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Lobbying Disclosure a Hot Topic in 2014
By Holly Testa, Director, Shareowner Engagement

Institutional investors are once again requesting that companies disclose federal and state lobbying activity, including activities conducted through third parties such as trade organizations.

The campaign, organized by AFSCME and Walden Asset Management, has rapidly gained momentum over the past four years. In 2011, AFSCME Employees Pension Plan started the campaign by filing six shareholder proposals. The organizing investors recently announced that 48 proposals have been filed by 60 institutional investors for 2014. The average support for these resolutions has remained well over 20%. Over 25 companies, including 3M, Accenture, Amgen, and Bristol-Myers Squibb have improved their disclosure practices as a result of this campaign.

Corporate political spending on elections has garnered much attention since the U.S. Supreme Court’s Citizens United decision that led to unlimited and often undisclosed contributions made to influence the electoral process. So it should, given that spending on elections topped $6 billion in 2012, with companies contributing around one third of that.

This number may seem staggering, but many companies spend as much as ten times the amount they put into elections on lobbying—to influence the legislative process in various ways that are deemed in the best interests of the company.

While direct federal lobbying must be reported by companies, this published information does not include state level lobbying or lobbying done on behalf of the company by other organizations. Substantial corporate dollars are funneled through trade associations and other third-party organizations for lobbying purposes and to support model legislation.

The U.S. Chamber of Commerce alone has spent more than $1 billion on lobbying since 1998, making it the country’s largest lobbying spender. But the Chamber is not required to release donor information, and most companies do not disclose their trade association memberships or payments made that are used for lobbying. This is crucial information, given that companies are delegating their lobbying and spending decisions to a third party.

Shareowners seek greater corporate transparency and accountability with regard to lobbying practices so that they can better evaluate whether a company’s lobbying expenditures and actions advance the company’s interests and do not present risks to company value.

First Affirmative Financial Network is participating in this campaign. We are serving as lead filer at IBM, and are supported by 20 co-filing investors. We have also co-filed at Google.


First Affirmative understands that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impact our money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?


Mention of specific companies or securities should not be considered a recommendation to buy or sell that security. Past performance is no guarantee of future results.

Posted: March 19, 2014