Investors have a right and a responsibility to engage with companies on environment, social, and governance (ESG)-related issues where shareholder value is at stake and improved performance is within reach. Calvert uses strategic engagement and shareholder advocacy to encourage positive change in companies in virtually every industry, both to establish certain commitments and to encourage concrete progress. Here’s how it works in practice.
As company shareholders, Calvert votes on issues of corporate governance and social responsibility at annual meetings. Calvert takes its responsibility seriously and votes each proxy in a manner consistent with the financial and social objectives of our portfolios, in support of most sustainable and responsible shareholder resolutions. Calvert's Global Proxy Voting Guidelines (PDF) integrate corporate governance and corporate social responsibility into what Calvert calls a "sustainable governance" model that it uses to guide its voting decisions and which Calvert makes available to other investment management companies in the interest of furthering our mission. View Calvert's proxy voting decisions.
Any shareholder with $2,000 of company stock, held for one year, can file a resolution calling on a company to take a particular action, such as changing a company policy or asking the company to report to its shareholders on a particular issue of concern. If not settled favorably and withdrawn beforehand, these resolutions may come to a vote in front of all shareholders at the company's annual meeting. Calvert routinely files or co-files up to three dozen resolutions each year with a wide range of companies on our priority objectives. See Calvert’s shareholder resolutions here. In 1986, Calvert became the first mutual fund to file a shareholder resolution (it was on labor/management issues). View Calvert’s shareholder resolutions filed.
Calvert believes there is power in numbers; we often partner with other major investors and NGOs — representing a wide range of voices and interests — to advance common objectives. Calvert can be a co-filer of a shareholder resolution or participate in multi-stakeholder dialogue around industries or particular companies, conduct joint research, and play an active role in broad-based public policy platforms.
Before investing, Calvert regularly initiates conversations with company management as part of our sustainable research process and corporate engagement. Through periodic calls, letters, and in-person meetings, Calvert continues its dialogue with management of companies in which we invest. These interactions provide Calvert with a sharper sense of the company's commitment to, and performance on, ESG issues, enabling us to press for improvement in specific areas of concern.
Calvert works with other investors, corporations, and members of civil society to formulate standards and principles for new and challenging corporate responsibility issues. Such exercises present efficient and effective ways to raise standards across an entire industry. For example, together with other SRIs, human-rights NGOs, and academic experts, Calvert participated in a two-year-dialogue with Yahoo!, Google and Microsoft that produced the landmark 2008 Global Network Initiative—this initiative sets clear guidelines for internet service providers in respecting freedom of expression and the right to privacy in their operations around the world.
Calvert engages on public policy issues that are directly relevant to corporate responsibility and sustainability, and thus to the economic interests of shareholders. Calvert uses Securities and Exchange Commission (SEC) comment letters to reinforce its view on certain shareholder rights, meets directly with policymakers to encourage action on energy and climate change, and testifies before congressional committees on areas of focus. For example, in a filing, Calvert urged the SEC to insist on the highest possible disclosure requirements by oil, gas and mining companies to prevent so-called “conflict minerals.” The filing was incorporated Dodd-Frank Section 1504 and signed into law on July 21, 2010.
Calvert produces industry and issue reports that substantially contribute to the discourse on best practices in corporate responsibility. For example, Calvert worked with the environmental and investor group Ceres to produce the first-ever assessment of how S&P 500 companies are handling carbon disclosure and has produced other major reports on the green building practices of the U.S. homebuilding industry, the diversity policies and practices of the 600-plus companies in the Calvert Social Index®, and the sustainability best practices within the automotive industry. These reports serve as robust advocacy platforms from which to file or co-file shareholder resolutions and initiate dialogue with company management.
While Calvert's first responsibility is to engage with companies our portfolios already own, we also engage with companies that do not currently pass all of Calvert's ESG criteria and consider them for inclusion in the Calvert SAGE™ Strategy portfolios, which were developed to encourage companies to improve. (SAGE stands for Sustainability Achieved through Greater Engagement.)
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