Complete List of Articles by Category
Climate Scientist Joins Exxon Board
Investors Challenge Mutual Funds on Proxy Voting
Many Large Mutual Funds Continue Failure to Address Climate Change
April 11, 2016
Walden Updates Shareowner Action on Lobbying
by Robert Kropp
Tim Smith of Walden Asset Management posts update on the 50 shareowner proposal addressing
corporate lobbying expenditures filed this proxy season.
For more than a decade, the Center
for Political Accountability (CPA) and its sustainable investor allies have advocated with
remarkable success for corporate disclosure of political expenditures. At last count, “More than
140 large companies—including more than half of companies in influential S&P 100—have struck
political disclosure agreements with CPA and/or its shareholder partners,” CPA reports.
But there are other ways in which
corporations use money to influence political processes; in fact, corporate lobbying expenditures
far exceed the amount of direct corporate political spending. In addition to lobbying at the state
and federal levels, corporations pay dues to politically active trade associations such as the US
Chamber of Commerce. Since 1998, Tim Smith of Walden Asset Management observed recently, the Chamber
has spent over $1.2 billion in lobbying.
And then there is the American Legislative
Exchange Council (ALEC), a nonprofit organization whose authorship of state-level model legislation
such as the Stand Your Ground law in Florida and elsewhere was met with outrage after the killing
of 17-year-old Trayvon Martin. The potential reputational risk of corporate membership in ALEC has
led to 105 companies leaving the organization in recent years.
Along with the American
Federation of State, County and Municipal Employees (AFSCME), Walden has organized a coalition of
sustainable investors that have filed 50 shareowner resolutions with corporations this proxy
season. The resolution filed with ExxonMobil, for example, requested that the company prepare
annual reports addressing the following:
1. Company policy and procedures governing lobbying,
both direct and indirect, and grassroots lobbying communications.
2. Payments by ExxonMobil
used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case
including the amount of the payment and the recipient.
3. ExxonMobil’s membership in and
payments to any tax-exempt organization that writes and endorses model legislation.
Description of management’s and the Board’s decision making process and oversight for making
payments described in sections 2 and 3 above.
Smith, who is Director of Environmental
Social and Governance (ESG) Shareowner Engagement at Walden, recently posted an update on the
progress of the lobbying resolutions in this year's proxy season. “This ongoing campaign,” Smith
wrote, “has had a steady positive effect.”
“This year companies including Raytheon,
CenterPoint and DuPont came to agreements with investors to expand their lobbying disclosure,” he
On the other hand, Smith further noted, “Companies are listing the large trade
associations they are part of but declining to provide any details of financial support (dues and
additional payments) and the amounts used for lobbying.”
“We commend companies for their
responsiveness to the call for disclosure of political expenditures related to elections,” he
wrote, “while reminding them lobbying disclosure is a coveted but separate topic and that 'good
grades' in one doesn’t offset failing disclosure in another.”
Shareowner resolutions filed
at companies that fail to adequately disclose payments to trade associations, Smith warned, will
remain on proxy ballots, even if they receive adequate scores from the CPA-Zicklin Index.
“We believe it is
important to have a basic set of standards for disclosure,” he concluded. “If a company responds
meaningfully, investors are pleased to withdraw the resolution in response.”
Support This Site
© 1998-2008 SRI World Group, Inc. All Rights Reserved.