Note: This article has been updated to correct a date range of MapLight data.
Two investment firms announced Tuesday that they have filed shareholder resolutions at Bank of America, 3M Company, and Target Corporation, urging the three companies to refrain from making political donations in the future.
This is the first time institutional shareholders have asked corporations to entirely refrain from political spending. None of the three immediately responded to requests for comment.
At the same time, government watchdog groups Common Cause and the U.S. Public Interest Research Group said Tuesday they were launching a broader campaign against corporate political spending by mailing out letters to 700 businesses.
Trillium Asset Management and Green Century Capital Management announced the shareholder resolutions. Trillium filed at BofA and 3M; Green Century filed at Target.
Shelley Alpern, director of shareholder advocacy at Trillium, said in a statement that political contributions “expose companies and their shareholders to significant risk.” Alpern said companies should choose other means “to express their political and policy preferences that do not divert shareholder resources toward political ends that [shareholders] may not support and which may cause public controversy.”
Trillium said it chose BofA because of “concern that continued political spending could expose the company’s already-battered brand to further risk, given its sizable ‘political footprint.’ ” Since 2007 the bank has spent $5.4 million on political contributions—more than any other single financial institution, according to figures by the non-partisan research firm MapLight.
Minneapolis-based Target operates 1,755 retail department stores in 49 states. St. Paul-based 3M produces products for markets ranging from health care and highway safety to office products and adhesives.
MapLight said neither Minnesota company ranks in its top 200 list of political contributors. From January 2007 to June 2011, MapLight said Target gave $849,000 to Congressional campaigns, while 3M gave $481,000.
But it wasn’t the companies’ Congressional spending that drew shareholders’ attention.
The investment firms’ press release indicated those two companies were chosen because of their “controversial” backing of an anti-gay candidate in the 2010 Minnesota governor’s race.
Target and 3M both have corporate non-discrimination policies regarding gays. But Republican Tom Emmer, a former member of the Minnesota House of Representatives, was anti-gay. Target and 3M drew criticism and a consumer backlash for financially supporting Emmer, who lost a close race in a December recount.
Common Cause and U.S. PIRG said they are sending letters to more than 700 businesses, including all 500 of the companies in the S&P 500, asking each to sign a public pledge renouncing the use of funds from their corporate treasuries for political purposes.
The letters also ask companies paying dues to trade groups, including the U.S. Chamber of Commerce, to specify that their dues should not be used for political ends.
“The use of corporate funds to influence our elections is bad for business and bad for our democracy,” said Bob Edgar, CEO of Common Cause.
Larisa Ruoff, a shareholder advocate at Green Century, added, “Given that corporate political spending may have a long-term negative correlation to shareholder value, and Target’s firsthand experience with contribution-related backlash, we believe companies should protect against risk and refrain from using treasury funds for political purposes.”
See also: “Shining a MapLight on Corporate Political Influence,” CorpCounsel, January 2012.