Rally for Positive Change and Positive Returns

Winter's chill lingers in many parts of the U.S., but spring's right around the corner. That means proxy season is about to heat up, and many shareholder activists are announcing their intentions to put important proposals up for shareholder votes at well-known companies.

Votes against environmental degradation
Climate change hasn't gotten far in policy making, but many huge companies see the writing on the wall and are taking action on their own. Recent findings from Ceres, Calvert Investments, and World Wildlife Federation showed that 60% of Fortune 100 and Global 100 companies have crafted renewable energy and/or greenhouse gas reduction goals.

Given the risks of climate change going forward, investors should be aware of whether their companies are behind the times on working on their carbon footprints and pushing their energy use into cleaner methods.

That's why activists like CalSTRS, Calvert Investments, and Green Century Capital Management have filed climate-change-related resolutions at 13 companies including Electronic ArtsEquity Residential, and Roper Industries.

Activists' efforts have already panned out; resolutions have been dropped at IBM (NYSE: IBM  ) and Public Storage because both agreed to increase their disclosure of clean energy performance. Granted, this may represent little skin off IBM's metaphorical nose, given its No. 1 ranking on Newsweek's top green companies list released late last year.

This is just the tip of the iceberg when it comes to shareholder resolutions for investors to vote on. Ceres has announced that affiliated investors have filed 91 resolutions with 78 companies for the 2013 proxy season so far, all focused on climate and sustainability risks.

Votes against corporate imperialism
The problems in the financial industry continue, not least of which is "too big to fail," which not only hasn't been resolved but has also become worse. Many of us would say business as usual just isn't good.

The AFSCME Employees Pension Plan has filed a variety of shareholder resolutions targeting "Too Big to Fail and Imperial CEOs." It's got 25 shareholder proposals submitted for shareholders to ponder at annual meetings this spring. Most seek to increase accountability and transparency at major firms, and run the gamut from corporate governance issues like separating the CEO and board chairman positions to major political issues like corporate lobbying.

Bank of America (NYSE: BAC  ) is on the list, and subject to current news this week that's of importance to corporate-governance-minded shareholders. CEO Brian Moynihan received a 73% pay increase last year in the form of stock grants worth $12 million. Meanwhile, rumor has it that the financial giant will increase Moynihan's base salary in 2013 . Maybe Moynihan deserves some credit for some better performance at the banking company, but given financials' risks, the longer-term performance may still be in question.

AFSCME is asking giant banks like Bank of America, Citigroup, and Morgan Stanley to perform reviews related to strategic options. Bank of America's board may think Moynihan's a valuable commodity, but apparently AFSCME doesn't see investments in some in its industry as all that valuable to its investors after all.

Corporate lobbying continues to be an outrageous concern for shareholders and the public at large, particularly after the Supreme Court's Citizens United ruling. AFSCME has filed proposals demanding disclosure of direct and indirect lobbying at five companies. These include Chevron, which last year gained the dubious distinction of having made the largest corporate donation to a Super PAC in history: $2.5 million.

Votes for positive change and sustainable returns
Investors who shrug off proposals they have the power to vote on are missing the big picture. For example, the repercussions from climate change could devastate businesses (and, obviously, investment returns).

Rethinking renewable energy and waste helps companies save money and become more profitable over the long haul. That's capitalism's innovative spirit and efficiency at work, after all.

Meanwhile, corporate governance problems add up to big risks for shareholders, and political expenditures by public companies not only siphon money from shareholders, but also may lean completely opposite from many shareholders' own political beliefs.

Given the fact that most Americans actually do own stocks, even passively through mutual funds, issues like these actually do impact just about all of us.

So let's use our shareholder votes for positive change and positive returns over the long haul. More and more shareholder activists are filing proposals that deserve our full attention when it comes to risk versus reward.

More advice from the Motley Fool
Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank's operations, including three reasons to buy and three reasons to sell. Click here now to claim your copy, and as a bonus you'll receive a full year of FREE updates and expert guidance as key news breaks.

Check back at Fool.com for more of Alyce Lomax's columns on environmental, social, and governance issues.


Read/Post Comments (4) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 20, 2013, at 6:19 PM, smartmuffin wrote:

    You must be wrong Alyce. Dodd-Frank ended "too big to fail" forever. We know because our wise and benevolent overlords told us so.

  • Report this Comment On February 20, 2013, at 8:31 PM, BillFromNY wrote:

    Wow! "Corporate Imperialism."

    I haven't heard that expression since the 1969 anti-war demonstration in Washington.

    This climate change sounds real scary, but I'm still too scared about Paul Ehrlich's bestselling The Population Bomb, which predicts that 500 million people will die by the 1990s and the polar ice caps will melt and raise the ocean levels by twenty feet.

    I can only handle one doomsday story at a time.

  • Report this Comment On February 21, 2013, at 4:46 PM, mdk0611 wrote:

    Is AFSCME willing to make the same disclosures set out in their proposals?

  • Report this Comment On February 25, 2013, at 12:48 PM, moneytrail wrote:

    Alyce -- your articles read like they're written in a 1960's Volkswagen bus, splattered with glow paint, by someone wearing a Mama Cass moo-moo!

    Your hollow, frequent attacks on Wal-Mart and other companies that employ hundreds of thousands new entrants into the work force providing them a clear path to career growth, along with employer training programs, for those employees who display workplace responsibility and initiative, is bizarrely contrasted to your presentation of AFSCME as an agent of corporate reform. Even the most casual of observers can’t help but take note of AFSCME’s corruption and forced confiscation of workers’ salaries in the form of union dues, lavishly spent by the goons who run the Union on perks and contributions to the election of corrupt politicians who complete the cycle of corruption. All this with taxpayer funded jobs, many of which are completely unnecessary, overpaid or too often no show positions.

    Wouldn’t it be refreshing if AFSCME opened ITS books to the public and allowed public employees to decide for themselves whether they want to contribute part of their salaries to union overlords? Perhaps it’s time to place at least one foot into the 21st century. You’re views are so out of touch with fundamental, common sense investment analysis, one is forced to wonder why MF has you on staff.

Add your comment.

DocumentId: 2266578, ~/Articles/ArticleHandler.aspx, 4/20/2014 10:09:46 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement