July 10, 2018
Senate Committee on Finance
Attn. Editorial and Document Section
Dirksen Senate Office Bldg.
Washington, DC 20510–6200
RE: STATEMENT FOR THE RECORD — Hearing of the Subcommittee on Social Security, Pensions, and Family Policy (“Examining the Importance of Paid Family Leave for American Working Families,” 7/11/2018)
Chairman Hatch, Ranking Member Wyden, and members of the Subcommittee on Social Security, Pensions, and Family Policy:
I write today on behalf of Zevin Asset Management, a firm that invests globally, integrating environmental, social, and governance (ESG) issues into our financial analysis. Zevin Asset Management wishes to encourage the efforts of this subcommittee on paid family leave and to underscore the importance of improving paid family leave policy — not only for workers, but for the companies and investors which rely on their long-term health and human capital.
As a testament to the investment community’s keen interest in improving paid family leave policy, I refer the subcommittee to the following investor statement on paid family leave published last month and endorsed by 58 investment companies and asset owners with assets totaling $169 billion. Please review the statement in its entirety. Very clearly, investors are seeking greater equality, adequacy and accessibility in companies’ paid family leave policies.
As discussed in the investor statement, suitable paid family leave positions workers and companies to seize long-term opportunities and guard against human capital risk. However, more support from government is needed. Federal policy certainty and targeted resources would promote the long-term interests of U.S. employers. As an investment company focused on sustainable and socially responsible performance, therefore, Zevin Asset Management urges Congress to act to improve paid family leave.
Pat Miguel Tomaino
Director of Socially Responsible Investing
Zevin Asset Management, LLC
INVESTOR STATEMENT ON PAID FAMILY LEAVE
Published June 1, 2018
Available online at http://www.zevin.com/documents/familyleave.pdf
We write today as representatives of investors with assets totaling $169 billion and a keen interest in investment risks and opportunities related to human capital management. Paid Family Leave is a critical issue impacting U.S. families, as well as our portfolio companies’ long-term performance. Federal inaction on paid family leave has increased pressure on large employers to enhance their policies for all employees. Investors are concerned about the long-term performance and risk management of companies that maintain unequal and inadequate paid family leave policies.
Companies that fail to review, disclose, and improve their approach to paid family leave could be left behind. In the last few months alone, Starbucks, Walmart, CVS Health, and other large employers have announced extended paid parental leave policies. Companies are finally taking action in response to public advocacy by employees, as well as pressure from investors, including shareholder proposals urging companies to address critical caregiving needs.
It is well known that the current state of paid family leave is not working for U.S. families in general and has negative impacts on certain segments of the population in particular. Approximately 9 out of 10 private sector workers in the U.S. do not have access to a single day of paid family leave, and one in four new moms is back at work just ten days after childbirth. The lack of proper paid family leave, as further defined below, can disproportionately impact women, forcing them to leave their career track in order to care for children, and contributing to systemic and long-term gender pay gap issues.
The status quo is also bad for business — subjecting companies to avoidable long-term risks and costs, such as workforce retention issues and higher turnover, loss of high-quality talent, and diminishing diversity levels. For example, it is costly for companies to replace workers (and train their replacements) when poor paid family leave policies cause them to leave the workforce. On the other hand, according to the Center for Economic and Policy Research, companies offering paid family leave to all workers report increased morale, as well as cost savings, from less employee turnover. In a recent New York Times report, a Starbucks official stated that improved paid family leave “brings the talent we’re looking for, and industry-leading retention.”
Unequal paid family leave can also lead to litigation risk. For example, last year, the Equal Employment Opportunity Commission sued Estée Lauder, citing disparities between paid leave for mothers and fathers.
Recent progress at the companies mentioned above signals a wave of action among U.S. corporations and a potential watershed moment for paid parental leave in the U.S. As the labor market tightens, more and more companies are positioning themselves to attract and keep talent with incentives such as paid family leave and other family-friendly policies. Policies that leave out hourly or part-time workers, that ignore fathers and adoptive parents, or that do not provide adequate length of leave for families to recover or bond with newly arrived children will no longer suffice. We believe that the “Paid Leave Arms Race” that has played out in the professional services, financial, and knowledge economy sectors is now moving into the service and retail sectors. As such, we are urging companies across our portfolios to revisit their approach.
Companies should strive for best practice to realize all of the benefits of paid family leave. Policies in this area should:
- Be equal…
…between classes of employees, salaried and hourly, full-time and part-time, corporate office and field.
…between new parents regardless of gender or family circumstance. Providing an additional 6 to 8 weeks of short-term disability for birth mothers is acceptable.
- Be adequate…
…in length for the health of newly arrived children and birthing mothers, and provide the necessary bonding time for new parents. Although Walmart excluded their part-time workforce, the length of Walmart’s new policy sets the baseline standard for companies: 16 weeks of fully paid parental leave to employees who give birth, and 6 weeks fully paid to all other new parents.
- Be accessible…
…to all employees. Policies should be easy to find and understand, and managers should encourage employees of all genders to fully utilize their paid family leave.
…to the public and investors. Increasingly, investors and jobseekers desire transparency in companies’ human capital management policies in a range of areas, from diversity and inclusion to compensation and benefits. We believe that these factors are material for large employers. Sound management of these factors can increase future opportunities (just as mismanagement can increase future costs).
We are keen to pursue dialogues with companies on how sound human capital management, including strong paid family leave policies, can support long-term investor value. As investors, we urge large employers to review and expand policies consistent with the above standards.
Zevin Asset Management
Walden Asset Management
Clean Yield Asset Management
The Sustainability Group of Loring, Wolcott & Coolidge
Tri-State Coalition for Responsible Investment
NorthStar Asset Management, Inc.
Impax Asset Management LLC
Trillium Asset Management
Sisters of the Presentation of Aberdeen, S.D.
Progressive Asset Management
Franciscan Sisters of Perpetual Adoration
Sisters of Saint Joseph of Chestnut Hill, Philadelphia, P.A.
Everence and the Praxis Mutual Funds
International Brotherhood of Teamsters
Sisters of Charity of Nazareth
Seventh Generation Interfaith Inc.
Dominican Sisters ~ Grand Rapids
Region VI Coalition for Responsible Investment
Sisters of St. Agnes Justice, Peace and Integrity of Creation Office
Community Capital Management, Inc.
Northwest Coalition for Responsible Investment
Midwest Coalition for Responsible Investment
Sisters of Charity, Halifax
Tri-State Coalition for Responsible Investment
Socially Responsible investment Coalition
Mercy Investment Services
Congregation of St. Joseph
Daughters of Charity, Province of St. Louise
SharePower Responsible Investing, Inc.
Vert Asset Management
Epic Capital Wealth Management
Three Corners Capital
Newground Social Investment
CtW Investment Group
Nathan Cummings Foundation
Sisters of St. Dominic of Caldwell, NJ
Dominican Sisters of Hope
Ursuline Sisters of Tildonk, U.S. Province
Friends Fiduciary Corporation
Bon Secours Health System, Inc.
Socially Responsible Investment Coalition
Congregation of Sisters of St. Agnes
Nia Impact Capital
Nia Community Foundation
 “Walmart and Now Starbucks: Why More Big Companies Are Offering Paid Family Leave.” The New York Times, 24 Jan. 2018. https://www.nytimes.com/2018/01/24/upshot/parental-leave-company-policy-salaried-hourly-gap.html
 “Starbucks investors press coffee chain for change on unequal family leave.” The Guardian, 2 Oct 2017. https://www.theguardian.com/business/2017/oct/02/starbucks-investors-coffee-family-parental-birth-leave
 “13 Percent of Private Industry Workers Had Access to Paid Family Leave in March 2016: The Economics Daily.” U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, 4 Nov. 2016. Web. 9 May 2017.
 “Leaves That Pay: Employer and Worker Experiences With Paid Family Leave in California,” Center for Economic and Policy Research, January 2011, http://cepr.net/publications/reports/leaves-that-pay.
 “Walmart and Now Starbucks: Why More Big Companies Are Offering Paid Family Leave,” The New York Times, 24 Jan. 2018, https://www.nytimes.com/2018/01/24/upshot/parental-leave-company-policy-salaried-hourly-gap.html.
 “Deloitte Enters the Paid Family Leave Arms Race With 16 Weeks of Family Leave, Fortune, Sep. 8 2016, http://fortune.com/2016/09/08/deloitte-family-leave/