Companies Pushed to Disclose Political Contributions
Supreme Court decision makes political disclosure even more important for corporations
January 27, 2010 – After the Supreme Court decided on Thursday to allow nearly unfettered corporate contributions to the political process, investors along with campaign reform groups are condemning the decision and encouraging companies to come clean on their political giving.
Green Century Capital Management (Green Century), a Boston-based environmentally-responsible investment advisory firm, has a long history of challenging companies to disclose policies and procedures for political contributions and expenditures, both direct and indirect, made with corporate funds. The firm argues that companies must disclose their political giving in order to avoid potential risks to shareholder value, including reputational and business risks.
"The Supreme Court decision introduces new openings for companies to use shareholder funds to play a direct role in the political process in ways that could pose reputational risks and threaten the company’s bottom line," said Larisa Ruoff, Director of Shareholder Advocacy for Green Century. "We will continue to encourage companies we invest in to protect shareholder value by adopting increased political accountability and transparency measures."
Over the last eight years, Green Century has worked with over 20 companies to increase disclosure of their political contributions. Last year Green Century successfully negotiated political disclosure agreements with three companies, including Whirlpool Corporation*, Cummins Engine*, and Williams Company.* Much of this work is coordinated by the Center for Political Accountability, a non-profit that works with shareholders to bring about increased disclosure of political spending by companies.
"We urge companies to preserve shareholder value by joining with the 70 companies that have adopted disclosure and board oversight of their political spending with corporate funds," said Bruce Freed, the President of the Center For Political Accountability. "We urge companies to police the use of their funds by trade associations and other groups to assure they are not used at odds with the interests of the company and its shareholders."
The decision by the Supreme Court is being resoundingly criticized by campaign finance reform and public interest advocacy organizations. "With last week's decision in Citizens United v. FEC, the Roberts Court turned back the clock and set the stage for a deluge of corporate money in politics, making measures to improve transparency and accountability even more important," said Ruoff.
*As of December 31, 2009, the Green Century Balanced Fund was not invested in Whirlpool Corporation, Cummins Engine, or Williams Company. As of December 31, 2009, Whirlpool Corporation comprised 0.11% of the Green Century Equity Fund; Cummins Engine comprised 0.17% of the Green Century Equity Fund; and Williams Company comprised 0.24% of the Green Century Equity Fund. Portfolio composition will change due to ongoing management of the Funds. Please refer to the Green Century Funds website for current information regarding the Funds' portfolio holdings. These holdings are subject to risk as described in the Funds' prospectus. References to specific investments should not be construed as a recommendation of the securities by the Funds, their administrator, or their distributor.
Green Century Capital Management is an investment advisory firm focused on environmentally responsible investing. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century's mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. Green Century believes that shareholder advocacy is a critical component of responsible investing and actively advocates for greater corporate environmental accountability.
You should consider the Green Century Funds’ investment objectives, risks, charges, and expenses carefully before investing. For a prospectus that contains this and other information about the Funds, call 1-800-93-GREEN, visit www.greencentury.com or email firstname.lastname@example.org. Please read the prospectus carefully before investing.
The Green Century Funds are distributed by UMB Distribution Services, LLC 1/10
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