By Sarah Shearman
LONDON, May 23 (Thomson Reuters Foundation) - A U.S. startup has launched a tool to help investors move their money out of companies headquartered in states with "extreme anti-abortion laws", seeking to tap into a growing movement towards shareholder activism.
Openinvest said it wanted to drive change and encourage states to reverse their decisions with the tool, launched after new restrictions on abortion passed by Republican-dominated legislatures in eight U.S. states.
The tool screens out large companies headquartered in states including Alabama, Georgia, Arkansas and Ohio, and promotes those in states it says support reproductive rights.
"Our vision is to use technology to help investors - if they have $200 or $200 million - to align their assets with things they care about," said Claire Veuthey, a director at OpenInvest.
"We hope to fundamentally make a positive impact, drive change and encourage those states with extreme anti-abortion laws to reverse their decisions and take a stand for all human rights," she told the Thomson Reuters Foundation by phone.
OpenInvest allows its clients - which include financial advisors, institutional investors, charities and consumers - to invest in large listed companies in the United States.
It uses data to decide whether a company is "good" or "bad" on a range of issues, such as greenhouse gas emissions and LGBT+ rights.
The ethical investment movement has for decades focused on moving capital away from certain business, such as those dealing in fossil fuels.
But there is a growing movement towards broader shareholder activism, encouraging companies to change from within, by for example raising their concerns publicly at companies' annual general meetings or meeting board members to seek change.
Activists are calling for boycotts of products produced in Alabama after it passed an outright ban, including for pregnancies resulting from rape or incest, unless the woman's life is in danger.
Other states, including Ohio and Georgia, have banned abortions absent a medical emergency after six weeks of pregnancy or after the foetus's heartbeat can be detected, which can occur before a woman even realizes she is pregnant.
Many of the restrictions are intended to draw legal challenges, which religious conservatives hope will lead the nation's top court to overturn the 1973 Roe v. Wade decision that established a woman's right to terminate her pregnancy.
Economic boycotts in recent years have pressured states to roll back legislation.
North Carolina repealed a 2017 law barring transgender people from using the bathroom of their choice after the National Collegiate Athletic Association said the state could not host championship games unless it scrapped the legislation.
Vaidehee Sachdev of ShareAction, a London-based charity that promotes responsible investment, welcomed the tool as "a new and exciting proposal" that could "send a strong signal to companies with outdated policies".
"But to really effect change, institutional investors – who are unlikely to divest solely on the ground of reproductive rights policies – need to raise this issue with target companies during engagements," said Sachdev, a senior research manager.
Veuthey said the startup launched its reproductive rights tool in response to demand from customers.
Of the about 500 companies listed on OpenInvest, 53 are excluded on the grounds of reproductive rights, and 81 are favoured.
Pharmaceutical companies including Pfizer and Johnson & Johnson are favoured by the algorithm because they make contraceptives, as are technology firms IBM and Microsoft because of their U.S. paid parental leave policies.
(Reporting by Sarah Shearman @Shearmans. Editing by Claire Cozens. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking and slavery, property rights, social innovation, resilience and climate change. Visit http://news.trust.org to see more stories)
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