Gun Companies Are Not Exempt From Obligation To Respect Human Rights Policy, Investors Say
For annual meeting on September 24th shareholders seek support for proposal #4 recommending American Outdoor Brands ($AOBC) adopt a human rights policy to mitigate against potential human rights violations.
Q2 hedge fund letters, conference, scoops etc
NEW YORK, NY, WEDNESDAY, SEPTEMBER 11, 2019 – Members of the Interfaith Center on Corporate Responsibility announced today that they are calling on fellow shareholders in gun maker American Outdoor Brands (AOBC) to support a proposal requesting the company develop a human rights policy. The proposal, which was filed by several faith-based investors, is scheduled to go to a vote at the company’s annual general meeting, which will be held by telecast at 12:00 noon ET on September 24th.
The Proposal is grounded in the United Nations Guiding Principles on Business and Human Rights (“UNGPs”), a set of principles for states and companies to prevent, address and remedy human rights abuses in business operations. The UNGPs state that companies should adopt human rights policies and put in place systems for identifying, assessing, preventing and mitigating actual and potential human rights impacts. Despite the lethality of its products and their potential for misuse, AOBC has not adopted a human rights policy or a process for assessing human rights impacts.
“This is not an extraordinary request,” said Sr. Judy Byron, who filed the proposal on behalf of the Sisters of the Holy Names of Jesus and Mary. “Hundreds of companies across a spectrum of sectors including Walmart, Phillip Morris International, Microsoft, Hershey and Coca-Cola have adopted human rights policies and due diligence processes in order to minimize harm, manage risks and protect their social license to operate. Gun companies aren’t exempt. In fact, the severity of human rights risks that they are exposed to only increases their obligation to have these policies in place.”
In its exceptionally strongly worded and misleading opposition statement, AOBC erroneously contends that the adoption of a human rights policy would compel the company to assume “unlimited financial and legal liability” for “the negative impact of guns on society” and further, would require AOBC to take actions or positions in opposition to the Second Amendment to the U.S. Constitution. In its proxy exempt solicitation filed with the SEC on 9/9/19, proponents say these arguments are without any basis or merit.
“The statement makes numerous assertions regarding the scope and nature of the proposal that are flatly inconsistent with the proposal’s language and should be of concern to shareholders,” said Beth Young, ICCR’s Shareholder Initiatives Counsel. “Equating a human rights policy and impact assessment with unlimited liability, and claiming that the proposal would cause AOBC to be held liable for other companies’ products, is just one example of how AOBC’s statement in opposition falsely characterizes the core of the proposal and is thus misleading to shareholders.”
The human rights proposal follows a request last year, post-Parkland shooting, for a report on AOBC’s efforts to promote gun safety, which garnered a majority vote from shareholders. While AOBC did produce a ”Shareholder Requested Report” its conclusions suggested that there were no changes or further investigations that AOBC could carry out to reduce the risk that its products would be associated with events of gun violence. Against the backdrop of ongoing high profile mass shootings and mounting victims of gun violence, the company’s “business as usual” position was unacceptable to shareholders.
“Our attempts to engage productively with AOBC around ways it might be able to reduce the risk that its products pose to society have thus far been rejected,” said Colleen Scanlon of Catholic Health Initiatives, now CommonSpirit Health. “AOBC’s insular strategy is out of step with the growing list of companies that are intentionally reaching out to their stakeholders and taking positive action on gun safety.”
Currently, AOBC stock is selling at $6.74, a five-year low for the company and a dramatic drop versus last year’s stock price of $14.89.
“The risks to AOBC’s business are growing by the day and the company must put safeguards in place that clearly demonstrate its commitment to respect human rights,” said Byron. “We appeal to AOBC shareholders to support this common-sense resolution in the interest of AOBC’s long-term sustainability as well as the public’s safety.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 49th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. www.iccr.org
