The Shareholder Commons applies a systems approach to corporate purpose and social responsibility.
The Shareholder Commons applies a systems approach to diversified portfolio value maximization.
TSC believes that in a free-market system, investors must promote minimum standards among their portfolio companies, so as to preserve essential social and environmental systems that undergird diversified portfolios.TSC promotes system stewardship through four interrelated initiatives: public advocacy, engaging investors, policies, and litigation.
We seek to ground public discussion of the relationship between investing and systemic impact in a rational economic model. We begin with the recognition that corporations’ ability to aggregate capital and participate in free-market competition has delivered significant material wealth, improving the standard of living for billions of people. At the same time, market competition fueled by companies that prioritize their own profits over all else is responsible for some of contemporary society’s greatest challenges, from climate change to growing inequality.
The Shareholder Commons believes investors and the financial system must start with an economic model that recognizes the need for investors and businesses to account for all the costs of company decisions, even if those costs don’t affect a company’s profits.
Read more about our advocacy on our blog.
Diversified investors hold trillions of dollars in capital and their success depends upon markets that thrive well into the future. Investors’ returns are driven by the systemic impacts generated by the entities in which they invest. They can preserve these systems by using their unique perspective and power to require companies to meet baseline sustainability standards—guardrails—and to reject practices that generate external social or environmental costs for company gain.
Adherence to these guardrails will lead to a base level of corporate responsibility. For example, diversified investors might benefit financially from systemic improvements if the companies in which they invest meet a science-based target for carbon reduction and certify as to certain equitable practices in their supply chain, even if meeting such standards will not maximize the enterprise value of some of those companies. Read more about how we work with investors here.
Laws and regulations that protect investors are often designed or interpreted as if investors in a company had no interests beyond that single company. Yet most investors have diversified portfolios that are affected more by systemic costs than by the financial returns of individual companies.
Such rules carefully account for a company’s financial profit but ignore any costs imposed on our environmental and social systems, encouraging companies to disguise irresponsible business conduct as value creation.
TSC seeks to transform the system by advancing policies that mandate that executives, investors, and other stakeholders account for the effects their decisions have on common resources. Read more about how TSC engages with policymakers and thought leaders here.
The decisions of trustees, asset managers, and corporate directors can be influenced significantly through litigation brought by shareholders and beneficiaries. But the legal system that oversees these fiduciaries often operates on the assumption that investors benefit when corporate executives simply maximize the value of their companies, with no regard to external costs.
TSC initiates impact litigation to challenge this assumption. We also serve as a voice for diversified investors (via amicus briefings) in litigation regarding investor protections.
Together, we're embarking on a fundamental transformation of our financial system...