Washington - At Calvert, we have believed for decades that responsible investors should consider improving environmental and social outcomes - as well as long-term shareholder value - as a core component of our investment approach. We can't quite claim to have been doing this since the first Earth Day in 1970, but dating back to 1982, when the Calvert Social Investment Fund was the first mutual fund to oppose apartheid, we have used our position as an investor to attempt to push society forward.
We publish an annual report on our shareholder advocacy, "Tools of Change", summarizing our engagement activities. During the last proxy season, some of the highlights were:
- Calvert voted for all six shareholder proposals to require companies to create a report on climate change, for all 10 shareholder proposals regarding GHG emissions, and for both shareholder proposals to establish an environmental or social issue board committee.
- Calvert has volunteered to engage three companies as a lead and is in a co-lead or supporting role with six other companies as part of our work with Climate Action 100+, a global investor initiative seeking to enhance corporate governance of climate change, curb emissions and strengthen climate-related financial disclosures.
- This past October, I testified before the Senate Committee on Environment and Public Works Subcommittee on Clean Air and Nuclear Safety on the subject of "Reducing Emissions While Driving Economic Growth: Industry-led Initiatives," where I discussed the importance of mitigating the potential effects of climate change on investment returns and outlined how Calvert manages exposure to these risks.
Calvert believes that proxy voting is one of the most direct ways investors can influence companies and industries to move toward more responsible environmental, social and governance (ESG) practices, and an investment firm's proxy-voting record can be a telling indicator of its commitment to engage companies on critical ESG issues. Calvert votes according to our comprehensive proxy-voting guidelines, not just in line with company management, and uses these votes to push companies forward in their climate change disclosures and preparedness. If you're interested in taking a deeper dive into our specific votes, we always have them available on our website in our proxy voting database.
Since this Is Earth Day, it's also worth highlighting that we maintain ongoing dialogue with companies on environmental topics, especially climate change, but also on such issues as water and natural resource use. This year, our areas of focus include encouraging utility companies to adopt more aggressive targets for expanding their renewable energy portfolios and asking banks to consider the risks of climate change in their lending and investments, including the risks to real estate lending in areas that may be significantly impacted by climate change. We're acutely aware that encouraging companies to make material changes that can positively affect the planet takes a year-round effort rather than just one day of action.
Bottom line: Earth Day is an opportune moment to reflect on Calvert's use of its research and engagement teams to uncover and leverage financially material opportunities where a change in a company's ESG approach could help mitigate risk or take advantage of opportunities more effectively. Many asset managers make claims about taking issues into account, but not all of them match their rhetoric with actions.