Tri-CRI Member Document – Not for Distribution
Tri-State CRI Campaign to Address Human Rights in the Automotive Sector
Concept Note for Coalition Members
Overview: As users of cars and investors in auto manufacturers and their suppliers, Tri-State CRI members are well aware of the environmental and social impacts of the automotive industry. Given our long-standing commitment to eradicating human trafficking and promoting human rights, and history of effectively engaging the auto sector, CRI members are well-positioned to use their collective shareholder voice to make a difference. The CRI will initiate a strategic Campaign with a focus on the auto sector to encourage improved human rights performance, urge companies to take actions to reduce the risks of forced and child labor, and promote safe and respectful working conditions throughout the expansive auto supply chain.
All CRI Members are welcomed and encouraged to play an active role in this Campaign. Please let us know if you hold the companies we are likely to engage or have other ideas at the survey link here.
The Problem
A single manufactured car is made up of as many as 30,000 individual parts. Each part has a unique origin story, and unfortunately these stories may include serious violations of basic human rights. Research indicates that for several of the key commodities that make up a car, including natural rubber, leather, electronics, and pig iron, there is evidence of poor working conditions, modern slavery, forced labor, and human trafficking. Meanwhile, both manufacturing and sales of cars are growing in emerging markets, where labor protections may be weaker. We have seen some leadership among companies, but in general, car manufacturers struggle to oversee all of their suppliers due to the scale and complexities of the global supply chain and recognize this as a challenge. Despite these challenges, corporations have a responsibility to carry out due diligence and ensure that human rights violations are not part of their operations. Furthermore, corporate leadership on these issues is critical in an uncertain US public policy environment.
Investors need assurance that auto manufacturers and major suppliers are addressing and managing these risks well and upholding high standards for human rights throughout the supply chain. Investor voice is especially important in this industry because consumer awareness and scrutiny of these issues is low, and with all the various suppliers, there is very dispersed leverage from consumers.
The Response: Overview and Goal of the Campaign
As investors concerned about respect for human rights in our portfolio companies, Tri-State CRI staff and members will launch a Campaign to improve management of human rights issues throughout the auto sector. The long-term vision is to see improved human rights performance in the auto sector as companies adopt policies that support decent work and practices that lower the risks of forced and child labor, reduce sexual harassment, and promote safe working conditions throughout the expansive supply chain. In addition, this Campaign will actively seek to integrate worker voices and help increase investor awareness of the human rights risks in the automotive sector.
Target Companies and CRI Members’ Portfolios
Based on portfolio holdings of interested CRI members and risks in operations, we will identify companies among car manufacturers and suppliers to engage as part of an industry-wide approach to address these issues: Auto companies: Ford, General Motors, Fiat Chrysler Automobile, Honda, Nissan, Toyota, Renault, BMW, and Groupe PSA; Suppliers: Johnson Controls, Magna, BASF, Honeywell , Lear Corporation, Bridgestone, Continental, and Goodyear .
CRI members, please visit this link to indicate ownership and other ideas: https://goo.gl/forms/GSkt3AfijfQ0LL2F3
Congregations that hold or are willing to purchase shares in one or more of the identified companies in their investment portfolios may then provide Tri-State CRI the authority to engage companies on your behalf. These congregations will be asked to provide information about the number of shares held and total portfolio size. This information will only be used in aggregate.
Why this Campaign is a good fit for Tri-CRI
· Building on Coalition members’ strong interest in addressing human rights and human trafficking through their investment portfolio, this Campaign will provide a focused opportunity for the Coalition to demonstrate leadership in an area where there is not yet a significant amount of investor engagement.
· This Campaign presents an opportunity to influence corporate human rights performance and work constructively with companies in our investment portfolio. Manufacturers are aware of the human rights risks in their global supply chains and this initiative can help advance performance and provide encouragement where it is needed.
· Tri-CRI has a positive and constructive history of engaging with Ford and General Motors, two of the major original equipment manufacturers (OEMs) in the US that have taken major steps to address these issues, and has a working relationship with the Auto Industry Action Group (AIAG), an important industry group.
· After developing the Campaign and gaining some traction, we can seek foundation grants to fund this initiative.
How CRI Members Can Participate in & Benefit from this Campaign
The Coalition will lead engagement and leverage the collective power of our assets and our voices to maximize the potential for impact on human rights and human trafficking issues in the auto industry. CRI staff will support interested Coalition members in joining this Campaign and will provide:
· Opportunities for Coalition members to participate, based on interest, in all the phases of the Campaign including drafting letters, joining company dialogues, attending company Annual Meetings, speaking with investor coalitions or press as a spokesperson for the Campaign. Members are encouraged to participate regardless of portfolio holdings.
· Targeted training on the issues and corporate engagement to help members get involved.
· Specific and concrete ways to invite congregation members around the world into our work.
· Research, Campaign information and blurbs that can be shared with Congregations and interested partners along with updates on progress.
The Campaign’s Approach
· Phase 1: Research companies and material human rights risks, articulate the investor case for engagement, and initiate partnerships with congregation members around the world, workers’ organizations and advocacy groups
· Phase 2: Reach out to companies with an investor letter to voice concern and initiate dialogue
· Phase 3: If necessary, file shareholder resolutions with companies which are exposed to significant risks and which have not responded to engagement
· Phase 4: Build consumer outreach dimension of the Campaign through new and existing networks such as the New Jersey Coalition Against Human Trafficking and U.S. Catholic Sisters Against Human Trafficking
· Phase 5: Build the investor coalition through outreach to other investor networks to bring more attention to the issue and highlight the risks facing companies
Please contact Mary Beth Gallagher at or (973) 509-8800 with any questions or to share comments and ideas related to the Campaign.
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