Making Their Money Work for Them

Dignity Health’s shareholder advocacy strategy is pushing corporate America to address issues such as climate change.

By Sean Moores on May 8, 2017


Sister Mary Ellen Leciejewski (left) and Sister Susan Vickers (right) are helping to lead Dignity Health’s shareholder advocacy efforts.

Dignity Health is a huge organization. It is one of the largest health care systems in the nation, with more than 9,000 physicians, 62,000 employees and 400 care centers spread across 22 states. So when it decided to make a move in the area of environmental sustainability—whether that’s installing more energy-efficient lighting or reducing its total waste far below the industry average—it had a real effect.

But while Dignity’s internal sustainability efforts go a long way toward reducing its carbon footprint and saving space at local landfills, its environmental activism doesn’t stop at its property line. Dignity recognizes its status as one of the major players in the health care industry, and it is committed to using its influence to protect the planet.

“It all aligns with our mission of caring for creation. We only have one planet. It is a gift, and we want to be good stewards of everything given to us—whether it be natural resources, financial resources or the people we care for,” said Sister Mary Ellen Leciejewski, director of Ecology for Dignity Health.

With more than $17 billion in assets, Dignity Health has a robust investment portfolio, and one way it seeks positive change is through its shareholder advocacy program, which is actively pushing corporate America to address social issues, including climate change.

Sister Susan Vickers, vice president for Corporate Responsibility, sees the shareholder advocacy program as fundamental to Dignity’s sustainability efforts. “We recognize that protecting our environment is grounded in our mission to heal and to promote health, and especially in our commitment to move beyond the hospital walls to look at health issues in the community and how we might use our resources and our leverage to improve the broader health of the community. That is the focus of much of our public policy and shareholder advocacy work,” said Vickers.

For many years, Dignity has used its advocacy voice as a shareholder in a number of companies to address a wide range of social and environmental issues. “We look at companies that we own stock in that face a particular risk or could play a particular role in climate change, and evaluate how we could nudge them through a shareholder proposal to step up to the plate,” said Vickers.

There have been successes with this approach. In the early 2000s, Dignity filed a shareholder proposal with General Electric asking the company to assess, disclose and reduce its greenhouse gas emissions. It was very early in the climate change saga, said Vickers, and the resolution was on the proxy for two years. But in the second year, she was surprised when, at a shareholders meeting in North Carolina, General Electric CEO Jeffrey Immelt said: “Sister Susan, I agree, and we are going to do exactly what you ask in this proposal.”

True to his word, General Electric did what the shareholder proposal asked, disclosing its greenhouse emissions and setting goals for reducing them. It even developed a software program to assess greenhouse gas emissions at its 500 largest operations around the globe. “It’s not often a shareholder proposal has that effect, but this time it did. It shows you just have to stay with it,” said Vickers.

But Dignity didn’t stop there. It is committed to deepening its shareholder advocacy around climate change. It recently joined with others at the Interfaith Center on Corporate Responsibility in New York to file shareholder proposals with a number of companies to address various aspects of climate change and encourage strategies to move toward a low-carbon economy.

Dignity has proposals that will be in the proxies at Exxon, Chevron, Marathon and Noble Energy. While most proposals naturally go to gas companies, Dignity has also asked big investment firms such as BlackRock, T. Rowe Price and J.P. Morgan Chase, which typically abstain from climate change resolutions, to look at their proxy voting guidelines to see if they could be adjusted to better respond to resolutions on climate change.

Environmental sustainability and the threat of climate change are also having an effect on Dignity’s investment portfolio. “Just about 18 months ago, we took a look at our investment policy and guidelines to determine if we could more implicitly address climate change through our investments, because we recognize climate change is the most pressing health issue our generation faces,” said Vickers.

After an extensive discernment period, Dignity’s board of directors decided to amend its policy to explicitly state that one of the goals of the company’s investment program is to promote environmental sustainability. “It is now on par with seeking financial returns,” said Vickers.

Dignity also asked its investment staff to assess companies that it proposes for its portfolio on the risks these companies pose to the planet due to climate change and on their strategies to move toward a low-carbon economy, added Vickers. The investment staff was also asked to actively work to identify companies that represent climate solutions, such as investments in renewable energy and similar processes.

Dignity went even further by instituting a new screening process prohibiting any companies that are significantly involved in thermal coal or distributing energy produced by thermal coal from being part of its portfolio. “In essence, we were saying thermal coal, like weapons and tobacco, is so threatening to human health throughout its life cycle—from mining to transporting to the type of pollution it produces when it is burned for energy—that we don’t want to invest in it,” said Vickers. “It is that dangerous to human health.”

Added Leciejewski: “We will continue working with others in the health care and business communities to move sustainability forward. We know we can’t do it alone. This is a new day, and we have to find new ways. The more we can work together on this, the better.”