New manual coaches investors on how to battle corporate political spending after SEC drops issue from 2014 agenda
Investors should submit more resolutions, petition the SEC for stricter disclosure rules and choose their investments carefully in an effort to force US companies to disclose political contributions, the Forum for Sustainable and Responsible Investment (US SIF) says.
‘The growing and largely undisclosed spending by corporations to influence elections and politics in the US’ can be curbed or halted by actions from investors including closer engagement with companies and the formation of groups and associations to tackle the issue, according to a newly released US SIF guide on corporate political spending.
The release of the guide comes after the SEC dropped plans from its 2014 agenda that would oblige companies to disclose political spending, and follows the 2013 proxy season in which shareholder resolutions related to political spending accounted for a third of all ESG resolutions.
‘Public opinion polls confirm the vast majority of Americans are concerned there is too much money in politics and that companies should spend money on political campaigns only if they disclose their spending immediately,’ says Lisa Woll, CEO of US SIF. ‘Responsible investors share their concerns, and believe the companies in which they invest should report and be able to explain the rationale for political expenditures made with corporate funds.’
The guide says investors can sell shares of companies with vague political contribution disclosure policies, vote in favor of resolutions calling for greater disclosure, work with proxy advisory firms to draft institutional voting policies that discourage political spending, and inform IROs of their views.
It then gives instructions to institutional and retail investors on how to find companies such as IBM, Colgate-Palmolive and Wells Fargo that prohibit spending of corporate funds to influence elections. The guide also lists companies including Johnson & Johnson, Chubb, Intel and Western Union that have been targeted by shareholder proposals related to political spending.
