May 09, 2013
Biggest Corporate Political Spenders Face Resolutions
by Robert Kropp
Bank of America, Chevron, ExxonMobil and 3M all face shareowner resolutions requesting that they
refrain from using corporate treasuries for political donations.
It used to be that sustainable investors would be satisfied if corporations disclosed policies
describing their rationale for engaging in the political process through donations from their
corporate treasuries. Bruce Freed and the Center for Political Accountability (CPA) have
won much-deserved accolades for their efforts to convince many of the nation's largest companies to
disclose their policies on political spending.
But then came Citizens United. Not
surprisingly, the Supreme Court's dubious rationale in equating corporate political spending with
free speech unleashed the practice to a degree previously unimaginable. In the absence of a
Securities and Exchange Commission (SEC) ruling on the issue—word has it that the Commission is
thinking about it, after receiving an unprecedented 500,000 comments, most of them in support of
disclosure—sustainable investors and other advocates of meaningful reform have stepped up to
address the issue on two new fronts.
Led by the AFSCME Employee Pension Plan and Walden Asset Management, a coalition of
investors launched a campaign in 2012 to pressure companies to disclose their spending on lobbying
activities. Although direct political spending attracts far more media attention, the fact is that
companies spend far more on lobbying activities than they do on expenditures on elections.
The second front seeks to prevent corporations from deploying their treasuries—some portion of
which, as owners, shareowners are entitled to—for political purposes altogether. Last year, Green Century Capital Management and Trillium Asset Management filed resolutions
with Bank of America, 3M, and Target, requesting that they refrain from making political donations.
The resolutions were the first requesting that corporation completely refrain from political
Since last year's proxy season, of course, a Presidential election occurred, and
what governance advocates feared would come to pass did. "The first presidential campaign cycle
since the Supreme Court's Citizens United ruling lived up to its hype," Demos and US PIRG wrote in
a recent repor
t, "breaking previous records for total spending and exaggerating the undue electoral power of
wealthy individuals and special interests to the point of awakening unprecedented public focus on
the failings of our campaign finance system."
With regulatory action on the issue
continuing to lag, sustainable investors are back this proxy season with more resolutions calling
for an end to political spending by corporations. Green Century has returned with a resolution
filed with Chevron, whose $2.5 million donation to GOP SuperPAC represents the largest single
corporate donation since Citizens United.
"Companies have not demonstrated the value of
these controversial expenditures to shareholders," Leslie Samuelrich, Senior Vice President of
Green Century, said. "Consequently shareholders don't want to be left footing the bill as companies
make big gambles in politics."
In a letter to ExxonMobil shareowners, Zevin
Asset Management submitted its rationale for supporting its resolution requesting that the
company refrain from making political donations. "Increased corporate spending in campaign
elections is unpopular among the majority of the American public, and consequently exposes
companies to business and reputational risk," the letter states.
studies indicate that political spending may not have a positive impact on the company’s bottom
line and, in fact, may erode shareholder value," the letter continues.
become involved in the electoral process, they are unnecessarily courting political and
reputational risk," said Sonia Kowal, Director of Socially Responsible Investing at Zevin.
"Companies that choose to refrain from political donations signal that they are able to profitably
conduct business without resorting to regulatory favors."
A similar proposal at Bank of
America was filed by individual shareowners affiliated with Responsible Wealth, and Clean Yield Asset Management requested that 3M refrain from
According to a press release, the four companies targeted by the
resolutions collectively spent more than $11.5 million dollars in the 2012 election cycle.