U.S. federal securities laws are founded on the idea that transparency promotes well-functioning capital markets. This is particularly true when it comes to the urgent goal of reducing global greenhouse gas emissions to prevent the devastating impacts of climate change. For companies, those impacts include both physical risks, including the risk that facilities will be…
Proxy Advisory Firms Release First Reports on Latest Best Practices
For the first time, six of the world’s most influential shareholder voting research and analysis firms (better known as “proxy advisors”), which help institutional investors vote shares at stock-exchange-listed companies worldwide, have each publicly released reports showing how they comply with the latest industry Best Practice Principles. Proxy advisors have been a target of corporate…
The risks of corporate political spending after the Jan. 6 insurrection: Ciara Torres-Spelliscy
As I explained in my book Political Brands and in a law review article entitled “Shooting Your Brand in the Foot,” corporate political spending comes with many reputational risks including associating a well-crafted corporate brand with a toxic politician. If a politician that a corporation has supported gets into an embarrassing scandal or legal trouble,…
How Can Investors Measure Diversity, Equity, and Inclusion? | Morningstar
Equity — in both senses of the word — is a significant indicator of investment risk and reward. In a corporate world awash in acronyms, “DEI” is becoming as ubiquitous as USP and ROI. Diversity, equity, and inclusion was already a focus for many businesses, but the 2020 police killing of George Floyd, the subsequent…
The Shareholder Commons Announces Withdrawal of Shareholder Proposal after Yum! Brands Commits to Disclose Systemic Costs of Antibiotic Use
The Shareholder Commons announced today that Yum! Brands (NYSE: YUM, the “Company”) has agreed to provide comprehensive reporting on the systemic effects of the use of antibiotics in its supply chain by the end of 2021. Paul Rissman, a long-time shareholder of the Company, worked with The Shareholder Commons, a non-profit organization that seeks to…
Activist Stewardship
Highlights from a new article on hedge fund activism on behalf of long-term shareholder value, from Robert Eccles (Oxford University), Aeisha Mastagni (CalSTRS), and Kirsty Jenkinson (CalSTRS): The time has come for “activist stewardship.” Simply put, this means putting the skills and techniques of activist hedge funds to work where a company’s financial performance is…
Agenda – Boards Boast New Directors’ ESG Expertise
“This year there has been an explosion in terms of formal and informal discussions around the boardroom and ESG,” says Scott Atkinson, partner at Heidrick & Struggles and cohead of its sustainability office. “It [has] definitely been a year where we have been sought out to talk about who might be the additional board member…
Sustainable Investing Outperforms During Coronavirus | Morgan Stanley
Highlights of the new Morgan Stanley report on ESG investing: In 2020: U.S. sustainable equity funds outperformed their traditional peer funds by a median total return of 4.3%. U.S. sustainable bond funds outperformed their traditional peer funds by a median total return of 0.9%. U.S. sustainable equity funds’ median downside deviation was 3.1% less than…
How Vanguard Looks at Shareholder Proposals
From the Veritas Compensation in Context newsletter, courtesy of John Galloway, how Vanguard evaluates shareholder proposals: We assess each proposal through a fiduciary lens. First we look for alignment with the Vanguard funds’ corporate governance principles in the company’s board composition, the board’s oversight of strategy and risk, executive compensation, and shareholder rights. We then…
