Ref: IMD-7-2336

Case study

Reference: IMD-7-2336

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Nia Impact Capital: Active Ownership for Social Justice

Vanina Farber

By Professor Vanina FarberVanina Farber and María Helena Jaén

The case is about a sustainable investor firm, Nia Impact Capital (Nia) (Oakland, California), and its founder and CEO, Kristin Hull. Hull aims to invest in gender and racial justice and to make money with meaning and purpose. She brings the logic of impact investing to public markets, exercising active ownership, and engaging with portfolio companies, including Tesla, IBM, and Apple. Hull has a crusade for social justice and against mandatory arbitration. For that purpose, she filled shareholders resolutions and has had proxy votes in the 2020 and 2021 proxy seasons. The case focuses on Nia's engagement with Tesla and the 2021 proxy season. Tesla is a leader across the renewable energy sector but is in the news for sexual harassment and racial discrimination. In 2020, Nia submitted a shareholder resolution on Tesla's mandatory employee arbitration to the US Securities and Exchange Commission (SEC). In her speech during the Tesla's shareholders in September 2020, Hull made her case against the company's forced arbitration for employee sexual harassment and racial discrimination claims. Tesla disputed the proposal, and Nia didn't get a shareholder's winning vote. Hull's crusade in 2020 towards Tesla received extensive media coverage and showed her strategy as an activist investor. In her words, "it was a win because it was an important move in a much larger and longer campaign." As part of her battle, Hull decided to raise her voice and fill again in October 2021. She thought that Nia's advocacy at Tesla was advocacy for the entire US. Nia's resolution on Tesla's proxy ballot was crucial to her strategy for "connecting the dots about forced arbitration." At the end of the case, Hull must prepare a proposal to the SEC and a speech to Tesla's Board. She thought about the impact on Nia's future strategy if they didn't get 50% of the shareholders' vote in Tesla's board meeting on 7 October 2021.

Learning Objective

• Recognize sustainable investing in the social capital spectrum.
• Explain active ownership in public markets towards sustainable investing as a sustainable investing strategy.
• Analyse stewardship rights and ESG responsibilities of activist investors through active ownership to influence corporate strategy.
• Summarize the active ownership key practices for proactive engagement with companies.
• Critically reflect on the role of personal values and intentionality in an activist investor's leadership.

Keywords Impact Investment, Investment
Settings Northern America, United States of America
Nia Impact Capital
Type Field Research
Copyright ©IMD 2021
Language English
Related material Teaching note, Video
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Reference: IMD-7-2336

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