Responding to the unprecedented level of outside spending in last year's election cycle, Responsible Wealth has joined a coalition of investors to step up its campaign to press companies to refrain entirely from making political contributions. The coalition, including Clean Yield Asset Management, Green Century Capital Management, Zevin Asset Management, and Harrington Investments, has filed resolutions with Chevron, Bank of America, 3M, Target, Starbucks, ExxonMobil, and the EQT Corporation. Responsible Wealth members filed at Bank of America and Target.
Because of the 2010 Citizens United ruling, so-called “independent” or outside spending in federal elections—made in support of candidates by groups with no supposed connections to their campaigns—contributions increased nearly fivefold between 2010-2012, from $300 million to $1.3 billion (Center for Responsive Politics). Just last week, Demos & the US PIRG Education Fund released a report estimating that for-profit corporations were responsible for at least $101 million in political spending in the 2012 elections, although the actual amount could be up to four times that amount due to vagaries in reporting requirements.
“In 2012, Chevron gave $2.5 million dollars of company funds to a Super PAC—the single largest corporate donation to a Super PAC ever. Shareholders don’t want to pay for Chevron’s political preferences or contribute to the untamed spending unleashed by the Citizens United ruling. It’s time for Chevron to listen to its shareholders and stop throwing millions of dollars into the wind.” - Leslie Samuelrich, Senior Vice President of Green Century Capital Management
At the same time, we’re seeing a rise in public opposition and backlash to corporate influence in the democratic process. In February 2010, immediately following the Citizens United decision, an ABC News/Washington Post poll found that 80% of respondents opposed Citizens United, across partisan lines. Political spending and lobbying undermine the trust of the consumer.
“By the sheer volume of money involved, dollar democracy by corporations is drowning out individual political voices and undermining the essence of the American political system. ExxonMobil’s huge political donations are symptomatic of this corrosion of democracy, so as shareholders, we have a responsibility to put a stop to this dangerous behavior.” - Sonia Kowal, Director of Socially Responsible Investing at Zevin Asset Management
And contrary to conventional wisdom, campaign contributions may actually stunt the long-term growth of a company. A 2012 University of Minnesota study found that companies contributing to political action committees and other outside political groups between 1991-2004 grew more slowly than other firms, invested less, spent less on research and development, and were linked to poor corporate governance.
By changing their policies around political spending, companies have an opportunity to set a higher standard in business, raising the bar for their competitors. At Target, Bank of America, ExxonMobil, 3M, and EQT, Responsible Wealth and its partners are calling for company directors to conduct a study examining the feasibility of adopting a no-spending policy. Chevron is being asked to completely desist from political giving. And at Starbucks, the request is for a complete end to political spending while also asking the company to refrain from establishing a political action committee, a vehicle for raising and spending money from employees and shareholders.
Responsible Wealth members Marnie Thompson & Stephen Johnson (Greensboro, NC) and RW Director Mike Lapham are currently in negotiations with Target executives and are pressing the company to be more transparent about its process and reasons for engaging in political giving. If Target changes its policy around political giving, it’s possible the bar will be raised for its competitors. Only time will tell, but for now, we’re keeping the pressure on.
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