In this piece:

Active Shareowner Update

Second Quarter 2025

For more than two decades, Boston Common’s shareholder stewardship and direct company engagement efforts have generated meaningful improvements in corporate processes and policies worldwide. This work has also led to critical insights into how companies we invest in assess and mitigate material risks and invest in sustainability innovation to support long-term growth.

Responsible stewardship encourages sustainable growth, reduces risk by proactively addressing sustainability issues, and helps enhance company resilience and efficiency—essentials to driving long-term shareholder value. Each quarter, our Active Shareowner Update captures our work in progress in the field and celebrates the results of our sustained efforts.

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Released: Ninth Annual Impact Report

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The 2025 Ranking Digital Rights Benchmark

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Gaining Traction in Asia and EM

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Workplace Diversity Dialogue

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Equitable Supply Chains

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US Engagement Highlights

Released:

Ninth Annual Impact Report

Boston Common’s stewardship and engagement work continued in 2024 against a backdrop of roiling political tensions, escalating economic uncertainty, and corporate rethinking of sustainability and workforce diversity efforts. Amidst this turbulence, we remained steadfast in using active ownership to empower corporations to manage for the long term by addressing the urgent risks of our time.

Algorithmic Transparency, Privacy, and Freedom of Expression

The 2025 Ranking Digital Rights Benchmark

By Lauren Compere, Managing Director; Head of Stewardship and Engagement

Ongoing AI developments and their potential for user harm require appropriate checks and balances. However, the significantly curtailed EU AI Act and a lack of AI regulation in the U.S.—exacerbated by a decade of lobbying efforts against state-level AI regulation—leaves the onus on consumers and investors to discern the opportunities and risks.

In June, Amazon announced that AI agents will become “teammates” to its human workforce. Indeed, AI and human collaboration in corporate settings is rapidly becoming the norm. However, human oversight is sorely lacking; AI is already policing itself and is used in cybersecurity processes and AI risk safety testing protocols.

Mindful of these circumstances, Boston Common is advocating for companies to adopt a Responsible AI approach that prioritizes “Safety by Design” and “Human-In-the-Loop” (HITL) in AI development and oversight.

Benchmarks like Ranking Digital Rights (RDR) have assessed global Big Tech for a decade, evaluating governance, privacy, and freedom of expression. This year’s Index examined 43 digital services, including AI assistants, messaging apps, and user-facing cloud and email services. It also included new metrics on algorithmic transparency. BCAM holdings assessed included Alibaba, Alphabet, Apple, Microsoft, and Tencent. These companies and the others included in the benchmark control the information flows and web infrastructure used by more than 5.5 billion people.

Most companies have improved since the last RDR Index (2022). Year-on-year progress leaders since 2018 included Microsoft and the Chinese companies Alibaba, Baidu, and Tencent, which all demonstrated marked improvement in governance transparency. In the U.S., however, transparency has regressed in some cases.

One company-level concern is the difficulty of assessing implementation effectiveness. For example, while almost all the assessed companies provided some detail on processes for complying with government orders to hand over private user data, half failed to publish the number and types of such demands received and complied with. In the case of enforcement, companies like Meta no longer use third parties to assess compliance regarding content moderation; instead, it has placed that responsibility with users, via a Community Notes approach.

Alibaba was the most improved company in the 2025 RDR index, thanks to advancing its transparency on governance and its acknowledgement of international human rights frameworks. Notably, Alibaba was among the best-performing companies in terms of algorithmic transparency. Microsoft ranked first in this year’s RDR assessment. However, many of the concerns outlined in the benchmark align with previous dialogues on Microsoft’s role in AI models, development, deployment, and use. We will use the RDR findings in collaborative and direct engagement with these companies in the second half of 2025.

BCAM presented its shareholder proposal at Alphabet’s annual meeting in early June. The proposal asked Alphabet to publish additional data and analysis that would allow investors to assess the child online safety risks of its YouTube platform. Shareholder support for the proposal (9% of shares) was lower than last year. However, support was relatively high among independent shareholders. Boston Common joined 29% of shareholders who supported a separate shareholder proposal asking Alphabet to offer equal shareholder voting rights. Also, 50.1% of outside shareholders voted against the re-election of Larry Paige, likely due to board independence concerns.

Gaining Traction in Asia and EM

This quarter, we engaged several developed and Asian emerging markets holdings through direct outreach or management meetings in Boston. The portfolio companies we connected with include Japanese holdings Ajinomoto, Kyowa Kirin, and Orix, Singapore’s OCBC and SingTel, Delta Electronics (Taiwan), and Shenzhen Inovance (China). Management meetings provide a forum to discuss our views on each company’s sustainability governance, performance, and disclosure, while sharing opportunities for further progress.

In April, we contacted Ajinomoto as part of a collaborative engagement initiative anchored in the 2024 Access to Nutrition Index (ATNi) findings. The company has made some progress on this topic, which we raised during our May 2024 meeting in Tokyo. Notably, Ajinomoto established formal oversight for nutrition strategy (CEO) and nutrition-related KPIs linked to executive remuneration, set a target to improve the nutritional value of its portfolio by 2030 using the Ajinomoto Group Nutrient Profiling System (ANPS), and has a 2030 target to deliver products promoting sodium reduction and protein intake optimization to 400 million people annually. In our management meeting, we were able to discuss next steps, including disclosing the percentage of revenues from “healthier” products as defined by the external “Health Start Rating” (HSR). Only 15% of Ajinomoto’s global sales value—and 22% of its products—meet the HSR ‘healthier’ threshold.

Delta has advanced sustainability governance and disclosure practices. It established an ESG Committee in 2007 and hired a Chief Sustainability Officer (CSO) in 2019. In 2023, it joined the Taskforce on Nature-related Financial Disclosures (TNFD) Forum and conducted its first biodiversity assessment. In our meeting, we commended the company for its advanced practices and sought understanding of how its biodiversity assessment was integrated into policy and process changes since 2024.

Since 2021, Inovance has made significant progress on its approach to sustainability governance and ESG disclosure. The company issued its first sustainability report in 2021 and established a sustainability office in 2022. Given Inovance’s plans to vastly ramp up its integration of advanced AI across the business, we encouraged evolving its disclosure on AI governance and oversight, prioritizing this issue in its next sustainability report, and providing more visibility to investors in the interim.

We have long engaged OCBC on its approach to climate risk and transition, deforestation, and biodiversity. We met with Ms. Helen Wong, OCBC’s CEO, during the second quarter. We commended her company for its essential role in facilitating Sustainable & Inclusive Finance, thanks to its service of small and medium-sized businesses and its approach to sustainable finance as a corporate growth strategy.

In early Q2, we engaged the company regarding data privacy and security, Responsible AI, and data center energy efficiency. The company shared progress in these areas, including establishing a Group Responsible AI Framework and Policy. We met with SingTel’s management in June, including Group CEO, Mr. Yuen Kuan Moon. We learned more about the company’s ongoing sourcing of green energy to fuel its growing data center business and its development of governance related to its role as a user, seller, and enabler of AI. We recommended that Singtel evolve its public disclosure, including its Responsible AI Framework, given its active AI policy development and use of Generative AI.

Outside of Asia, we received robust responses from Axis Bank (India) and Bancolombia (now Grupo Cibest, S.A.). From late 2024 to early 2025, we engaged Bancolombia regarding human capital management, executive remuneration, climate target-setting, and due diligence for biodiversity and deforestation risks. The company has established a target to achieve gender parity in senior management, enhanced transparency related to the incorporation of sustainability indicators in executive compensation, completed the Science Based Targets initiative (SBTi) validation process for its decarbonization goals, and adopted sectoral standards related to biodiversity and deforestation. We have long engaged Bancolombia regarding the company’s management of climate risk and transition. Previously, the bank participated in a panel that Boston Common organized with the Emerging Markets Investor Alliance (EMIA), which highlighted the bank’s involvement with the Partnership for Carbon Accounting Financials (PCAF).

Workplace Diversity Dialogue

By: Amy Orr, Director of US Shareholder Engagement

Voting results released to date overwhelmingly suggest that shareholders and companies understand the necessity of creating diverse, inclusive workplaces to attract talent and serve the preferences of diverse consumer bases. Boston Common shared our view that diversity and inclusion remains an important focus for many companies we own. We also voted against several shareholder proposals that opposed robust and business-relevant diversity and inclusion efforts. We reached out to the boards of Visa, John Deere, Merck, Gilead, and Amex after their annual general meetings to share our voting rationale. In all outreach, we encouraged company boards to consider diversity and inclusion in corporate and human capital strategies. We believe a strategic focus on diversity is essential for companies to thrive in an increasingly diverse, knowledge-based economy. Many companies expressed openness to continued dialogue.

Equitable Supply Chains

During the second quarter, companies grappled with global tariff uncertainty and escalating geopolitical tensions, introducing complexities and disrupting stability in global supply chains. Against this backdrop, we are asking companies to ensure their supply chains treat workers and impacted communities fairly.

We participated in a collaborative dialogue with Unilever, following news that it was among the food companies with indirect links to egregious gender-based violence and harassment in sugar supply chains in India. We also asked Inditex to better articulate its responsible purchasing practices, enhance supply chain disclosure, and clarify its commitment to living wages across the apparel supply chain. Finally, we signed a collaborative letter to Costco to address allegations of its ties to forced labor in the seafood supply chain. In all cases, we asked companies to ensure that worker perspectives are integrated into supply chain due diligence, as worker voices are critical to healthy supply chains. Worker perspectives help companies avoid preventable human rights violations and strengthen suppliers’ ability to withstand future headwinds.

investor areas

US Engagement Highlights

John Deere

Human Capital Management

In April, we shared our rationale for voting against a shareholder proposal at its February AGM, widely viewed as antagonistic to DEI efforts. The proposal, brought forth by the conservative advocacy group, the National Legal and Policy Center, requested reporting related to concerns about supposed discriminatory hiring practices against White people and men.

During our dialogue, we learned that Deere, which employs 30,000 U.S. workers and assembles 75% of its products domestically, prioritizes a robust human capital management approach to meet the needs of its diversifying workforce. Deere’s Chief People Officer is charged with creating an inclusive culture and integrating recruitment tactics designed to attract applicants who meet the company’s evolving skills needs, which increasingly require software and mechanical engineers. The company reported workplace diversity metrics in its 2024 Sustainability Data Book and has grown the percentage of Black and Hispanic workers in its workforce since 2022.

BCAM Focus: Continue promoting an inclusive workforce. Strong employee feedback loops and employee resource groups, among other mechanisms, enable the company to source talent from a broad applicant base and meet the diverse needs of its customers.

Top Build

Workplace Health and Safety

BCAM has engaged Energy-efficient installer and building materials distributor TopBuild since 2020 on the issue of workplace health and safety. We have encouraged the company to enhance disclosure of metrics such as total recordable incident rates (TRIR) and lost time case rates (LTCR). In its latest sustainability report, TopBuild enhanced its workplace health and safety disclosure and significantly reduced its total recordable incident rates.

BCAM Focus: Prioritize workplace health and safety, especially considering recent immigration reform, which may result in labor shortages in the U.S. Request disclosure of incident rates for the direct and contracted workforce.

Rockwell

Climate Targets

With several strong sustainability practices in place, Rockwell Automation joined the Science-Based Targets initiative in 2023. We inquired about underreported areas of Scope 3 emissions and refrigerants, which we see as critical to Rockwell’s overall emissions commitments. Through dialogue, we learned that Rockwell is developing a roadmap to address Scope 3 and refrigerants. Notably, the company aims to publish its sustainable refrigerants roadmap by December 2025 and is considering more sustainable alternatives such as hybrid chiller HVAC systems.

BCAM Focus: Publishing and implementing climate targets, including Scope 3 emissions and refrigerants, to meet the standards set by the Science-Based Targets initiative.

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Published On: July 7, 2025

This piece is intended as an editorial review of a survey of risk considerations and does not constitute investment advice, a solicitation, or an offer to buy or sell any security. Past performance does not guarantee future results. All investments involve risk, including the risk of loss of principal.

Company developments described in this report occurred during the period of our engagement but should not be assumed to have resulted from Boston Common’s activities. Where we believe our engagement contributed to a development, we describe the basis for that assessment.

References to third-party research, publications, and data sources are provided for informational purposes only. Boston Common Asset Management does not warrant the accuracy or completeness of third-party information cited herein. Readers should consult original sources and qualified professional advisors before making any investment decision.