Political Contributions and Lobbying

Ungoverned and undisclosed corporate involvement in the political process presents a risk to companies and their shareholders

A major area of concern for the Occupy Wall Street and related protests is the influence of money in politics. In particular there is a deep unease with the increasing price tag of elections and the undue role of corporate interests in the U.S. political process. The accumulation of wealth and the growing disparity between rich and poor, which is a dominant theme of the protests, is therefore not just an economic problem, but is seen to undermine our democracy.  Concentrated wealth is viewed as concentrated power at the expense of equal access to our political process.

Calvert shares the concern about the tide of money and the risks that corporate involvement in both elections and the policy-making process can present to companies and shareholders, and to the furtherance of a just and sustainable society.  The U.S. Supreme Court’s 2010 decision in Citizens United v. the Federal Election Commission removed all but a handful of restraints on corporate political spending, which has increased the risks that can come from ungoverned and undisclosed political spending.

Calvert has worked with other investors to address the risks to individual firms by calling on companies to establish political spending transparency and oversight. Shareholders have a right to know how corporate assets are being spent in furtherance of political campaigns, social causes or government lobbying activities.  Corporate lobbying activities and political spending may at times be inconsistent with or actually undermine shareholder and stakeholder interests that companies are otherwise responsible to protect. Such political activity could also threaten a company’s reputation, bottom line and shareholder value.

For example, in 2010, Target Corp and Best Buy became embroiled in a public controversy and faced boycotts as a result of their contributions to a gubernatorial candidate in Minnesota with views that conflict with the companies’ policies on human rights. Calvert and other investors filed shareholder proposals, and as a result, both companies instituted a comprehensive review of their political spending and public policy philosophy, decision-making, policies and disclosure. Calvert and its partners subsequently withdrew the shareholder proposals.

Ten companies with which Calvert has engaged have adopted oversight and disclosure of political spending. A notable success was our engagement with Pfizer, where we filed a shareholder proposal and maintained a productive dialogue. The company was recently ranked one of the top 10 companies for political spending transparency according to the Center for Political Accountability-Zicklin Index.1

Calvert and other investors are also challenging companies to address the actions of their trade associations, which in some cases run counter to the companies’ stated positions on important environmental, social and governance issues. For example, Calvert and Walden Asset Management coordinated an open letter sent on behalf of nearly two dozen investors and investment organizations, representing over $200 billion in assets under management, to 43 major companies on the Board of the National Association of Manufactures (NAM) urging them to explain the misalignment between their own company’s climate policies and NAM’s position seeking to strip EPA of its ability to curtail greenhouse gases.  Calvert has taken similar action challenging companies who are members of the Chamber of Commerce to speak out on important environmental and social issues when they disagree with the trade association, which states that its views represent the views of its member companies. Our fundamental interest is that the companies in which we invest avoid contradictions between their stated policy objectives and those advanced by trade associations of which they are members.

There is risk to both society and to individual companies and their shareholders when corporate political spending and lobbying occur without appropriate oversight. Calvert’s engagement with companies is premised on the idea that management and the board of directors are responsible for how shareholder money is used in the political process. Furthermore, companies must be willing to defend the policy positions that are supported with corporate funds, whether those positions are voiced by the company directly or the positions are pursued by powerful industry associations and lobbying groups in Washington, D.C on a company’s behalf.


Calvert Investment Management, Inc. 4550 Montgomery Ave. Bethesda, MD 20814

Accounts managed by Calvert Investment Management, Inc. may or may not invest in, and Calvert is not recommending any action on, any companies listed.

1. Center for Political Accountability and Zicklin Center for Business Ethics Research, The CPA-Zicklin Index of Corporate Political Accountability and Disclosure.

11726 (11/11)

Calvert Perspective on Occupy Wall Street

Publication Date: November 15, 2011

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