Visa shareholders have a message for management: They don’t want blood on their hands.
Shareholder proposals have pushed companies to adopt reforms around board gender diversity, executive compensation, and such environmental and social causes as climate change and human rights. Now if one group of shareholder activists has its way, electronic payments company Visa will face pressure at its January annual meeting to adopt policies aimed at an emerging issue for more and more companies—curbing gun violence.
The companies that make and sell guns have primarily been the targets of public outcry in the wake of mass shootings. But SumOfUs, an online consumer watchdog that describes itself as representing more than 15 million workers, investors and consumers around the globe who are dedicated to holding multinational corporations accountable for their actions, has released a shareholder resolution that aims to extend the responsibility for restraining gun violence to financial firms.
The organization, funded mainly by small donations from individuals, proposed last week that Visa’s board of directors issue a report on risks to the company around the function it performs in “enabling purchases of firearms, ammunition, and accessories used to commit crimes.” The activist organization also wants to know what Visa is doing to manage those risks. SumOfUs expects its initiative to come to a proxy vote.
“Given that Visa already has technologies to flag money laundering, fraud and terrorism,” says Katie Reilly, a corporate campaigner at SumOfUs, “they have an opportunity to be saving lives and preventing mass shootings by simply reporting that behavior in the same way they would be reporting other suspicious behaviors.”
Several of the mass shooters bankrolled their guns and ammunition with credit cards. Omar Mateen, who killed 49 people in 2016 at the Pulse nightclub in Orlando, opened six credit cards in the months leading up to the shooting, according to the New York Times. Three of those cards were from Visa. In the days before the massacre, he spent over $26,000 on guns, ammunition and a ring for his wife. His typical spending before: $1,500 a month on one card.
As the country reckoned with the Parkland, Fla. Mass shooting last year at Marjory Stoneman Douglas High School, some financial companies initiated measures to prevent gun violence. Citigroup adopted a commercial firearms policy that required new retail clients to restrict sales to individuals under the age of 21 or those who hadn’t passed a background check. The policy also barred clients from selling bump stocks and high-capacity magazines. Soon after, Bank of America stopped lending to companies manufacturing military-fashion firearms for civilian use.
PayPal, Square, and Apple Pay prohibit the sale of guns on their payment systems. So far though, Visa, the largest payment processor, has no intention of adopting similar policies. “If we start to get in the mode of being legislators, it’s a very slippery slope,” Visa CEO Al Kelly told CNBC last week. We shouldn’t be determining what’s right or wrong in terms of people’s purchases. We shouldn’t be telling people that they can’t purchase a 32-oz soda. We shouldn’t tell people they can’t buy reproductive drugs. The reality is that we are in the business of facilitating commerce. Legislators are in the business of deciding what the laws of the land are.”
Mastercard CEO Ajay Banga echoed similar view earlier this year when he said his personal beliefs shouldn’t influence transactions over Mastercard’s network.
With Visa, SumOfUs is trying to change that with the resolution it filed. Most of these shareholder proposals have a slim chance of winning, considering that institutional investors like Vanguard and BlackRock generally vote with management. But bringing the issue to the fore often pressures companies to act anyway. “We’re agnostic about how the policy gets made as long as it gets made,” says Lisa Lindsley, Capital Markets Advisor for SumOfUs. In 2018, for instance, although the shareholders rejected the group’s proposal phasing out plastic straws, McDonald’s said it would test alternatives in the U.S. And adopt paper straws in Ireland and the U.K.
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