Sinagra said. “Any time you’re dealing with a person being violated it’s a religious issue for us, a faith issue.”

MO/PH END RNS

Editors: Check the RNS photo Web site at https://religionnews.com for photos of overseas workers to accompany this story.

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