United States Securities and Exchange Commission
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
NAME OF REGISTRANT: Seventh Generation
Interfaith Inc.
NAME OF PERSONS RELYING ON EXEMPTION: Province
of Saint Joseph of the Capuchin Order
ADDRESS OF PERSON RELYING ON EXEMPTION: 930
West State Street, Milwaukee WI 53233
WRITTEN MATERIALS: The attached written
materials are submitted pursuant to Rule 14a-6(g)(1) (the “Rule”) promulgated under the Securities Exchange Act of 1934. Submission
is not required of this filer under the terms of the Rule, but is made voluntarily in the interest of public disclosure and consideration
of these important issues.
Subject: Exempt Solicitation on Shareholder
Proposal — Additional Report on Lobbying Activities (Item #5)
RECOMMENDATION:
The Province of Saint Joseph of the Capuchin Order is urging shareholders
to vote FOR the shareholder proposal requesting an additional report on lobbying activities (Item 5 in the proxy statement) at
the Boeing shareholder meeting on April 29, 2022.
RESOLVE:
The shareholders of Boeing request the preparation of a report, updated
annually, disclosing:
| · | Company policy and procedures governing lobbying, both direct and indirect,
and grassroots lobbying communications. |
| · | Payments by Boeing used for (a) direct or indirect lobbying or (b) grassroots
lobbying communications, in each case including the amount of the payment and the recipient. |
| · | Boeing’s membership in and payments to any tax-exempt organization
that writes and endorses model legislation. |
| · | Description of management’s and the Board’s decision-making process
and oversight for making payments described above. |
The proposal is part of an ongoing investor campaign
for greater corporate political spending and lobbying disclosure. Transparency and accountability in corporate spending to influence public
policy are in the best interests of Boeing shareholders. Without a clear system ensuring accountability, corporate assets can be used
to promote public policy objectives which can pose risks to Boeing’s reputation and shareholder value. In the wake of the January
6, 2021 riots, transparency and accountability of corporate lobbying activities and expenditures are increasingly important.
Transparency and accountability of corporate lobbying activities and
expenditures have become especially important given recent events. Investors are also asking companies to disclose contributions they
make to trade associations and other third-party groups that use these contributions to influence policy.
Need for Transparency in the Wake of the Capitol Insurrection
After January 6, 2021, Boeing announced it would pause its PAC contributions.
But the lingering question is whether these changes that companies like Boeing made in response to the Jan. 6 insurrection will be simply
temporary measures to repair reputational damage, or something more lasting.1
The concern for investors is that, although Boeing has a large lobbying
footprint, a complete picture of its spending to influence public policy, including payments to third-party groups and unreported grassroots
lobbying, is unavailable for shareholders. More broadly, the attack on the U.S. Capitol and the “Big Lie” challenging the
validity of the election results has revealed an entirely new level of reputational risk for corporate lobbying (and political) expenditures,
particularly to third-party groups.
We believe Boeing needs to commit to corporate
political responsibility by increasing its transparency through disclosing all of its third-party spending to influence public policy.
In this letter, we will show support for this proposal is warranted because:
| · | Reputation is an important component of shareholder value; |
| · | Boeing’s current disclosures are inadequate |
| · | Dark money spending through trade associations and social welfare groups
presents unknown risks; and |
| · | Boeing could easily provide details of its lobbying to investors. |
Corporate Reputation Is an Important Component of Shareholder Value
| · | Boeing’s failure to provide robust and complete disclosure of its lobbying
activities and expenditures exposes it to potential reputational damage. |
| · | A company’s reputation can meaningfully influence its financial performance,
and a damaged or lost reputation is difficult to repair: According to the Conference Board, companies with a high reputation rank perform
better financially than lower ranked companies, and executives find it is much harder to recover from a reputational failure than to build
and maintain reputation.2 |
| · | The 2018 Reputation Dividend Report estimates that “corporate reputation
is now directly responsible for an average of 38% of market capitalization across the FTSE 100 & 250.”3 The Ipsos
Global Reputation Centre research across 31 countries shows conclusive proof of the relationship between a good reputation and better
business efficiency.4 |
_____________________________
1 https://www.newyorker.com/business/currency/corporate-america-reckons-with-its-role-enabling-trump
2 “Reputation Risk,” The Conference Board,
2007, p. 6.
3 https://www.provokemedia.com/research/article/link-between-corporate-reputation-market-value-strengthens-study
4 https://www.ipsos.com/sites/default/files/ct/publication/documents/2018-05/unlocking_value_of_reputation-may_2018.pdf
| · | According to a Deloitte survey, 87 percent of executives rated reputation
risk as more important or much more important than other strategic risks their companies are facing, and 88 percent said their companies
are explicitly focusing on managing reputation risk.5 |
| · | Clearly, corporate reputation has significant impact on shareholder value. |
Disclosure Gaps - Boeing Investors Need
a Lobbying Report
| · | Information on Boeing’s federal, state and international lobbying
spending is difficult to obtain, limited and non-consolidated. Boeing fails to provide to a comprehensive lobbying report where stakeholders
can learn relevant amounts spent on direct or indirect lobbying activities/relationships, priorities, and how those efforts are supportive
of the company’s strategy and investor interests. Yet Boeing has a broad lobbying footprint. |
Federal Lobbying – Boeing Spends Millions Each Year
| · | Boeing spent $192,750,000 on federal lobbying from 2010-2021, and $26,080,000
in 2020 and 2021 alone. Boeing has drawn scrutiny for “lobbying Congress to buy aircraft that we don't
need.”6 Since 1998, Boeing has spent more than $314 million on federal lobbying, making it the 9th
largest spender during that time.7 Yet Boeing fails to disclose these amounts to shareholders as requested. |
| · | They have been described as “one of the US’s most powerful lobbyists8
and “one of the biggest players in the Washington influence game.”9 |
| · | Boeing has drawn scrutiny for “lobbying Congress to buy aircraft that
we don't need.”10 |
State Lobbying – Information on Boeing’s Spending Difficult
to Obtain
| · | Obtaining comprehensive state lobbying information is described by an expert
as “nearly impossible,” given “the ‘Byzantine’ manner in which the data is captured and made available online”
which effectively buries information across many states’ websites.11 |
_____________________________
5 “2014 Global Survey on Reputation Risk,” Deloitte,
p. 4.
6 https://thehill.com/business-a-lobbying/business-a-lobbying/566189-navy-admiral-criticizes-defense-contractors-over.
7 https://www.opensecrets.org/federal-lobbying/top-spenders?cycle=a.
8 “Boeing’s 737 Max Fleet ‘Will Remain
Grounded for Weeks,’” The Guardian, March 14, 2019, https://www.theguardian.com/world/2019/mar/14/ethiopian-airlines-boeing-737-max-black-boxes-arrive-paris,
accessed March 18, 2019.
9 “Boeing a Major Lobbying Player on Capitol Hill,”
CNN, March 13, 2019, https://www.cnn.com/2019/03/12/politics/boeing-capitol-hill-lobbying/index.html, accessed March 18, 2019.
10 https://thehill.com/business-a-lobbying/business-a-lobbying/566189-navy-admiral-criticizes-defense-contractors-over.
11 “Wal-Mart Improves Lobbying Disclosure after Shareholder
Push,” Reuters, May 13, 2015, https://www.reuters.com/article/us-wal-mart-stores-disclosure-lobbying-e/exclusive-wal-mart-improves-lobbying-disclosure-after-shareholder-push-idUSKBN0NY0AH20150513,
accessed March 18, 2019.
| · | Boeing fails to provide any details of its state lobbying expenditures as
requested by the proposal. Boeing only provides investors links to five state websites for California, Florida, Missouri, Texas and Washington.
This incomplete disclosure fails to provide the amounts, as requested. It also requires the user to look up Boeing’s reports. It
also fails to provide links to other state Boeing lobbies in, including Alabama, Arizona, Illinois, New Mexico, Oklahoma and South Carolina. |
| · | Boeing’s state-level lobbying spending is likely significant. According
to a 2017 study that looked at disclosures from the six states with the most robust reporting requirements, Boeing spent $1.3 million
between 2012 and 2015.12 |
| · | In California, Boeing spent $1.2 million from 2010 – 2021 on lobbying.13 |
| · | In the state of Washington, Boeing’s lobbying through its trade association
Aerospace Works for Washington14 to preserve $8.7 billion in tax breaks has drawn scrutiny. 15 |
International Lobbying
| · | Boeing also lobbies abroad, reportedly spending between €500,000 –
€599,000 on lobbying in Europe for 2020.16 |
| · | Boeing has attracted scrutiny for funding the EU Reporter, described as “EU
lobbying dressed up as journalism.” EU Reporter reportedly presents its coverage as straight news — with rarely an indication
that a company or government paid for, or was associated with, the articles. Further, when the publication’s articles touch on one
of its clients, that coverage is frequently positive.17 |
The Company We Keep: Boeing Does Not Provide Comprehensive Dark
Money Disclosure
| · | Shareholder proposals for lobbying disclosure capture dark money spending
where there are no limits on what a company can give, whether through trade associations (TAs) or social welfare group (SWGs). While corporate
donations to politicians and traditional PACs have strict limits, their payments to TAs and 501(c)(4) SWGs have no restrictions. This
means companies can give unlimited amounts to third party groups that spend millions on lobbying and often undisclosed grassroots activity. |
| · | Undisclosed company payments/dark money lobbying by trade associations and
social welfare groups may be “at least double what is being reported.”18 In 2017, TAs and SWGs spent $535 million
on disclosed lobbying and $675 million on unregulated efforts to influence public policy, including strategic consulting, broadcast advertising,
media relations, social media posts, polling and funding for astroturf campaigns. |
_____________________________
12 Heidi Welsh and Robin Young, “How Leading U.S.
Corporations Govern and Spend on State Lobbying,” Sustainable Investments Institute and The Investor Responsibility Research
Institute, February 2017, p. 30. The study examined the largest 100 S&P 500 companies, adjusted for sector distribution.
13 https://cal-access.sos.ca.gov/Lobbying/Employers/Detail.aspx?id=1146240&session=2021&view=activity.
14 https://aerospaceworksforwa.com/coalition/
15 “Boeing, Lobby Group Team up to Defend $8.7 Billion
in State Tax Breaks,” Reuters, January 10, 2017.
16 https://ec.europa.eu/transparencyregister/public/consultation/displaylobbyist.do?id=62505293737-81.
17 https://www.politico.eu/article/brussels-eu-media-peddling-undisclosed-influence/.
18 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.
Boeing Doesn’t Disclose All Social Welfare Group Spending
(AKA Dark Money), and It Should.
| · | Boeing’s disclosure notably leaves out SWGs (501(c)(4) organizations),
entities which can engage in lobbying. Proponents and other supporters of this resolution are asking Boeing to illustrate its commitment
to corporate political responsibility by disclosing ALL payments to third-party groups that use its dues money to influence policy (‘dark
money payments’). |
| · | The dark money scandal at FirstEnergy illustrates why investors need disclosure
of SWG spending to prevent reputational, regulatory and financial damage. FirstEnergy agreed to pay $230 million for funneling $60 million
through a dark money SWG group called Generation Now that was used for bribery in Ohio.19 In 2018, FirstEnergy had agreed to
disclose its trade association lobbying payments but failed to include its payments to SWGs, leaving a loophole FirstEnergy allegedly
used to make over $60 million in undisclosed dark money payments. |
| · | The dark money connections to the Capitol riot further highlight that social
welfare groups can impact and pose risks to shareholders. For example, The Rule of Law Defense Fund is a social welfare group that helped
organize the protest before the insurrection and is an arm of the Republican Attorneys General Association (RAGA).20 Boeing
reportedly has given RAGA $175,000 in contributions since 2014;21 concerningly, shareholders have no way to know if Boeing
also made direct contributions to the Rule of Law Defense Fund, because Boeing fails to provide disclosure of its contributions to social
welfare groups. |
Trade Association Blind Spot
| · | Boeing’s disclosures of its participation and memberships in Trade
Associations is limited, lacking detail with respect to amounts spent, alignment with corporate priorities, and process and engagement.
|
| · | Corporations make payments to trade associations that are used lobby indirectly
on their behalf without specific disclosure or accountability. Trade associations spend hundreds of millions to lobby. For example, the
US Chamber of Commerce has spent more than $1.7 billion since 1998.22 |
| · | Boeing shareholders face a trade association
blind spot, as Boeing fails to disclose a closed top limit for its trade association payments. Its 2021 trade association disclosure notes
Boeing belonged to 14 trade associations which received more than $50,000 in dues.23 All a reader can tell here is that these
organizations received over $50,000. There is no way for a reader to know whether these trade associations received $50,001, $500,000
or $5,000,000 in dues. Not knowing the specifics is a problem for shareholders. It is also unclear whether this disclosure captures any
payments in addition to dues made to trade associations, or the portions of these payments used for lobbying. |
_____________________________
19 https://apnews.com/article/business-government-and-politics-ohio-a4dd75020561d8b533fdabcb98a0a350.
20 https://documented.net/2021/01/republican-attorneys-general-dark-money-group-organized-protest-preceding-capitol-mob-attack/.
21 https://substack.documented.net/p/more-raga-donors-freeze-funding.
22 https://www.opensecrets.org/federal-lobbying/top-spenders?cycle=a.
23 https://www.boeing.com/resources/boeingdotcom/company/key_orgs/pdf/Trade_Association_Disclosure_2021.pdf.
| · | For example, Boeing belongs to the Aerospace
Industries Association of America, Business Roundtable, National Association of Manufacturers and US Chamber Commerce, which together
spent $112,360,000 on lobbying for 2021. Yet all a reader of its annual report can tell is that Boeing gave each of these groups more
than $50,000 and they used 20 to 40 percent of Boeing’s payments for lobbying. Did Boeing give the Chamber $100,000 with $25,000
used for lobbying or $1,000,000 with $250,000 for lobbying? Without disclosing the amounts, a reader cannot tell if Boeing is potentially
very large payments which are being used to influence public policy. |
| · | Boeing’s incomplete third-party disclosure
lags many of its peer group members which are providing disclosure of their trade association and social welfare group payments and the
amounts used for lobbying, including 3M, AT&T, Cisco, ExxonMobil, Honeywell, Intel, Lockheed Martin, Microsoft, Northrop Grumman,
Procter & Gamble and Raytheon.24 |
Trade Association Lobbying Misalignments Create Reputational Risk.
| · | We believe Boeing’s trade association memberships and payments used
for lobbying pose reputational risks and risks to long-term sustainable growth when the lobbying of its trade associations contradicts
Boeing’s public position, including on climate, shareholder rights and worker safety. |
| · | Boeing notes the issue of sustainability alignment with its environmental
goals and commitments could harm its reputation. In its 2021 10-K, Boeing notes “from time to time, in alignment with our sustainability
priorities, we establish and publicly announce goals and commitments to improve our environmental performance, such as our recent operational
goals in areas of GHG emissions, energy, water and waste. If we fail to achieve or improperly report on our progress toward achieving
our environmental goals and commitments, the resulting negative publicity could adversely affect our reputation and/or our access to capital.”25 |
| · | We are concerned that Boeing’s lack of disclosure presents reputational
risk when its lobbying contradicts company public positions or takes controversial positions. For example: |
| o | Boeing believes in addressing climate change,26 yet the Chamber of Commerce opposed the Paris climate accord.27 |
_____________________________
24 Intel, Procter & Gamble and Raytheon disclose their
trade association and social welfare group payments, as well as the portions used for lobbying. Cisco, Microsoft and Northrop Grumman
disclose their trade association payments, as well as the portions used for lobbying. AT&T and ExxonMobil disclose their trade association
and social welfare group payments used for lobbying. 3M, Honeywell and Lockheed Martin disclose their trade association payments used
for lobbying.
25 Boeing 2021 10-K, pgs. 18 – 19.
26 http://www.boeing.com/principles/environment/report/index.page
27 https://www.bloomberg.com/news/articles/2017-06-09/paris-pullout-pits-chamber-against-some-of-its-biggest-members
| o | Boeing signed a statement opposing state voter restrictions, yet the Chamber lobbied against the For the People Act.28 |
| o | While Boeing has previously drawn scrutiny for avoiding federal taxes,29 its trade associations lobbied against raising
corporate taxes to fund health care, education and safety net programs.30 |
| o | Boeing signed the BRT Statement on the Purpose of the Corporation31 to be responsible to all stakeholders, yet the BRT
lobbied to limit the right of shareholders to file resolutions.32 |
| o | While Boeing assisted COVID-19 recovery and relief efforts,33 the Chamber of Commerce has lobbied against the Administration’s
use of the Defense Production Act.34 |
| o | This track record of Boeing’s trade associations acting in contrast to the Company’s stated values and positions heighten
its reputational risk. Without more comprehensive disclosure, shareholders cannot determine whether Boeing is effectively able to prevent
Company funds from being used for lobbying efforts contrary to the Company's and shareholders’ objectives and long-term interests. |
Other Companies Are Reporting Significant Lobbying
and Public Policy Issues
| · | Companies have begun producing reports which
assess the alignment between company positions, including on climate change, and the positions and lobbying of their key trade associations.
Examples of companies producing reports include BP, Pfizer, GM, Bayer and Shell. |
| · | Boeing uses the Global Reporting Initiative (GRI)
for sustainability reporting. GRI Standard 415: Public Policy “addresses the topic of public policy. This includes an organization’s
participation in the development of public policy, through activities such as lobbying and making financial or in-kind contributions to
political parties, politicians, or causes.”35 |
| · | Under GRI Standard 415, a company “should
report: |
| o | (1) the significant issues that are the focus of its participation in public policy development and lobbying; |
| o | (2) the company’s stance on these issues, and any differences between its lobbying positions and
any stated policies, goals, or other public positions.” |
| · | We believe GRI-reporting companies like Boeing
should be evaluating and disclosing the significant issues it lobbies on and any differences between its lobbying positions and its stated
polices, goals and public positions. |
_____________________________
28 https://thehill.com/business-a-lobbying/business-a-lobbying/554430-watchdog-group-launches-campaign-to-pressure?rl=1.
29 https://itep.org/boeing-paid-tax-rate-of-8-4-in-previous-decade-but-trump-to-speak-about-why-it-needed-his-corporate-tax-cut/.
30 https://www.washingtonpost.com/us-policy/2021/08/31/business-lobbying-democrats-reconciliation/.
31 https://opportunity.businessroundtable.org/wp-content/uploads/2019/08/BRT-Statement-on-the-Purpose-of-a-Corporation-with-Signatures.pdf
32 https://www.cnn.com/2019/11/08/investing/shareholder-rights-proxy-proposals/index.html
33 https://www.boeing.com/covid19/index.page
34 https://www.nytimes.com/2020/03/22/us/politics/coronavirus-trump-defense-production-act.html
35 https://www.globalreporting.org/standards/media/1030/gri-415-public-policy-2016.pdf.
Boeing’s Trade Association Ties to Controversial Groups
| · | Boeing’s membership in certain trade associations also has significant
indirect impact. For example, the Chamber and National Association of Manufacturers (NAM) are both members of the American Legislative
Exchange Council (ALEC), serving on its Private Enterprise Advisory Council.36 |
| · | ALEC has attracted negative attention for its role in promoting bills that
undermine regulations to address issues like climate change, workplace safety and workers’ rights. More recently it has drawn attention
for “numerous ties to the Capitol insurrection and Big Lie” challenging the validity of the election results,37
as well as promoting voter suppression38 and critical race theory.39 |
| · | Even before the riots, ALEC drew negative scrutiny
for putting brand reputations at risk when a lawyer associated with it was involved in a phone call President Trump made to Georgia Secretary
of State Brad Raffensperger in an attempt to overturn election results.40 |
Boeing’s Opposition Statement is Inadequate
| · | Boeing claims this proposal is unnecessary. It points to a high ranking in
the Center for Political Accountability’s CPA-Zicklin report that measures political disclosure and accountability policies and
practices of companies in the S&P 500. However, this argument continues to be misleading since the Company’s CPA-Zicklin ranking
has nothing to do with lobbying spending disclosure.41 The Company conflates political and lobbying spending disclosures in
its Opposition Statement and implies that both issues are covered in the ranking. The fact that the Company touts being ranked as a trendsetter
on the CPA-Zicklin Index, a measurement of transparency in political contributions but not lobbying, suggests that Boeing could, in fact,
become a leader in lobbying disclosure as well. |
| · | The Company’s Statement Against the Shareholder Proposal states that
it “is deeply committed to political transparency” and “believes that a proposal seeking an additional report containing
much of the same data we already disclose would not add value to shareholders, yet would result in the expenditure of additional resources
by the Company.” |
| · | However, as we have demonstrated, Boeing is failing to provide investors
what the proposal is asking for. If Boeing believed in transparency, then it would provide shareholders disclosure of its lobbying as
asked here. Boeing’s existing practices fail to provide a unified disclosure report to shareholders capturing its federal and state
lobbying payments, including through trade associations and social welfare groups. |
_____________________________
36 https://www.alec.org/group/private-enterprise-advisory-council-2/
37 https://www.exposedbycmd.org/2021/01/27/alecs-numerous-ties-to-the-capitol-insurrection-and-big-lie/
38 https://www.exposedbycmd.org/2021/06/14/cmd-joins-300-groups-in-call-for-companies-to-quit-alec-over-voter-suppression-bills/.
39 https://www.triplepundit.com/story/2021/critical-race-theory-alec/725786.
40 https://www.triplepundit.com/story/2021/reputation-alec-trump-phone-call/709706
41 https://www.politicalaccountability.net/wp-content/uploads/2022/04/CPA-CPA-Zicklin-Index-statement-on-what-it-covers-does-not-cover-04-21-22-.pdf
| · | The claim a report would result in expenditures of additional resources is
misleading. Other companies are able to provide this information shareholders. ExxonMobil just put out a
lobbying report42 capturing federal, state and grassroots lobbying and including all of its payments to third parties used
for lobbying, showing this can be done.43 If Exxon can put out a report, so can companies like Boeing. |
| · | Boeing is required to report its federal and state lobbying, knows what its
pays trade associations and social welfare groups and has all of this information, so it could be readily provided to shareholders in
a single report at minimal expense. |
***
Conclusion
We encourage all interested investors to take a look at Boeing’s
existing disclosures and assess: do they currently provide you with a clear idea of how and where the company is lobbying, to what end
and with what efficacy, and how those activities are aligned with your interests? Could you cite a number that represents how much the
company has spent on influencing public policy, directly or indirectly, and with what partners, and on what issues? Beyond its activities
in the US, do you have a clear understanding of how the company attempts to impact policies in non-US jurisdictions?
If you don’t like the level of transparency and disclosure you
find, we encourage you to vote in support of this proposal.
Lobbying Transparency: What Gets Disclosed Gets Managed.
What we have argued are Boeing’s inadequate lobbying disclosure
practices highlight the critical need for the Company to improve its lobbying disclosures, and increase transparency around its lobbying
policies, procedures and spending details.
| · | If Boeing has nothing to hide, transparent disclosure would simply show that
its lobbying is being done for the company’s and shareholders’ best interests. |
| · | Knowing our company’s lobbying will be disclosed will ensure board
and management oversight to safeguard that lobbying is being done in shareholder and Boeing’s best interests, which can be protective
of our investment now and in the future. |
For all of the above reasons, we urge shareholders
to vote FOR Item 5, the shareholder proposal requesting a report on the Company’s lobbying expenditures.
Sincerely,
Robert Wotypka, OFM Cap.
Corporate Responsibility Agent
The Province of Saint Joseph of the Capuchin Order
_____________________________
42 https://corporate.exxonmobil.com/-/media/Global/Files/policy/lobbying/ExxonMobil_2020-Lobbying-Report.pdf.
43 https://rollcall.com/2022/03/10/exxon-mobils-lobbying-report-sets-benchmark-esg-advocates-say/.
NOTE: This is not a solicitation of authority to vote your proxy.
Please DO NOT send us your proxy card; The Province of Saint Joseph of the Capuchin Order is not able to vote your proxies, nor does this
communication contemplate such an event. The Province of Saint Joseph of the Capuchin Order urges shareholders to vote for Item 5 following
the instructions provided on management's proxy mailing.
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