Major investor coalition seeks disclosure of US corporate lobbying expenditure

Shareholder resolutions tabled at 40 blue chip companies

A group of US investment institutions have filed shareholder resolutions at 40 companies calling on them to report on their spending on direct lobbying and lobbying via trade associations.
The group wants greater transparency on how companies influence regulation and law-making.

Backers of the initiative include investors such as the $134bn (€104bn) New York State Common Retirement Fund, Walden Asset Management, the AFSCME Employees Pension Plan, PAX World Fund and the Tides Foundation.

The coalition has been organised by Walden and the AFSCME and also includes faith-based investors such as Christus Health, Catholic Health East, the Sisters of St. Joseph of Boston, the Sisters of Notre Dame and Mercy Investment Services.

Among the companies targeted are household names like AT&T, Bank of America, Chevron, Coca-Cola, Goldman Sachs, Johnson & Johnson, J.P. Morgan Chase, PepsiCo and UPS.
“This year investors have taken a logical next step and asked companies to disclose their direct and indirect lobbying activities,” said Timothy Smith, Director of Environmental, Social and Governance Shareowner Engagement at Walden.
“Whether the issue is environmental impact, consumer protection, financial reform or shareholder rights, it is important for investors to understand how companydollars are spent to influence our laws and regulations.”
They argue investors they have the right – and need – to understand how company resources are spent influencing elections and public policy, and that it’s a natural extension of calling for transparency on political spending.

They say better disclosure of lobbying spending will enable them to evaluate business risk. The move is consistent with the ruling in the controversial ‘Citizens United’ case, which freed US firms to make political contributions, the investors say.
Citing recent research by Si2 that was funded by the Investor Responsibility Research Center Institute (IRRC), the coalition notes that S&P 500 companies spent $979m on lobbying in 2010. This figure doesn’t count the largely unreported lobbying by trade associations to which companies contribute.
“As a fiduciary, it’s important that companies in which the New York State Common Retirement Fund invest are open, transparent and demonstrate high standards of governance,” said New York State Comptroller Thomas DiNapoli.
The coalition says most companies do not provide even rudimentary disclosure on their lobbying expenditures and practices to investors. Some 64% of S&P 500 firms make no mention of lobbying activities, policies or oversight. And just 13 companies provide information on lobbying spend. Announcement