Subscribe: Apple Podcasts | RSS
In this post, I will provide some shareholder advocacy updates. Shareholder advocacy involves: direct dialog with companies, filing shareholder resolutions and voting proxies. See our video here.
Impact Investment Returns
I get asked this regularly, so I wanted to briefly address it. How do sustainable, responsible, impact investment (SRI) returns compare to traditional index investments?
I can point to at some returns comparing indexes to SRI. The table below shows the 1 year and 5 year annualized returns for indexes and SRI funds in the same class. I am not showing that every SRI fund outperforms the index. I am showing that returns from SRI funds are competitive and in line with the index returns.
| Fund | Ticker | Performance | |
| 1yr | 5yr annizd | ||
| *Russell 1000 | 21.7% | 15.7% | |
| Calvert Large Cap Core Index | CSXAX | 20.1% | 15.8% |
| iShares MSCI KLD 400 Social | DSI | 20.3% | 15.7% |
| Vanguard FTSE Social Index | VFTSX | 23.6% | 17.4% |
| Calvert Equity | CSIEX | 25.1% | 14.5% |
| *S&P MidCap 400 | 16.2% | 15.0% | |
| Parnassus Mid-Cap | PARMX | 15.2% | 14.0% |
| Calvert MidCap Index | CMJAX | 18.2% | |
| Walden Midcap | WAMFX | 18.8% | 14.2% |
| *MSCI EAFE | 25.0% | 7.9% | |
| Domini Impact International Equity | DOMiX | 25.3% | 10.0% |
| *MSCI Emerg Mkt | 37.3% | 4.4% | |
| Calvert Emerging Markets | CVMAX | 44.3% | 9.4% |
| *Barclay US Agg Bond | 3.5% | 2.1% | |
| Calvert Bond | CSIBX | 4.4% | 2.2% |
| *S&P 500 | 19.4% | 13.4% | |
| iShares Global Clean Energy ETF | ICLN | 21.1% | 8.3% |
| *Russell 1000 Value | 13.6% | 14.0% | |
| Praxis Value Index | MVIAX | 16.0% | 13.7% |
Performance as of 1/1/2018
A report by GIIN shows a comprehensive review of available research to date on the financial performance of impact investments. The report finds that impact investors that target market-rate returns can achieve them. You can get the report here: https://thegiin.org/research/publication/financial-performance
Another point on performance is thinking about where SRI funds vary from indexes – see our blog on the SRI vs traditional index performance. Traditional index funds have more exposure than SRI funds to: global banks, fossil fuel companies, and weapons. SRI funds have more exposure to technology than traditional indexes. When banks, fossil fuels and/or weapons outperform the broader market, traditional indexes will outperform SRI funds. When they under perform the market or when technology outperforms the market, SRI funds will outperform. However, the difference in performance given the amount of difference in the two approaches will generally lead to small performance differences.
Shareholder Advocacy
RE 100
The RE 100 – a global initiative launched in September 2014 by the CDP and Climate Group – has quickly reached critical mass. RE100 galvanizes corporations to commit to a time-bound goal to power the entirety of their operations with renewable energy, and offers technical and educational assistance to help make the goals reality. Over 100 global companies with a combined $2.5 trillion in revenue, with the help and encouragement of an investor group that includes First Affirmative, have made the commitment.
Domini
2017 shareholder resolutions filed by Domini.
| Lead filer: | ||
| AT&T | Indirect political contributions | 30% |
| Chipotle Mexican Grill | Sustainability reporting | Agreement Reached |
| Intercontinental Exchange | Stock exchanges and sustainability disclosure | 10% |
| Kraft Heinz | Deforestation | 13% |
| Michael Kors | Protecting migrant workers in global supply chains | Agreement Reached |
| Motorola Solutions | Protecting migrant workers in global supply chains | 12% |
| Nucor | Lobbying report (tied to climate change) | 38% |
| Co-filer: | ||
| Biogen | Pharmaceutical pricing | Excluded at SEC |
| Merck | Pharmaceutical pricing | Excluded at SEC |
| PepsiCo | Pesticide pollution | 9% |
| UPS | Renewable energy goals | Agreement Reached |
Calvert
| ADVOCACY AREA | NUMBER OF RESOLUTIONS FILED | SIGNIFICANT OUTCOMES |
| CLIMATE CHANGE AND ENERGY | 8 | Dillard’s agreed to report to the Carbon Disclosure Project to describe Management of climate risks and impacts, while Amgen agreed to assess its next steps on renewable energy and disclose its current and future renewable energy initiatives. Six proposals went to a vote at annual meetings, including several filed with electric utility companies, which are under pressure as concern about climate change and corresponding regulation threaten to disrupt business as usual. |
| WATER RISKS AND IMPACTS IN AGRICULTURE | 3 | Dean Foods and Fresh Del Monte committed to report on water risk and water risk management in their operations and supply chains. The global food sector, which uses 70 percent of the world’s freshwater resources, faces increased financial and operational risk from shrinking water supplies. |
| BOARD OVERSIGHT OF SUSTAINABILITY AND BOARD DIVERSITY | 2 | Bed Bath and Beyond will amend its governance documents to reflect the Board of Director’s oversight of environment and social risks. Our proposal at Discovery Communications on board diversity earned 18 percent support; we filed a board diversity proposal for the second year in a row. On October 21 the company announced that it will be adding Susan Swain to the Board of Directors. |
| HUMAN RIGHTS AND INDIGENOUS PEOPLES’ RIGHTS | 3 | Calvert continued to affirm its commitment to protect Indigenous rights by filing resolutions regarding offensive and inaccurate portrayals of Native Americans at Netflix and degrading sports teams names at FedEx Corp. Calvert also co-filed a proposal at Kroger on human rights in the company’s supply chain, addressing the area of high risk for food retailing companies. The proposal earn 25% support at its annual meeting. |
| MARKETING TO CHILDREN | 2 | Calvert co-filed proposals at Alphabet (Google) and Time Warner about company policy responses to public health concerns, particularly how on-line marketing to children affects children’s nutrition, obesity and health. Both proposals were withdrawn for further dialogue. |
| SUSTAINABILITY REPORTING | 8 | HealthSouth and Liberty Media committed to increase their sustainability disclosure on their websites, and OGE Energy committed to prepare a report, which in each case, specifically addresses workplace issues, safety performance, and efforts to improve operational performance and reduce resource waste. In addition, another company pledged to establish an interdepartmental sustainability panel to oversee disclosure of its sustainability information. |
| MINIMUM WAGE REFORM | 2 | Calvert co-filed two proposals. Panera Bread will assess employee benefits and compensation and then report out to shareholders. |
FIRST AFFIRMATIVE
First affirmative is a network of SRI financial planners. They manage money for advisers.
| COMPANY | REQUEST | LEAD FILER | STATUS | |
| ENVIRONMENT & CLIMATE CHANGE | Kinder Morgan (re-file) | Report analyzing “carbon asset risk” and company plans to address global concerns regarding fossil fuels and their contribution to climate change | First Affirmative | 38.2% support |
| Hess Corporation (refile) | Report analyzing “carbon asset risk” and company plans to address global concerns regarding fossil fuels and their contribution to climate change | As You Sow | 30% support | |
| Emerson Electric | Issue a sustainability report Walden Withdrawn, report published | Walden | Withdrawn, report published | |
| Mondelez | Report on impacts of company continuing to use non-recyclable packaging | As You Sow | 27.5% support | |
| Costco | Report on company actions to assess, disclose, reduce and optimally manage food waste | Trillium | Withdrawn, successful dialogue | |
| Whole Foods | Report on company actions to assess, disclose, reduce and optimally manage food waste | Trillium | 30.4% support | |
| Kroger | Issue annual reports on its supply chain impacts on deforestation, and progress towards reducing such impacts | Green Century | 22.9% support | |
| Target | Issue annual reports on its supply chain impacts on deforestation, and progress towards reducing such impacts | Green Century | Withdrawn, successful dialogue | |
| HUMAN RIGHTS | Goldman Sachs | Report on the application of the companies indigenous peoples policy to the financing of Dakota Access Pipeline | As You Sow | Withdrawn, successful dialogue |
| Morgan Stanley | Report on the application of the companies indigenous peoples policy to the financing of Dakota Access Pipeline | As You Sow | Withdrawn, successful dialogue | |
| GOVERNANCE | BlackRock | Report on incongruities between the company’s proxy voting practices and policy positions regarding climate change | First Affirmative (co-lead w/ Walden) | Withdrawn, successful dialogue |
| Bank of New York Mellon | Report on incongruities between the company’s proxy voting practices and policy positions regarding climate change | Walden | 6.52% | |
| JPMorgan Chase | Report on incongruities between the company’s proxy voting practices and policy positions regarding climate change | Walden | Withdrawn, successful dialogue | |
| LOBBYING AND POLITICAL SPENDING | Travelers | Prepare report summarizing policies governing lobbying and detailing expenditures, including lobbying done on the company’s behalf by trade organizations. | First Affirmative | 37.4% support |
| Conoco Philips | Prepare report summarizing policies governing lobbying and detailing expenditures, including lobbying done on the company’s behalf by trade organizations. | Walden | 23.9% support |
TRILLIUM
Trillium’s shareholder activism highlights can be seen here: http://www.trilliuminvest.com/wp-content/uploads/2014/08/Q1-Q2-2017-ShareholderAdvocacyHighlights.pdf
GREEN CENTURY
Green Century’s impact investing highlights for 2017 are here:
https://www.greencentury.com/shareholder-advocacy/
Get a free Sustainable, Responsible, Impact Investing Guide
Learn about making an impact with your investments without sacrificing returns.
AIO Financial, 520-325-0769
