Shareholders are making progress in their efforts to persuade banks to stop making loans to finance private prisons, according to the Interfaith Council on Corporate Responsibility, a shareholder advocacy organization that works for social change.
The most recent success was JP Morgan Chase’s agreement to stop funding REITs that invest in private, for-profit prisons as a result of pressure from shareholders. The agreement was announced Tuesday, and the ICCR commended the bank for its action.
Shareholders had worked for more than a year with bank management to change the bank’s policy because of the danger of human rights violations that surround the operation of private prisons. Private prisons also are often used to detain immigrants under the Trump Administration’s immigration policies, said the ICCR, which has a total of 300 organizations with $400 billion in investments.
JP Morgan Chase said in a statement, "JP Morgan Chase has a robust and well established process to evaluate the sectors that we serve. As part of this process, we will no longer bank the private prison industry."
In a letter to Jamie Dimon, chairman and CEO of JP Morgan Chase, sent early in the negotiations, the shareholders said, “These private prisons are rife with alleged human rights abuses, including inmate deaths, poor medical care, allegations of physical and sexual abuse of detainees, and violence. Some of these risks are heightened due to the nature of the business model and practices of the private prison companies, including crowded conditions, less programming for inmates and detainees than public facilities, low staff salaries, poor staff retention, lack of training on human rights and inadequate staffing. Already this year, there have been seven documented deaths of immigrant detainees in these facilities.”
“Providing capital to private prisons enables them to grow and thrive. We recognize that as a main financer of the industry, JPMC was benefiting financially from harm caused to detainees and immigrant communities,” said Mary Beth Gallagher of the Tri-State Coalition for Responsible Investment, one of the lead investors working with the bank.
“Our ongoing engagement has called for the bank to conduct enhanced human rights due diligence, to assess the human rights risks and use its leverage to influence the companies it is lending to. We look forward to more disclosure on the way JPMC is cutting ties with private prisons to make this important statement have an impact on the underlying companies,” she added.
Work by the investors’ group is continuing on other fronts as well.
ICCR is working with Wells Fargo asking the financial giant to re-evaluate its investments in private prisons, and Wells Fargo already has committed to refrain from marketing to or launching any new investments in the industry, ICCR said.
Another success was achieved after a shareholder resolution was filed by United Church Funds, an ICCR member, with SunTrust Banks requesting a board committee meeting on human rights issues citing SunTrust’s funding of companies contracted by the U.S. government to carry out immigration policies. The resolution was withdrawn when the company agreed to enhanced human rights assessments of its activities.