A group of nuns and other Catholic activists who want gunmakers to actively monitor violence committed with their products have met stiff resistance from the industry. In a new Securities and Exchange Commission filing, they have a message for one of those corporations, the parent company of popular gun brand Smith & Wesson: refusal to acknowledge the danger of your wares amounts to a self-inflicted injury to your bottom line.
After the Parkland school shooting, the activists, including the Sisters of the Holy Names of Jesus and Mary and the Catholic Health Initiatives network of clinics, bought stock in the American Outdoor Brands Corporation (AOBC), which owns Smith & Wesson. They did the same with Sturm, Ruger, the other major publicly traded gun company. The activists then used their status as shareholders to ask fellow investors to join them in demanding that the gunmakers publicly report on public safety risks caused by their products.
Ruger’s shareholders were first to consider the nuns’ proposal at their company’s annual meeting in May. The initiative passed with 69 percent of the vote. It was an unprecedented victory for the activists: no gun company had ever been forced by its shareholders to consider the public safety implications of its products.
American Outdoor Brands is the next test for the activists’ campaign. They have submitted a nearly identical motion to be voted on at the company’s shareholder meeting on September 25.
The company officially acknowledged the proposal in an August 17th filing, in which the board of directors urged other shareholders to oppose the activists’ proposal. The board argued that producing such a report would not reduce gun violence, and was redundant because the company already cooperates with federal law enforcement and complies with regulatory requirements that acknowledge the risk associated with firearms.
The nuns and their allies have now pushed back, saying that they don’t believe a report alone would reduce shootings and injuries: instead, they are asking the company to engage in basic responsible corporate governance. As they note, AOBC has become dependent on so-called fear-based sales that spike in response to anticipation of potential new gun control laws that rarely actually materialize. But in the post-Parkland school shooting moment, enthusiastic gun control activists have managed to push through real reforms — 55 new state gun laws have passed since the killings.
The Catholic allies have also pressured financial firms to impose conditions on the gun companies they work with.
“As a result of their association with gun violence, gun manufacturers, including AOBC, have suffered significant business and financial impacts,” the activists wrote in the filing. The gun company itself acknowledged in its last earnings statement that growing activism could harm its profits.
In short, since that shooting the company has “suffered reputational damage that can be proactively addressed through new strategies designed to promote gun safety,” the activists wrote. In the absence of any such efforts, the coalition of investors maintain, the company could make itself a target for lawsuits and and restrictive policy.
This spring, as the activists sought backers for their demands to Ruger, they got a crucial boost when the influential shareholder advisory firms Institutional Shareholder Services and Glass Lewis publicly came out in supported of the resolution.
ISS and Glass Lewis both said they would release reports on the AOBC resolution closer to the September shareholder meeting.
Prominent institutional investors BlackRock, Vanguard, and Millennium Management, which all maintain stakes in AOBC, declined to comment on how they might vote. The chairman of BlackRock, Larry Fink, has been outspoken on the need for the financial sector to use its power to reduce gun violence. The investment management firm, the largest in the world, voted in favor of the Ruger proposal.
Representatives of the Sisters of the Holy Names of Jesus and Mary and Catholic Health Initiatives did not return phone calls and emails seeking comment. But a spokesperson for an interfaith corporate responsibility group that is working with the nuns said they are active behind the scenes. Sister Judy Byron, a member of order who is leading the campaign, is now reaching out to other investors to persuade them to stand in solidarity with her efforts.
