Impact Blog

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By Elif Senvardarli, ESG Research Analyst, Calvert Research and Management and Julius Huttunen, ESG Research Analyst, Calvert Research and Management

      Washington - The government plays a key role in business and investing by creating the regulatory and legal environment in which companies operate. Part of Calvert's engagement strategy includes engaging with regulators and policymakers to ensure that officials are informed about our position on critical issues. Both on our own, and as a part of larger coalitions, we make our voices heard.

      One piece of legislation we're watching closely is the Financial CHOICE Act. It passed the House of Representatives in June and, among other things, would effectively prevent all but the very largest institutional investors from filing shareholder resolutions. Currently, any investor with at least one percent ownership or $2,000 invested in a company can file a resolution. As the new law is currently written, the $2,000 investment is eliminated a shareholder would need to own at least one percent of a company's shares to submit a shareholder proposal. That would mean owning at least $3.49 billion worth of Exxon Mobil stock to file a proposal there, based on its market cap of $349.6 billion.

      In addition to dramatically limiting the number of potential shareholder proposals, we believe the CHOICE Act would damage the independent structure of regulatory agencies, roll back effective disclosure rules, repeal or weaken key governance reforms and further weaken the Consumer Financial Protection Bureau.

      As a result, on November 8 we joined other members of The Forum for Sustainable and Responsible Investment (US SIF) to visit Capitol Hill to make our position clear.

      Continuing the dialogue

      We always enjoy the opportunity to speak to elected officials and their staffs in person. In our view, it's the best way to have an honest and frank discussion of key issues. This effort was no exception, as we met with the Senate Banking Committee and Senate and House leadership to discuss the CHOICE Act and Climate Change.

      Throughout the day, we were received warmly and had candid discussions on the importance of the shareholder rights, as a way for investors to promote good governance and responsibility on the part of the companies they hold in their portfolios. We shared information on Responsible Investing issues and learned about congressional legislative priorities.

      We received positive comments on the role of the investment community to enact change in corporate behavior. The investor's role in corporate responsibility is understood as an effective market mechanism.

      The fate of the CHOICE Act in this Senate remains unclear, and it's possible that it won't come up for a vote in 2018. Regardless, Calvert will continue to track policy and regulatory developments and speak out when shareholder rights and progress on corporate sustainability are at stake.

      Bottom line: The voice of Responsible Investors needs to be heard on Capitol Hill as well as in company boardrooms. Calvert will continue to engage government officials to help protect investor interests.