Shareholders Advance LGBT Rights

June 9, 2018

I had the pleasure of speaking with Brianna Murphy and Cheryl Smith, both of Trillium Asset Management for this Impact Investing Success Story. Cheryl is a Managing Partner at Trillium and has 31 years in the Sustainable, Responsible, and Impact Investing. Brianna is a Vice President and Shareholder Advocate.

Sonya: Thank you both for taking the time to speak with me. Before getting into Impact Investing, what kind of work were you doing? And what led you to this type of investing?

Cheryl: After four years as an Assistant Professor Economics at the University of Denver, my entire career in financial services has been in Sustainable and Responsible Investing, or Impact Investing.

Brianna: I have been working at Trillium for 7 years – 9 total years in financial services. Prior to Trillium I worked in Trust Services at US Bank. My background in financial services and passion for environmental and social issues lead me to Trillium where ESG issues are a key part of the firm’s investment process.

Sonya: Trillium is known for its leadership in shareholder advocacy. Can you tell me a bit about how you engage companies you own in this process?

Cheryl: We believe being a shareholder carries the responsibility to be an active owner on environmental, social and governance issues. We engage companies on their ESG performance using all of the tools at our disposal: direct dialogue with senior company leadership, filing or co-filing shareholder proposals, working within multi-stakeholder institutions, convening company/stakeholder meetings, investors education, proxy advisory discussions, speaking publicly about issues of concern, and many other tools. In doing so we encourage companies to take positive and impactful environmental and social actions that are consistent with company and shareholder interests or in the interests of our core holdings. In addition to focusing on material issues, we also consider impacts on industries, markets and the broader economy. With over 30 years of experience in shareholder advocacy we have found shareholder advocacy can be an effective way to have a positive impact on company policies, practices and performance.

Sonya: Do you have a recent shareholder engagement success you can share?

Brianna: Trillium has a long history of engaging companies on lesbian, gay, bisexual, and transgender (LGBT) inclusion. Research from the Williams Institute has also shown that LGBT-supportive policies lead to positive business outcomes, lower staff turnover, and increased job satisfaction. Strong diversity and inclusion practices, in our view, are linked to long-term shareholder value creation. In the absence of comprehensive state and federal laws prohibiting workplace discrimination for LGBT individuals we look to companies to provide these protections. In 2016 Trillium filed a shareholder proposal at Arkansas-based transportation company J.B. Hunt asking the company to amend its equal employment opportunity (EEO) policy to protect all (LGBT) employees. Our proposal lead to conversations with senior management and the proposal was reviewed by the board. Despite our request to add just 5 words (sexual orientation and gender identity) to the EEO policy the company declined to make this change. In accordance with the shareholder proposal process I presented the proposal at the company’s June annual meeting in Lowell, Arkansas. Although J.B. Hunt management advised shareholders to vote against these changes, the proposal received a remarkable 54.7% vote. In response to the majority vote, the board immediately appointed an internal task force to study, compile, and identify the practical effects of amending its EEO policy to include sexual orientation and gender identity or expression. One month later the board met again and the J.B. Hunt directors approved the policy amendment, ultimately providing protections for its 19,000 employees across the country.

By making these changes, J.B. Hunt joined many other Arkansas businesses (including Wal-Mart, Tyson Foods & Dillard’s) who have implemented policies that protect their gay and lesbian, bisexual and transgender employees from discrimination in the workplace.

Federal law does not provide employment discrimination protection based on sexual orientation or gender identity. Nor do 27 states, including Arkansas, where J.B. Hunt is headquartered. As reported by the Human Rights Campaign, 91% of Fortune 500 companies have included sexual orientation n their workplace policies and 84% have also included gender identity.

Sonya: What a wonderful benefit to the JB Hunt employees and surrounding communities. Do you have a sense of whether these more inclusive employment policies have lead to positive financial outcomes for JB Hunt?

Brianna: By making these policy changes JB Hunt now provides inclusive employment discrimination protections for its 19,000 employees across the country. Research has shown that corporate policies that foster inclusive workplaces by supporting LGBT employees lead to more positive business outcomes, lower staff turnover, and increased job satisfaction and productivity. These policies can also better position a company to attract and retain the best talent.

Sonya: What projects are you working on right now?

Brianna: This year we have amplified our efforts on workforce diversity. Following the success of board gender diversity engagement, we are now asking companies to be more transparent about their workforces. We want to be sure companies are actively recruiting, hiring, and promoting women of color, white women, and men of color. Research has shown that diversity is just as critical at the manager and senior executive roles as it is on the board. In fact, McKinsey & Company found that companies in the top quartile for gender or racial ethnicity are more likely to financially outperform national industry medians. However, without detailed reporting we cannot be reasonably sure companies are integrating diversity into their companies in a meaningful way. The #MeToo events of 2017 further reinforced the need for more gender and racial diversity at all levels of companies. In a similar vein we’re also interested in the policies and programs that allow all employees to be successful such as mentoring and family leave policies. We currently have pending shareholder proposals on workforce diversity at Starbucks, PNC, KeyCorp, First Republic Bank, CVS, Travelers, Priceline Group, and Cigna.

Cheryl: I am exploring the income- and wealth-inequality ramifications of the 2017 tax plan.

Sonya: How can advisors and investors be involved in engagement, and more generally, impact investing?

Cheryl: Take the perspective of an owner! Every action that we take, and every investment that we make, has an impact. Be committed to understanding the impact that your choices make, and then choose to improve that impact – by choosing to invest with investment managers that actively engage with companies. Looking at your investments through an Environmental, Social, and Governance lens is a start, but real impact comes from engagement with companies and making sure that your concerns and issues are addressed by the companies that you invest in.

Brianna: I agree with what Cheryl said and would add that, for investors, if your employee plan is your main source of investing ask HR about having an SRI option available. Think about joining local Impact Investing groups in your area to see how you can combine efforts in affecting change.

For financial advisors, work with a firm that is an active owner with a history of success holding companies accountable and pushing for positive ESG changes is a great starting point. Look at which managers and mutual funds are on your ESG, Sustainable, Responsible, or Impact Investing platform and see what each is doing in terms of advocacy. Reach out to those investor partners and have a discussion on the advocacy work they do or don’t do. Discuss ways you can use this information to position SRI to them. Some advisors have success picking one or two topic areas that they are passionate about or know that they have clients passionate about these issues. Use the advocacy stories to introduce the topic of sustainable investing to your clients and prospects. It can be a valuable tool in terms of both prospecting and client retention.

*originally posted at


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