Whitepaper on 2013 proxy votes at JPMorgan Chase and Franklin Resources

Executive summary

For 2013, Investors Against Genocide is coordinating shareholder proposals for consideration by shareholders at JPMorgan Chase and Franklin Resources. The “genocide-free investing” shareholder proposals state:

Shareholders request that the Board institute transparent procedures to avoid holding or recommending investments in companies that, in management’s judgment, substantially contribute to genocide or crimes against humanity, the most egregious violations of human rights. Such procedures may include time-limited engagement with problem companies if management believes that their behavior can be changed. In the rare case that the company’s duties as an advisor require holding these investments, the procedures should provide for prominent disclosure to help shareholders avoid unintentionally holding such investments.

The full text of the proposals is included as appendices in the 2013 white paper.

In 2012, genocide-free investing was on the ballot at JPMorgan Chase and was supported by T. Rowe Price, CalPERS, CalSTRS, Connecticut State Pension, Florida State Board of Administration, NYCERS, New York State Common Retirement Fund, Ohio State Teachers Retirement System, AFSCME, and many other financial institutions.

We request a vote FOR the proposal because:

• The proposal is in line with the vast majority of Americans who want to avoid investments with ties to genocide. Eighty-eight percent of Americans surveyed want their investments to be genocide-free. Similarly, shareholders approved the genocide-free investing proposal at the ING Emerging Countries Fund by a wide margin with 59.8 % of votes in favor of the proposal and only 10.7% opposed. Also, a new study by the Forum for Sustainable and Responsible Investment found that Sudan, where genocide is ongoing, is the top ESG consideration for institutional investors.
• Current policies inadequately support genocide-free investing. The companies exercise investment discretion over their own assets and, through investment management contracts, over those of the funds they manage. Yet, for example, despite having adopted a variety of policies addressing social concerns, Franklin Resources recently owned 7% of PetroChina and JPMorgan owned 7%. PetroChina is widely recognized as substantially contributing to genocide in Sudan. These investments, while legal, work against the spirit of U.S. sanctions.
• The proposed genocide-free investing policy is needed to align the companies’ investments with shareholder values so that investors can be confident that they are not inadvertently tied to genocide and crimes against humanity.
• No sound reasons prevent having a genocide-free investing policy. The proposal is narrowly crafted and only targets investments in the few companies supporting extreme cases of human rights abuses. The proposal sets a very high bar for when management action would be required, focusing only on companies that “substantially contribute to genocide or crimes against humanity.”
• The proposal would not be overly difficult to implement, would allow flexibility for the companies’ range of businesses, and would not prevent them from assisting clients that choose to invest in companies that contribute to genocide. Other large financial institutions have implemented genocide-free investment policies thereby demonstrating that the proposal is feasible.
• The proposal is consistent with the stated values of the JPMorgan and Franklin Resources and with the statements of their respective CEOs.

These points are explained in detail in the 2013 white paper. Please contact us at 617-517-6310 or 2013Proxies@InvestorsAgainstGenocide.org to discuss.