Thursday, May 19 2022

The proposals from the shareholders of Lockheed Martin and Northrop Grumman called on the companies – some of the largest arms producers in the world – to complete a human rights due diligence report, as well as an assessment of impact “examining the potential human rights impacts associated with high-risk products and services”, including in conflict-affected areas.

ShareAction Research Director Felix Nagrawala said: “Human rights organizations have recorded consistent and indiscriminate use of Lockheed Martin weapons against civilians and have linked their weapons to war crimes and human rights abuses. of international humanitarian law in Yemen. “

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According to the report, only 24 of the 65 largest asset managers in the world do not have stakes in arms companies.

This was potentially due to exclusions due to the nature of their business, according to the report.

Nagrawala said, “Both resolutions would have passed had these 11 managers voted in favor of the proposal. In their voting records, these managers said they believed there was already sufficient disclosure.

However, an analysis of company reports reveals that while Lockheed Martin has a code of corporate ethics and Northrop Grumman has a human rights policy, both companies lack reporting on their historical impacts and potentials associated with the use of their products.

“In addition, ISS, the larger and more progressive of the two largest proxy advisory firms, has recommended that shareholders vote in favor of the resolutions.”

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ShareAction pointed out that Lockheed Martin and Northrop Grumman have contracts with Saudi Arabia, Israel and the United Arab Emirates.

A spokesperson for Vanguard said addressing social and environmental issues that pose a financial risk is a top priority for the fund manager.

They said: “If a company does not demonstrate significant progress in managing these risks, we can hold it accountable through a proxy vote.”

BlackRock and State Street have also been contacted for comment.

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