CalSTRS and Walden Asset Management issued a release announcing an 80+ institutional investor call on 45 companies serving on the National Association of Manufacturers (NAM) Executive Committee and Board to disassociate themselves from NAM's alleged attack on ESG-related shareholder proposals and engagement via its affiliation with - and alignment with positions espoused by - the recently-formed Main Street Investors Coalition (MSIC) (reported on here), and its funding of this study: "Political, Social, and Environmental Shareholder Resolutions: Do they Create or Destroy Shareholder Value?"
Their letter campaign asserts: "While the MSIC's stated mission to bring a voice to retail investors is laudable, its underlying assumption - that by supporting shareholder proposals institutional investors are playing politics rather than advancing business interests - is deeply flawed." The letters: (i) note the significant institutional investor participation in ESG engagement-related activities for the purpose of mitigating investment risk and promoting long-term shareholder value; (ii) surmise that many of the target companies don't in fact share the views expressed by NAM and the MSIC on these issues; and (iii) suggest that their continued affiliation with these organizations will position the companies adversely vis-a-vis their investors and may subject them to reputational risks.
The letters further ask the companies to address these questions about their positions:
- Is the company aware of the new NAM paper and its attack on the efficacy of shareholder resolutions and ESG investing factors?
- What are the company's views on the priorities and objectives of NAM's new partner, Main Street Investors, and its work to discredit shareholder resolutions?
- Will the company help clarify for the record and the investing public where it stands on the right of investors to file shareholder proposals and its thoughts on efforts to significantly limit the ability to present such proposals?
Letter recipients are asked to contact Walden Asset Management Director of ESG Shareowner Engagement SVP Tim Smith to discuss the investor coalition's concerns.
This post first appeared in this week's Society Alert!