The Shareholder Commons applies a PRE-COMPETITIVE systems approach to corporate purpose and social responsibility.

While today’s ESG (“environmental, social and governance”) initiatives focus on improving individual companies,  we believe that in a free market system, investors and companies must work collectively to establish universally applicable minimum standards in order to preserve essential social and environmental systems.

Our Strategy

Public advocacy

The Shareholder Commons will advocate for an economic system where companies are expected to forgo profits made from the exploitation of vulnerable communities and depleting common resources, and instead focus on profits from innovative value creation.

Leveling the playing field

The Shareholders Commons seeks to catalyze a movement of universal owners to identify and implement minimum acceptable standards of corporate conduct that all businesses must meet before pursuing profit.

Policy

The Shareholder Commons will develop and advocate for public policies that accommodate the needs of universal owners.

Litigation 

Speaking on behalf of the universal owner in the courts, The Shareholder Commons will use litigation to further systems change and stop rewarding irresponsible companies with high margins and cheap capital.

opportunities for engagement

INVESTORS

Investors are trapped in a system where success is measured by alpha, but the race to outperform and lower fees is threatening the systems all companies and beneficiaries rely on. Read here to find a better path.

POLICY MAKERS

As long as private capital chases relative return with no regard for systemic effects, direct policies to rein in business exploitation of common resources will be locked in a struggle against regulatory capture evolving technologies and tactics. Read here to learn about policies that reset the way private capital operates, in order to harmonize public and private goals.

COMPANIES

While businesses are frequently demonized in discussions about social and environmental issues, corporate attempts to manage impacts are often hampered by shareholder pressure to prioritize financial interests. To learn how you can be part of a movement where shareholders encourage authentic corporate commitment to stakeholders, read here.

LAWYERS

Unfortunately, the law and perceptions of the law can lead to corporate and investor behaviors that undercut attempts to address systemic issues through improved business conduct. Members of the legal community with an interest in helping to change this dynamic should read here.

POLICIES

The laws that govern corporate executives and institutional investors who control much of our economy encourage or even require them to prioritize profit over preservation of critical social and environmental systems.  We are working to change those policies.

guardrails

We will work with investors to create pre-competitive guardrails that allow companies to compete sustainably on a level playing field, where irresponsible business practices are not an option. We have constructed a provisional set of guardrails that are meant to be illustrative of the type of safeguards investors are likely to seek.

beta stewardship

Pension funds and other asset owners must preserve their capital and earn sufficient return to satisfy obligations to retirees and other liabilities. Asset managers must help investors optimize their returns based on an acceptable level of risk. For owners and managers alike, returns are the result of three variables: 

 

  1. The return of the market overall to the classes of securities within a portfolio (beta);
  2. The performance of the portfolio above or below beta based on the securities selected to be in the portfolio (alpha); and
  3. Asset management costs and fees. 

 

Historically, asset owners and managers have focused on the second and third components and accepted beta as a factor over which they did not have control and for which they had no responsibility. The increasing recognition that the social and environmental systems upon which the global economy depends are at risk from corporate behavior demonstrates the deep flaw in that thinking—corporate behavior with respect to social and environmental systems affects the economy as a whole, and overall economic performance is a critical determinant of beta.  

 

Moreover, shareholder activism in other areas demonstrates that shareholders can indeed affect corporate behavior. Thus, if shareholders can analyze the potential effects of their votes on corporate behaviors that affect the economy, they can—for the price of exercising a vote—make reasonable attempts to improve a critical facet of return. 

Resources

Together, we're embarking on a fundamental transformation of our financial system...