IMPACT REPORT 2018

Zevin Asset Management, LLC

Managing Sustainable & Responsible Portfolios Since 1997

SEPTEMBER 2018
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About Zevin Asset Management

• Zevin Asset Management is a Boston-based sustainable and responsible investment manager

founded in 1997.

• Our experienced team combines economic and financial analysis with sustainability in our
investment process and currently manages $500 million in assets in diversified global portfolios.

• Our investment philosophy and process are deeply rooted in the belief that less risk leads
to better returns for our clients over time. Our investment process incorporates environmental,
social, and governance (ESG) analysis as one of the means to help lower risk.

• We also actively employ shareholder advocacy and corporate engagement to help enhance
shareholder value and create positive social impact on behalf of our clients.

OUR TEAM

Sonia Kowal Steven A. Dray, CFA, CFP® Jennifer Kelley Benjamin C. Lovell, CFA
President Chief Investment Officer & Chief Operations Officer & Senior Portfolio Manager
Senior Portfolio Manager Chief Compliance Officer

Amber Fairbanks, CFA Philip Hergel Stig Zarle Pat Miguel Tomaino
Portfolio Manager & Senior Quantitative Senior Securities Analyst Director of Socially
Senior Securities Analyst Analyst Responsible Investing

To learn more, visit

Julie Barthelemy
Client Service Associate
www.zevin.com or contact
Pat Miguel Tomaino, Director
of Socially Responsible
Noah Simes Brian Swope Investing (pat@zevin.com)
Administrator Back Office Administrator

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Working for Impact

Dear stakeholders,

Z
evin Asset Management is proudly committed to socially responsible investment
performance. That means building responsible portfolios for our clients, and then engaging
with portfolio companies to move them toward environmental sustainability, social justice,
and long-term risk management.

That process, called impact investing or shareholder advocacy, is at the heart of what we do, and it
helps our clients integrate their values into their investments by achieving impact beyond just invest-
ment performance. Socially responsible investing also helps protect and grow value. We are experts
in integrating environmental, social, and governance (ESG) information and standards into our invest-
ment analysis to give clues about corporate risks and opportunities. ESG research grants us a more
complete understanding of our investments than what is
captured by traditional financial analysis.
We are known particularly for
We are known particularly for leading our peers in innovative
shareholder engagement and speaking out frequently on issues leading our peers in innovative
such as human capital management, climate risk, and racial shareholder engagement and
justice. Late last year, Pat Miguel Tomaino, our director of
socially responsible investing, was featured on Bloomberg speaking out frequently on
Businessweek’s shortlist of “Ones to Watch”—a recognition
of our impact work and Pat’s contribution as a rising star
issues such as human capital
in business and innovation. management, climate risk,
As a lofty but intensely necessary goal, we aim to do more and racial justice.
than merely chip away at the margins while negative systems
continue uninterrupted. Part of this includes the way we con-
duct ourselves. We are proud to be a Certified B Corporation, embodying the change we wish to
see in others, and we were proud to be honored by B Lab (the group that certifies B Corporations)
for the third year in row. This year, we earned a place on B Lab’s elite “Changemakers” and “Best for
Customers” lists. We also use our investor voice to participate in public policy debates on social and
environmental issues and collaborate with civil society leaders.

This hard work has been honored by the experts at Real Impact Tracker, who recognized Zevin Asset
Management as a leading manager for positive impact based on our capabilities in ESG analysis, the
quality and impact of our shareholder advocacy, and our public policy leadership. In this era of big
Wall Street firms confusing people with ESG-lite marketing and “impact washing,” this recognition
is an important differentiator.

I hope the following pages give you a sense of the impact we create on behalf of our clients and how
we approach this valuable work. Our team looks forward to your feedback and continued support.

Sonia Kowal
President, Zevin Asset Management

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Doing Business with Us

At Zevin, we believe that we are differentiated from our peers and the broader
investment industry not only in how we proudly employ our own unique brand of
socially responsible investing and strive to reduce risk in our clients’ portfolios,
but also in the construction and conduct of our firm.

OUR PEOPLE WA L K I N G T H E WA L K
We have a talented team with diverse backgrounds, As a Certified B Corporation, Zevin Asset
educations, and experiences. We manage our firm Management has committed to use our business
and design our compensation in a remarkably flat as a force for good, and we practice what we preach
and collaborative manner. In addition to working to our portfolio companies. Being a Certified B
collaboratively, our business values include promoting Corporation requires that we consider employees,
everyone’s understanding and participation in as community, and the environment when making
many different aspects of our work as possible. all key decisions. We find it helpful to use the
We think that this improves our performance and B Corporation framework to measure our own
engenders job satisfaction. Our investment discus- corporate sustainability. The following features
sions integrate the disciplines of economics, financial are key to our approach:
analysis, and sustainability. Most of the members of
• Generous tuition reimbursement
our team have cut their teeth at larger firms and made
• Paid paternity, adoptive, and caregiver family leave
the careerdecision to shift to a firm with a strong
• Fully paid healthcare insurance for staff and family
culture that better reflects their values.
with low deductibles, life insurance, and disability
insurance
OUR STRUCTURE
• Fully paid public transportation
Zevin Asset Management is a 100 percent employee- • 401k retirement plan with firm contribution
owned, majority women-owned firm. This is a rarity regardless of staff contribution
in the investment world. Even more unique is our • A fully paid defined benefit pension plan
philosophy of issuing partnership units to all tenured • Meeting our electricity needs by buying
employees every two years, which contributes to 100 percent Massachusetts wind energy RECs
our flat compensation structure. Seven of our eleven from the non-profit MassEnergy
employees are senior professionals with identical
salaries and bonuses. This serves to align them with Our firm is also differentiated by a depth and sincerity
the success of the firm rather than competing with of commitment by its employee owners to social
each other, and it further strengthens a culture change causes. For example, we aim to donate 0.5
of collaboration. percent of our gross revenues to non-profits, match
individual employee giving up to $500, and provides
volunteer time for employees.

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 Integrating ESG for Socially Responsible Performance

Responsible Investing

OUR PROCESS
Our team works together to serve our clients and
deliver positive impact. Zevin Asset Management
blends traditional company research with global
macro considerations and environmental, social, and
governance (ESG) analysis in order to minimize risk,
identify attractive opportunities, and build positive
impact.

After our equity analysts identify interesting

investments, our director of socially respon-
sible investing meets with companies,
reviews press coverage, engages issue
experts, and consults third-party research
services to define the most important
ESG issues. The equity analysts and
director of socially responsible investing
review ESG factors as a team, and a com- ESG Public
Research Policy
prehensive recommendation is presented
to our Investment Committee.
Advocacy Screening
A D V O C A C Y A N D M AT E R I A L I T Y
Our process aims for companies that can deliver E S G A D VA N TA G E
sustainable performance in the long term while
Shareholder engagement, along with ESG research,
meeting our socially responsible investing screens
produces information that informs our integrated
(see “Portfolio Construction,” p. 6). Along the way,
view of companies over time. For instance, if a
our team identifies key issues for advocacy and
company in our portfolio resists change or refuses
progress with each company that we research.
to provide information to investors, this may influ-
Issues that we select for advocacy must be material. ence our ongoing view of the company’s approach
This means that they are tied to major risks and to risk management.
opportunities affecting the company (such as energy
use in manufacturing or human capital/inclusion
in the tech sector). Issues must also fall within the
company’s locus of control. In this way, we aim to
address issues that can affect a company’s bottom
line and that can be influenced via engagement.

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Portfolio Construction

W
e help our clients integrate their beliefs and values into their investments by achieving positive
impact beyond investment performance. We do that by building responsible stock portfolios
in which companies contribute to certain sustainable development outcomes:
• Alternative energy, including solar and wind power, geothermal power, and some types of biomass energy
• Environmental technology and solutions, e.g. energy conservation
• Public transport
• Housing and other products/​services that improve quality of life for the under-​served
• Socially beneficial products or processes such as green manufacturing
• Companies that actively reduce their energy use and carbon footprint, promote biodiversity of plant and
animal life, support organic farming and non-​genetically engineered food, and support sustainability

Additionally, we are cognizant of the United Nations Sustainable Development Goals (SDGs)—a global
agenda to end poverty by 2030. Analyzing the SDGs helps Zevin Asset Management further understand the
impact of our investment approach through the activities of the companies in our portfolios.

Danaher (DHR)
Danaher is a US-based healthcare and industrial products company with products that aid in the
discovery and development of medical solutions and environmental solutions that promote efficient
use of scarce resources. Danaher’s products directly support multiple Sustainable Development
Goals including Good Health and Well-Being (SDG 3). After divesting low-growth non-core industrial
assets, Danaher is now focused on providing positive solutions in the fast-growing areas of biologic
development, medical testing, and water filtration/management.

Vestas Wind Systems (VWS)

Denmark-based Vestas manufactures and services wind power equipment
that helps customers address the growing demand for cleaner energy. We
expect the growth of alternative energy to continue as countries address
climate change. Vestas has led research and development helping to reduce
the cost of wind power, approaching parity with traditional energy sources
on a levelized cost of electricity (LCOE) basis. Vestas supports SDGs 7
(Affordable and Clean Energy) and 13 (Climate Action).

Novozymes (NZYMB DC)

Novozymes produces industrial enzymes and microorganisms—inputs that
are used in various processes to help customers produce more from less
and reduce costs. Key end markets for the company’s products include animal
feed, detergents, and corn ethanol. Novozymes products help the world
achieve Clean Water and Sanitation (SDG 6). In products such as detergents
and insecticides, the company’s enzymes and microorganisms replace
toxic chemicals, many of which end up polluting waterways. As a result,
Novozymes additionally supports conservation of oceans and seas (SDG
14: Life Below Water), which would otherwise be harmed by chemicals.

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 Unilever (UL)
Unilever is one of the largest consumer staples companies in the world. Through its four business
segments (Personal Care, Foods, Home Care, and Refreshments), the company’s branded products
run the gamut from soap to tea to toothpaste and beyond. Unilever’s sustainable development plan
(focused on health and well-being for customers, as well as halving the company’s environmental
impact by 2030) was designed to support the SDGs. Most notably, Unilever’s focus on personal
care products and its massive distribution reach support Good Health and Well-Being (SDG 6).
Unilever estimates that its handwashing, sanitation, oral health, and safe drinking water programs
(and products) reached 538 million people by the end of 2016.

Automatic Data Processing (ADP)

ADP is a US-based firm providing human resources management software
and services to employers around the world. The company’s products
help employers assess and improve the health of their human capital and
connect employees with benefits. Turnkey payroll and human resources
solutions enable small- and medium-sized enterprises to scale and hire
efficiently, as well as offer benefits to their employees in support of SDG
8 (Decent Work and Economic Growth). In many markets, ADP provides
tools for companies to analyze and address pay gaps between workers
of different genders and races. That business is set to increase and
supports Gender Equality in line with SDG 5.

Attention to ESG factors in portfolio construction also helps us manage client exposure to serious long-term
risks. We exclude from client portfolios companies that engage in destructive activities that harm people and
planet, as well as threaten investor value.
• Harmful industries: We exclude companies that produce nuclear energy, weapons for military or civilian
use, tobacco, harmful agrochemicals such as toxic pesticides, and genetically modified organisms (GMOs)
with the exception of companies producing recombinant human drug products. We also refrain from
purchasing the shares of companies with a substantial involvement in gambling, harmful chemicals,
pornography, thermal coal, factory farming of meat or fish, incarceration, or oil sands development.
• Human rights: We avoid investing in companies with material activity and/​or investments in repressive
regimes where domestic or broad-​based international constituencies have called for sanctions or divestment.
More broadly, we exclude companies that have exhibited a systematic disregard for human rights.
• Environment: We strive to exclude egregious environmental offenders. Companies with large environmental
footprints such as oil or mining companies are also held up to a higher level of scrutiny given the increased
risk of breaches, regulatory crackdown, and fines. In these industries, we try to pick among those with the
best records, given the inherently polluting nature of their activities. We can also build fossil-fuel free
portfolios for clients upon request.
• Stakeholders: Finally, companies that have continual and systematic lapses in their treatment of stakeholders
(customers, suppliers, employees, and communities) are avoided. 

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Our Impact Footprint

O
ur ESG research and integration aims to that our portfolios represent a more responsible,
create a portfolio that is tuned to support sustainable choice for clients relative to alternatives,
well-managed, socially responsible companies. such as investing in funds that simply track an index
We measure the footprint of our model portfolio on like the S&P 500 or the MSCI ACWI. At the same
several ESG dimensions. Overall, the results suggest time, some challenges remain for portfolio companies.

THREE KEY INSIGHTS

1 Our analysis indicates that Zevin Asset Management’s

portfolios have a smaller climate change impact compared
to the S&P 500 index average.
2 This is consistent with the fact
that companies in our model portfolio
tend to have better ESG performance
as measured by the research firm
Sustainalytics.

Energy Use Per Unit of Revenue GHG Emissions Per Unit Sustainalytics Rank (Out of 100)
of Revenue
140 100
141.0
120
80
100 110.6
104.7
80 60
61.6
60 52.4
63.2 40
40
20
20

0 0
Our S&P 500 Our S&P 500 Our S&P 500
Portfolio Index Portfolio Index Portfolio Index

3 Corporate governance and board practices are mixed. Average CEO compensation in our portfolio
is more reasonable compared to the S&P 500 average, and our average CEO tenure is slightly shorter
than the market. However, companies in our portfolios are less likely to have high independence and
diversity on the board of directors. This reflects the prevalence of companies in parts of Asia where
board composition remains a challenge, and it is a continuing focus of shareholder advocacy.

Average CEO Prevalence of Companies Prevalence of

Compensation Average CEO with 80% Independent Companies with 20%
(US dollars) Tenure (years) Directors Women Directors

Our Portfolio $ 11,390,957 6.3 54% 59%

S&P 500 Index $ 15,054,172 6.8 82% 65%

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Active Ownership

N
o company is perfect, and every company can BREAKDOWN BY YEAR
improve to better address major ESG risks and
2017
opportunities. So, after we build a portfolio, we
channel our clients’ investor voices to catalyze change. Company meetings voted 285

That starts with our commitment to vote conscientiously Total proposals voted 3,732
at hundreds of company shareholder meetings every year. Percent votes against
70%
management recommendation
Shareholder meetings are important avenues for investors Shareholder proposals voted 163
to express concerns about key issues and vote on major Percent support for ESG
questions like board nominations and executive compen- 83%
shareholder proposals
sation. We exercise our clients’ voting rights according to Percent support for management
37%
our proxy voting policies, which address a range of good compensation plans
governance issues and guide our approach to voting on
shareholder proposals—annual meeting items that are 2018 to Date
submitted by fellow investors and often address pressing Company meetings voted 181
environmental and social issues.
Total proposals voted 2,471

Our proxy voting policies generally support imposing Percent votes against
76%
management recommendation
reasonable limits on the compensation of top executives,
increasing and empowering outside directors, upholding Shareholder proposals voted 118

shareholder rights, and promoting improved ESG Percent support for ESG
96%
shareholder proposals
management and disclosure of more complete infor-
mation about company policies. Percent support for management
38%
compensation plans

From January 2017 to September 2018, Zevin Asset

Management voted on 6,203 proposals (including
management-sponsored proposals and shareholder
proposals) at 466 shareholder meetings. After we build a portfolio,
• Over that period, our proxy voting policies dictated we channel our clients’ investor
that we vote against the recommendations of manage-
ment 73 percent of the time. In most cases, those voices to catalyze change. That
votes were against company directors when the starts with our commitment
board lacked racial or gender diversity.
to vote conscientiously at hundreds
• Companies also typically recommend that investors
vote against shareholder proposals. However, we of company shareholder meetings
supported 89 percent of shareholder proposals, most
often because these items raised important ESG
every year.
risk issues and requested reasonable disclosures.
• We also used our votes to express concern with CEO
pay packages that are exorbitant or not sufficiently tied
to performance metrics. As a result, we supported only
38 percent of executive compensation plans that were
presented by management for a vote.

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Impact Highlights: Achieving Corporate Change

Z
evin Asset Management also works to create impact by engaging directly with portfolio companies.
In the past two years, we have channeled investor voices to succesfully move companies, industries,
and policymakers in the right direction. These milestones draw on our ability to persuade management
teams to address material issues and on our willingness to broaden our impact through thought leadership
and press outreach.

S E L E C T E D C O M PA N Y W I N S P O L I C Y AC T I O N
• Our work on climate change at PepsiCo and • We submitted an official statement to the U.S.
CVS Health spurred the companies to commit to Senate Finance committee in support of federal
science-based GHG targets that will help society policy action on paid family leave, which would
meet the goals of the Paris Climate Accord. alleviate risks for companies and improve human
capital management market-wide.
• Our shareholder proposal challenging the major
pipeline company Kinder Morgan to assess its • We joined with other investors demanding higher
long-term climate risks won a majority vote standards regarding deforestation, working con-
in 2018. The company has since committed to ditions, and human rights in the Roundtable on
publishing two climate risk reports along the Sustainable Palm Oil, a multilateral agreement
guidelines of the Taskforce on Climate-related that was designed to reduce palm oil impacts.
Financial Disclosure. • In 2017, we testified before the Massachusetts
• Recurring meetings we led with UPS on climate legislature in favor of reasonable carbon pricing
change strategy helped convince the company to initiatives to promote innovation and sustainable
set a quantitative target for sourcing renewable business models.
electricity and more sustainable fuels. • We supported and signed several initiatives urging
• Our first-ever investor initiative focused on paid policymaker and industry groups to end attacks
family leave convinced Starbucks, CVS Health, on investors’ right to file shareholder proposals.
The TJX Companies, and Walmart to improve
their benefits and address human capital risks. THOUGHT LEADERSHIP

• We are pioneering shareholder proposals to move • Since 2017, we have published several white papers
companies toward pay fairness based on gender, addressing company risks and suggesting remedies
race, and ethnicity—negotiating a successful on climate change and the energy industry, racial
outcome at Colgate-Palmolive. justice and impact investing, paid family leave and
human capital management, and how tech com-
• Ongoing dialogue with Apple on workforce inclu- panies can pursue financial returns by supporting
sion built pressure for the company to appoint its inclusive and creative workplaces.
first-ever VP of diversity, and we’re pushing ahead
with a human capital initiative challenging tech • We also published an analysis of changes in the
companies such as Alphabet to tie racial and automobile industry and opportunities associated
gender equity objectives to CEO pay. with electric vehicles.

• In 2018, we convinced Booking Holdings • We made the case for socially responsible impact
(Priceline) to publish its first-ever sustainability investing in the popular press.
report and Marriott International to improve • Our shareholder proposal at Alphabet, asking the
its own report with new workforce composition tech giant to link a portion of executive compensa-
figures. tion to inclusion and human capital management
goals, garnered international media attention.

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 How We Engage: The Numbers
O
ur milestones with companies are hard-won. We routinely meet with senior managers, send letters and
e-mails, lead collaborative engagements with other investors, and file shareholder proposals on behalf of
our clients, all with the purpose of improving company practices. Since the beginning of 2017, we have
created 216 engagement communications with portfolio companies (including meetings, letters, and shareholder
proposals). As evidenced below, these ran the gamut, covering a wide range of ESG factors, sectors, and specific
issue concerns.
ESG Breakdown | Total Engagements: 216
Engagements
Addressing E, S & G
86
64
40
Social
Engagements 26
Governance Engagements
Sector Breakdown
Airlines 1
Alternative Energy 1
Automobiles 2
Banks 6
Chemicals 3
Commercial Services 6
Consumer 8
Containers 2
Defense 1
Distribution 2
E-Commerce 9
Electronics 14
Financial Services 12
Food 7
Health 6
Health/Retail 5
Hospitality 3
Housewares 1
Industrial 5
Insurance 4
Logistics 12
Manufacturing 3
Media 4
Oil and gas 15
Pharmaceutical 12
Pipelines 3
Real Estate 10
Retail 25
Technology 25
Telecom 8
Utility 1
Progress of Engagement | Total Engagements: 216
Win 12 Ongoing
185
Progress 19
(Partial Win)
Environmental
Engagements
Engagement issues
2-degree scenario report 2
Address prison labor in the supply chain 1
Address risks from private corrections
 and prison labor 17
Adopt an independent chair policy 4
Animal welfare 1
Board diversity 1
Comprehensive lobbying disclosure 11
Detail public policy priorities in light
 of regulatory uncertainty 86
ESG and executive compensation 3
Immigration detention and family separation 2
Improve sustainability report 3
Inclusion and executive compensation 14
Lobbying and risk associated with ALEC 2
Paid family leave 13
Privacy and free expression 2
Product safety and recalls 1
Proxy voting 1
Publish a sustainability report with greenhouse
 gas targets 1
Reaffirm support for Paris Climate Accord 11
Renewable energy goals 2
Report on CEO pay analysis relative to
 overall pay scale 1
Report on low-carbon business model 2
Report on race and gender pay gaps 5
Report on risks of executive compensation
 in light of public outcry over drug prices 1
Respond to CDP climate risk survey 14
Responsible financial services 5
Responsible proxy voting 3
Science-based greenhouse gas targets 3
Supply chain labor standards 3
Workforce diversity report 1
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 How We Engage: Tracking Progress

Review a sample of our ongoing and completed company engagements since 2017. We track the
progress of our company contacts to press for accelerated change and risk management.

CO M PA N Y ACTION ASK RESPONSE I M PAC T

Franklin Shareholder Report on how the asset management Following our shareholder proposal, Franklin Resources The company has more than $750 billion in assets under
Resources proposal company engages with portfolio (the parent of Franklin Templeton) improved its approach management and votes at hundreds of shareholder meetings per
Financial (GOVERNANCE) companies and votes at annual meetings to climate risk management at its own portfolio companies. year. More informed proxy voting will press Franklin Templeton’s
services in a way that addresses long-term Franklin voted for 24 percent of climate-risk-related portfolio companies toward climate risk disclosure and
climate change–related risks shareholder proposals in 2017, compared to only eventually climate action.
10 percent in 2016.
Apple Shareholder Implement accelerated racial and gender In 2017, Apple bent to pressure from employees, activists, The new vice president of inclusion and diversity will improve
IT proposal integration plan for board of directors and investors like Zevin to create a new executive executive focus for a company still struggling to find and retain
(SOCIAL) and top executive ranks position overseeing diversity and inclusion. diverse technical employees.
Starbucks Shareholder Assess the company’s current paid family Starbucks agreed to extend paid family leave benefits to The company’s prior policy left out nearly 150,000 staff who
Consumer proposal leave policies, address inequalities in its fathers and adoptive parents regardless of whether they work in Starbucks stores. Dads and adoptive parents who work
(SOCIAL) workforce, and maximize the human work in corporate roles or as baristas in stores. as baristas were left out completely. The changes provide more
capital–related benefits of strong paid coverage and potential for the company to invest in and retain
leave workers.
AT&T Shareholder Create strong incentives for environmen- The company agreed to detail certain ESG goals and Research from Harvard Business School shows that tying CEO
Telecom proposal tal and social risk management by linking performance in its proxy statement for the first time. This compensation to sustainability metrics improves management
(GOVERNANCE) a portion of CEO’s pay package to ESG will be an annual disclosure, and it will be accompanied of those issues and protects shareholder value in the long term.
metrics by a new narrative disclosure on ESG accomplishments
and challenges from the prior year.
UPS Shareholder Set quantitative, company-wide targets Our proposal convinced UPS to enter a high-level, UPS has more than 18,000 operating facilities and 119,000
Logistics proposal for obtaining energy from renewable recurring climate strategy dialogue with us and also vehicles. This move means that 25 percent of UPS’s building
(ENVIRONMENTAL) sources to adopt specific goals around sourcing renewable electricity and 40 percent of all ground fuel will be sustainable
electricity and low-emission vehicles. by 2025.
T. Rowe Price Shareholder Report on how the asset management Since we began filing shareholder proposals, T. Rowe With nearly $1 trillion in assets under management, T. Rowe
Financials proposal company engages with portfolio Price has hired a Director of Research for Responsible Price votes at hundreds of shareholder meetings per year. More
(GOVERNANCE) companies and votes at annual meetings Investing, improved ESG-related disclosures, and informed proxy voting and increased attention to ESG invest-
in a way that addresses long-term provided additional training regarding ESG proposals ment risks will help to manage long-term risks.
climate change–related risks and voting.
Kinder Morgan Shareholder Report rigorously on risks related to A historic majority vote of 59.7 percent forces the Rigorous climate risk reporting could influence Kinder Morgan’s
Oil and gas proposal energy prices, climate change, and pipeline company to implement our shareholder proposal business planning in the future. There are still many potential
(ENVIRONMENTAL) carbon regulations—as many major and publish a comprehensive climate risk report. pitfalls, however, and we are leading an investor group to review
oil majors, such as Shell and Chevron, the company’s next steps.
are taking steps in that direction
CVS Health Shareholder Assess the company’s current paid family CVS Health added a broad-based four-week benefit for Changes provide more coverage for many of the company’s
Health/retail proposal leave policies, address inequalities in its all full-time parents (including birth mothers, fathers, more than 200,000 employees and potential for the company
(SOCIAL) workforce, and maximize the human adoptive parents, and foster parents). to invest in and retain workers. This is also a valuable change to
capital–related benefits of strong paid retain former Aetna workers as the two companies combine.
leave
Marriott Shareholder Disclose and address pay discrepancies The hotel giant agreed to publish information on the Overall, women make 80 cents for every dollar men earn.
International proposal between workers of different genders, systems it uses to police pay discrepancies, and to Women of color earn even less—only 66 percent of the pay of
Hospitality (SOCIAL) races, and ethnicities working in the explain how they are trying to tackle pay equity in comparable white male workers—and these effects are especially
same roles hotel worker positions. prevalent in the service industries. Improved disclosure on this
issue is the first step toward better management and equality.
Chevron Shareholder Require the chairman of the board This proposal received strong vote totals and support Independent oversight would improve climate risk management
Oil and gas proposal to be an independent director from proxy advisory firms in 2017 and 2018. However, for a company that is tied to a fossil fuel economy that is threat-
(GOVERNANCE) like many U.S. companies, especially in the energy sector, ened in the long term.
Chevron remains resistant to independent oversight.
Booking Shareholder Report to investors and the public Booking Holdings (the parent of Priceline) responded Lacking any sustainability reporting, Booking Holdings is a
Holdings proposal on key environmental and social risks to two shareholder proposals by agreeing to publish significant outlier among peers. A basic sustainability report will
Media (ENVIRONMENTAL) and policies its first-ever sustainability report on the web in 2019, address risks and focus management around key environmental
including key energy and environmental data along and human capital challenges in the future.
with information on workforce composition.
Intel Meetings Assess and address risks from the use At our urging, Intel reviewed its contracts and found This is a major change that will begin to improve supply chain
IT (SOCIAL) of U.S. prison labor in tech supply chain limited purchases from suppliers that used prison labor. risk management, not just for Intel but for many of the 120 other
Intel updated its supply chain policies (and those of electronics, retail, and toy companies that implement the RBA
its supply chain oversight consortium, the Responsible Code of Conduct.
Business Alliance) to prohibit “exploitative prison labor.”

n Win n Progress (partial win) n Ongoing

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CO M PA N Y ACTION ASK RESPONSE I M PAC T
CVS Health Shareholder Set quantitative, company-wide targets After submitting a proposal, we negotiated with CVS to With more than 1,500 facilities under lease and significant
Health/retail proposal for obtaining energy from renewable make progress on climate change strategy. The company logistics impacts, CVS should address climate impacts within the
(ENVIRONMENTAL) sources formally committed to developing a science-based Paris Agreement framework for responsible emissions reduction.
greenhouse gas emissions target (SBT), which will be Committing to develop an SBT represents an ambitious strategy
certified by an independent body. that will be fulfilled through future engagement, energy
efficiency efforts, and renewable energy deployment.
Colgate Shareholder Disclose and address pay discrepancies Colgate agreed to conduct an annual pay equity review Better disclosure on this issue is the first step toward better
Palmolive proposal between workers of different genders, and improve workforce composition reporting. management and equality. We’ll keep pushing Colgate to publish
Consumer (SOCIAL) races, and ethnicities working in the its remaining pay gap and set a new standard for pay fairness
same roles and human capital management.
All Portfolio Letter Considering regulatory uncertainty Companies responded with a range of concerns and This contact informed our view of the regulatory risk facing
Companies (ENVIRONMENTAL, after the U.S. election in 2016, we asked U.S.-centered public policy priorities regarding taxation, companies in our clients’ portfolios. It also strengthened ties
SOCIAL, AND
All sectors portfolio companies to detail their most trade, regulation, climate policy, and other issues. with companies and built new channels of communication
GOVERNANCE)
important public policy priorities. for advocacy.
Citrix Shareholder Link a portion of senior executive We withdrew our shareholder proposal when Citrix This step will increase executive accountability at a firm that
IT proposal compensation to inclusion and human agreed to spell out how diversity and inclusion factors had only recently built an inclusion team and clear goals. We will
(SOCIAL) capital management goals influence the company’s annual CEO performance continue to engage Citrix on inclusion and diversity, alongside
evaluation. other portfolio tech companies struggling to address race and
gender justice.
Alphabet Shareholder Link a portion of senior executive Our proposal received global media attention and the Competent inclusion and diversity strategy is essential for tech
IT proposal compensation to inclusion and human votes of more than a quarter of Alphabet’s external companies to attract and recruit the most talented tech workers,
(SOCIAL) capital management goals investors. In a subsequent report, Alphabet signaled the regardless of race or gender. For example, McKinsey & Company
beginning of an encouraging shift: senior executives will research indicates that inclusion leaders in the tech sector
play a more direct role in the racial and gender inclusion outperform peer companies.
strategy. Investors need more specifics, so we will keep
pressing for progress.
Several Letter After the Trump administration withdrew After urging by Zevin and several peer investors, The Paris Climate Accord is evidence of a global policymaking
Companies (ENVIRONMENTAL) support for the Paris Climate Accord, we Google and eBay joined dozens of other companies consensus to prevent catastrophic climate change, and it will
Several sectors wrote to several companies urging them reaffirming their support for climate action. continue to drive regulation around the world. Companies that
to support business stability and climate support and prepare for regulation in line with the Paris Accord
risk management by reaffirming their will be better able to manage long-term risks and opportunities.
support for the Accord.
Amazon Meetings & Clarify how supplier code of conduct After receiving our shareholder proposal challenging the Amazon remains a reluctant engagement partner, but our
IT Shareholder applies to risks faced by contract delivery irresponsible use of criminal background checks in hiring, challenging approach helped create a dialogue and highlighted
proposal drivers and on-demand workers Amazon agreed to a first-ever series of investor meetings investor concern over risks facing tens of thousands of at-risk
(SOCIAL) on social risks and worker standards. workers associated with the company.

Johnson & Shareholder Require the chairman of the board to We joined with the Interfaith Center on Corporate Independent oversight would improve risk management.
Johnson proposal be an independent director Responsibility to press this good governance reform Together with investor peers, we will keep pressing companies
Pharmaceutical (GOVERNANCE) at Johnson & Johnson, arguing that improved oversight across the pharmaceutical sector to address over-marketing,
of management was necessary due to risks from over- especially related to the devastating opioid epidemic, where
aggressive development and marketing of opioids. The companies face increased scrutiny from regulators and
company agreed to change its governing documents policymakers.
and review the question of separating the currently
combined chair and CEO roles.
ExxonMobil Shareholder Report rigorously on risks related After a landmark majority shareholder proposal vote in Rigorous climate risk reporting could influence ExxonMobil
Oil and gas proposal to energy prices, climate change, and 2017, ExxonMobil grudgingly responded to the repeated planning in the future. There are still many potential pitfalls,
(ENVIRONMENTAL) carbon regulations, as many major oil calls of several investors and committed to improving however, and a large coalition of investors and climate change
majors, such as Shell and Chevron, 2-degree scenario reporting. experts are reviewing the company’s next steps.
are taking steps in that direction
Rakuten Meetings Discontinue sales of ivory on We helped convince Rakuten, after several meetings In 2014, the company’s platform carried more than 28,000
Retail (ENVIRONMENTAL) e-commerce platform with the Japanese e-commerce company, to stop the sale advertisements for elephant ivory and 1,200 for whale products.
of ivory and sea turtle products through its websites. This policy change will shift responsibility to Rakuten manage-
ment and help curtail those risky sales.

n Win n Progress (partial win) n Ongoing

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How We Engage: Company Outreach

O
ur outreach to companies is built from painstaking research and the ability to make a business case
for addressing ESG issues. This is evident in the following example of a recent
letter to Apple on supply chain labor standards:

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Network and Collaboration

C
ollaboration and solidarity make our positive impact investing possible. Zevin Asset Management
leverages its large network of non-profits and civil society groups, in order to learn from those groups
and to build support for dialogues with corporations and legislators. We take leadership positions in
various organizations that work to promote investment stewardship and corporate engagement.

These partners include:

• The Interfaith Center on Corporate Responsibility • Building A Sustainable Investment Community
(ICCR). Our president serves on the Board of (BASIC). Zevin is an associate member of the
Directors for ICCR, a “coalition of faith and values- Boston chapter of BASIC, an organization that
driven organizations who view the management of connects “Boston-area [socially responsible invest-
their investments as a powerful catalyst for social ment] professionals via educational, social, and
change” (The Interfaith Center on Corporate networking activities (Building A Sustainable
Responsibility, 2017). Investment Community, 2017).
• Intentional Endowments Network. Zevin is a We also organize and participate in events to educate
member of the Intentional Endowments Network, investors on topics related to investment stewardship
a “collaborative peer-learning network advancing and responsible investment. Past events include:
intentionally designed endowments—that enhance Making Change with Your Money—Responsible
financial performance and are aligned with insti- Investment 101; Creating Change with Your Invest-
tutional mission, values and sustainability goals” ments; “Investing” in Climate Justice Solutions; Investing
(Intentional Endowments Network, 2017). to Stop Mass Incarceration; Capital and the Prison
Problem: How We Stop Profiting from Punishment.

D I S C LO S U R E S
• Past performance is not a guarantee of future results. Investments • Certified B Corp status and designation on B Lab’s “Best for
in securities are always subject to the possibility of meaningful Customers” and “Changemakers” lists are, at least in part, based
losses. on responses provided to B Lab by the Adviser. The Adviser
pays annual membership dues to B Lab, which is a requirement
• Specific securities identified and described do not represent all
for eligibility in B Lab results. Certified B Corp status requires an
of the securities purchased, sold, or recommended for advisory assessment of companies’ positive impact on workers, community,
clients, and the reader should not assume that investments in customers, and environment (Criteria: https://bcorporation.net/
the securities identified and discussed were or will be profitable. certification/meet-the-requirements). The “Best for Customers”
• Registration with the SEC should not be construed as an designation is given each year to companies that score among
the top 10 percent of all Certified B Corps in the Customer impact
endorsement of Adviser’s investment skill or acumen.
area (Criteria: https://bthechange.com/how-a-company-can-be-
• Investment strategies, philosophies, allocation and holdings best-for-the-world-d4b22526afa3). The “Changemakers” designa-
are subject to change without prior notice. tion is given each year to companies that make tangible progress
on their commitment to improve measurable, positive impact
• While the Adviser believes the outside data sources cited to be (Criteria: https://bthechange.com/the-203-companies-taking-
credible, it has not independently verified the correctness of any impact-improvement-to-heart-23362e1463e6).
of their inputs or calculations and, therefore, does not warranty
the accuracy of any third-party sources or information. • Bloomberg Businessweek “Ones To Watch” award is determined
annually by the editors of Bloomberg Businessweek magazine.
• Inclusion in the Real Impact Tracker Certified Community is, (Criteria: https://www.bloomberg.com/news/features/2017-11-30/
at least in part, based on responses provided by the Adviser. watch-these-people-in-2018)
The Adviser paid Real Impact Tracker to perform an assessment,
which is a requirement for being included in the Certified Com-
munity. The assessment took account of the Adviser’s abilities
in shareholder engagement, its public advocacy, and its integra-
tion and promotion of environmental and social considerations in
the investment process. (Criteria: http://realimpacttracker.com/
certified-community)

I M PA C T R E P O R T 2 0 1 8 | Z E V I N A S S E T M A N A G E M E N T, L L C 15
 Zevin Asset Management, LLC
2 Oliver Street, Suite 806 | Boston, MA 02109 | Zevin.com
100% POST-
CONSUMER,
PROCESS For more information, please contact Pat Miguel Tomaino,
CHLORINE-
FREE PAPER Director of Socially Responsible Investing • pat@zevin.com or 617-742-6666

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