Case Studies

The Nathan Cummings Foundation’s Role as Shareholder Activist

Laura Campos

After 15 years of working on shareholder engagement efforts at the Nathan Cummings Foundation, Laura Campos is surprised that more foundations haven’t begun initiatives of their own.

“It looks like a really complicated space, because you’re dealing with the SEC, and these regulations can sound intimidating, but it’s really not that difficult,” said Campos, who serves as the organization’s Director of Corporate and Political Accountability. “There are so many people in this space that want to help others do a better job of being an active owner. There is so much in the way of resources and assistance out there that it’s an easy space to learn.”

Results That Matter

Campos points to several examples where the Nathan Cummings Foundation’s activism led to tangible results, including getting pork producer Smithfield Foods to increase its environmental reporting, prompting homebuilders to start setting greenhouse gas emissions reduction goals, and prompting more companies to disclose their political spending.

More recently, the Nathan Cummings Foundation has worked with Wespath Investments on a resolution asking Occidental Petroleum to conduct an assessment of the long-term impacts of climate change on its business. In May 2017, the resolution passed with support from more than 50 percent of shareholders, including powerhouse firms like BlackRock and Vanguard, marking the first time a climate-risk proposal passed at a major US oil and gas company.

“That was a historic victory,” Campos said.

As an organization, the Nathan Cummings Foundation continues to find innovative ways to do more good. In March 2018, the organization announced that it would move its entire endowment into mission-aligned impact investments. “The Foundation’s decision to align 100% of its endowment with its mission builds on its decade-long commitment to active ownership and our recognition that environmental, social and governance issues can and do impact long-term returns, not just in the public equities space, but across all asset classes,” said Campos.

The Screening Process

To select companies to target, the Nathan Cummings Foundation uses two screens. First, the goal must align with their programmatic interests, meaning there have to be implications for climate change or for inequality. Second, there has to be an implication for long-term shareholder value.

That latter screen is important. Since she began working in this field, Campos has noted shifts in the corporations she works with, with fewer companies viewing shareholders engaging on these issues as hostile opponents. Particularly on climate issues, there’s a broader acceptance that understanding the issues and risks involved is key to long-term business success.

“We have really seen a huge shift in the acceptance and recognition of the fact that environmental issues can have a material impact on a company’s bottom line,” Campos said. “One of the things that I am focused on changing going forward is helping to drive that same level of acceptance on issues that traditionally fall into the ‘S’ of the ESG, the social issues. We are starting to get there.”

Part of that is helping companies understand why it’s so important to invest in employees.

“Companies say that one of their biggest assets is their employees, their human capital,” she says.”But they often treat it as an expense to be minimized. They might have high turnover if they don’t treat their employees as well as they could. There’s an argument for paying people fairly and paying a minimum wage and making sure that the people you’re employing are able to live a decent life.”

Bringing In Experts

According to Campos, one key to success is having access to experts who can help you understand specific issues and the solutions that you may be asking a company to implement. The Nathan Cummings Foundation often works with organizations like CERES, the Center for Political Accountability, and the 50/50 Climate Project, all of which are also grantees of the Foundation.

“I understand corporate governance really well, but I’m not an expert in renewable energy or lobbying,” she said. “There are so many groups working in this space that can provide the expertise.”

The work of shareholder activists becomes even more significant when the work on such goals isn’t progressing from a regulatory standpoint, Campos noted.

“We have seen recently companies stepping up as advocates and allies on a number of social and environmental issues where progress at the federal level has been rolled back or is in jeopardy,” she said, citing companies’ commitment to the Paris Agreement and protection for Dreamers. “I just think this is such an important time to be using this strategy to drive corporations to really take a look at how these things impact their companies—and how they can make a difference.”

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