Active Investor Impact Update

Third Quarter 2023


Beyond the Backlash: Why ESG is Here for the Long Term


2023 Board and Workplace Diversity Engagement Update


Boston Common celebrates 20 years


Promoting Human Rights in Technology


Engagement Highlights

Beyond the Backlash: Why ESG is Here for the Long Term

Ally McDonald, Chief Executive Officer

Over the past year, critics of ESG investing have issued dire legal warnings claiming ESG may be “inconsistent with financial interests.” A presidential candidate and a prominent media outlet identified, without evidence, diversity efforts as a factor in Silicon Valley Bank’s stunning failure. Skeptics, from opponents of DEI in the workplace to industry players with clear agendas, such as oil and gas companies, have argued ESG is undermining fiduciary duty. Meanwhile, advisors are left to make sense of the cacophony.

But we will not shy away from addressing these issues because the false narratives driving the ESG backlash ignore obvious components of reality. Climate risk is manifesting in real-time. Diverse management teams outperform their more homogenous counterparts. And the next generation of investors wants genuine options to invest sustainably.

To understand what is going on in the marketplace, just look at the facts:

  • The business debate over the merits of ESG has shifted.
  • The push for diverse managers is changing the game.
  • It is becoming harder to get away with greenwashing.

RightsCon – Promoting Human Rights in Technology

Lauren Compere, Managing Director/Head of Stewardship & Engagement

Technology has expanded far beyond its sector, reaching into core business functions and daily life. Meanwhile, there is increasing evidence of biased data sets that further perpetuate discriminatory practices in healthcare delivery, creditworthiness and surveillance, making a comprehensive approach to ethical AI advocacy supported by robust engagement increasingly vital.

This past June, over 8,100 participants—2,000+ in person—confronted the risks of new technology at The RightsCon conference in Costa Rica. From freedom of media, Indigenous rights, and ethical AI to tech companies supporting democracy, emerging technologies, and the AI supply chain, attendees from 174 countries gathered to debate human rights in the digital age.

As investors we must understand the risks and opportunities posed by new technology, which, when used without proper governance, ethics, or attention to UNGP-aligned human rights, can cause real harm. I represented this perspective in person at RightsCon, speaking on panels about responsible business conduct in conflict-affected regions and US shareholder resolutions filed with Big Tech. Along with many other stakeholders, I advocated for supporting strong global regulatory systems, demanding company accountability and transparency, and aligning investments and engagement activities with convictions.

Read on to learn more about RightsCons including:

  • Human rights and ethical considerations across the value chain
  • Enhanced due diligence in conflict affected areas
  • 2023 US AGM Season with Big Tech
Diversity concept
investor areas

2023 Board and Workplace Diversity Engagement Update

Amy Orr, Director of US Shareholder Engagement

Companies with diverse workforces are expected to access new customer bases, generate higher revenues, and win market share. As investors, we expect companies to address systemic racism by putting forward disaggregated workforce disclosure, regularly assessing gender and racial pay gaps, conducting racial equity audits, and driving DEI improvements across the company’s value chain.

During our engagement outreach, we took a deeper look into the DEI practices of portfolio companies. We asked companies around the world how boards are supporting diverse candidates in leadership positions, and we asked international holdings how they are improving their US operations’ approach to racial equity.

Read more about our findings.

Investor Impact

We Engaged 29 Companies

Here are the key statistics: 

We initiated a dialogue with 29 of the companies whose boards we voted against. Nearly 70% (20 of 29) responded.


Diverse Representation in Board Governance


DEI Linked Compensation


Racial Equity Audits


Diversity Targets and Metrics


Gender Pay Gap


Diversity Focused Recruitment Tactics

Paths to Progress

We have seen progress on workplace and board diversity among portfolio companies due to regulatory headwinds, demographic shifts, rising consumer awareness, and mounting investor expectations.

Racial Equity Audits

While very few companies have conducted a racial equity audit, many are considering independent racial equity audits to help assess the effectiveness of their diversity practices in the workplace.

Gender Pay Parity

Gender pay parity is becoming an expected practice, and many European standards require independent pay equity audits.

Regulatory Push for Diversity Disclosure

Regulators and standards-setters are asking for improved board and workplace diversity.

DEI Linked Compensation

As investor attention to diversity grows, more companies have developed accountability mechanisms to measure the results of their longstanding commitments to DEI.

Connectivity Between DEI practices and Consumer Demand

In the US, shifting demographic trends and an increasingly diverse consumer base makes it a business imperative to focus on diversit

2022 Proxy Season

We vote against boards that fail to meet our racial and gender diversity thresholds. Since 2019, we have reached out to the boards we voted against to share our rationale, suggest best practices, and open a conversation on board diversity and workplace diversity, equity, and inclusion to drive progress within portfolio companies. Recently we increased the threshold for US large cap companies to require at least two or more racial minorities on the board.
We shared our intentions with US large-cap holdings to vote against the board if it does not have at least two diverse directors in 2023.
We voted against the boards of 50 companies based on our gender or racial board diversity proxy voting guidelines.

Company Progress Updates on Board and Workplace Diversity


Regeneron has a global goal to increase representation of diverse individuals in leadership and foster inclusion by 2025. The company has launched an inclusive leadership program and has set inclusive leadership performance goals.


Shimano appointed one female director to its board in 2023. The company’s Nomination and Compensation Advisory Committee confirms that the experience, skills, and abilities of directors are fully utilized to enhance corporate value.

Morgan Stanley

Morgan Stanley has a stated target to achieve 40% gender and racial diversity on the board in its next recruitment cycle. Four female directors sit on its board (only 29% of the board). The company has conducted internal and external racial equity audits in the past two years.


The company improved disclosure around ESG-linked compensation in 2023 proxy statement, where it links 10% of incentive compensation to company-wide ESG goals. This incentive compensation is applied to C-Suite positions.

Emerson Electric

Emerson added a modifier of +/- 7.5% of executive compensation linked to ESG metrics including GHG emissions targets.

Q3 Engagement Highlights


Eversource is the first US utility to leave the American Gas Association, a trade association fighting climate policy and spreading climate misinformation. This is excellent progress following our engagement with Eversource on its climate lobbying practices.


Boston Common filed a shareholder proposal asking PNC to set a time bound, interim GHG emissions reduction target for its financed emissions. We withdrew the resolution after PNC committed to disclosing financed emissions for its highest emitting sector and to set a carbon intensity reduction target in 2024. PNC made this public commitment in its 2022 Corporate Responsibility Report, published in July 2023. We will continue to track PNC’s public disclosure of its implementation.


Boston Common engaged Unilever on its access to nutrition strategies, pressing Unilever on its methodology, rationale, and ambitiousness of the company’s internal nutrition target, as well as hurdles to helping customers access healthier foods and lower the salt, sugar, and fat content in their diets.

WBA Digital Inclusion Collective Impact Coalition Progress Report Launch

Boston Common co-leads the investor collaborative engagement driving global technology companies to adopt ethical AI and human rights policies. The new report summarizes the engagement efforts and progress over the last year and emphasizes the need for increased coordination across stakeholders including civil societies, research, think tanks, business consulting groups, and companies to drive further progress.

Read the progress report here.

NZAM Engagement Updates

Boston Common engaged our top 10 carbon emitters (portfolio emissions exposure) at the firm level and top emitters in our Emerging Markets portfolio to understand holdings’ progress on climate strategies, transition plans, supplier engagement, and energy mix. We re-engaged companies that had no climate targets and commitments in 2022, and we were pleased to see that several companies have taken steps to adopt climate targets and commitments. Companies with new climate commitments include CSL Limited, Enphase Energy, Naspers, Raia Drogasil, Sonic Healthcare, and Shenzen Mindray.

From the Commons

Geeta Aiyer was included on the Forbes 50 over 50 list. As President and Founder of Boston Common, Geeta is listed among a select group of entrepreneurs, investors, inventors, and artists that are changing the world.

Lauren Compere participated in a virtual roundtable launch of the WBA Digital Inclusion Collective Impact Coalition (CIC) for Progress Report featuring a multi-stakeholder discussion on driving corporate action towards responsible and ethical Artificial Intelligence (AI).

Boston Common celebrates 20 years of financial returns, sustainable impact

2023 marks our 20th full year as an ESG-integrated investor and leader in impactful corporate shareholder engagement. Our authentic approach has been integral to our mission to activate investor capital toward solutions for people and planet.

Two decades of innovative global engagement initiatives, sustained company dialogues, and thought leadership have left a lasting impact on corporate policies and practices. Featured on the right are select engagement leadership highlights from the past twenty years.

20 Year Engagement Highlights

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