The Shareholder Commons

To quote the distinctly not-cool "A Team", "I love it when a plan comes together". When James Hawley, Steve Lydenberg, William Burckart and I started talking about #system-level #investing, we had to explain what it was, why the #capitalmarkets rely on the health of the environmental, social and financial systems, and just about everything. Now, just a decade later, I'm both honored and thrilled to be moderating a plenary panel on system-level investing at #PRIinPerson in Brazil. We'll unpack the opportunities and challenges of integrating systemic #risk into investing programs, and explore real-world examples of investor practices. And I have a top-notch panel to ask: Leanne Clements of People's Partnership, Dr. Takeshi Kimura Special Adviser to the Board of Nippon Life Benefits, Ana R. Giannareas, Partner at Linzor Capital Partners; and Yann Marin of the Network for Greening the Financial System (NGFS). Come see us if you're going to be there. And DM me if you want to meet one-on-one.

The Shareholder Commons is embarking on a new project — developing a framework for system stewardship to establish clearer standards for systems-level practices. Building the framework is an important step towards establishing a community of practice that can move past the alpha-first perspective of the financial industry and other barriers to investment that centers systemic health and resiliency. We're excited to kick off this project with a roundtable at #PRIinPerson in Sao Paulo. We want to hear from investors about the opportunities and challenges they see in #SystemStewardship that accounts for full portfolio impacts, rather than limiting itself to company specific returns. The event will be held at 12:30 on November 6 (lunch included). If you or any of your colleagues are coming to the conference and are interested, sign up for the roundtable here: https://lnkd.in/eJPsAxbv

I have not seen a better case study of the dangers that #AI poses to #investors than this new report from Majority Action. It shows why positive stock market returns for individual companies are masking the long term risks that unchecked AI is creating for pension funds and other institutional investors. It also frames out a path forward for those investors to steward companies away from the irresponsible exploitation AI enables. Here is a quote to get a sense of it, but I recommend reading the entire report: While much has been written about whether the AI hype will yield commensurate financial returns, there has been less discussion in investor circles around the system-level risks posed by AI’s negative externalities. Unbridled AI development is a key driver of system-level risks such as climate change, inequality, and democratic backsliding. . . . AI’s negative externalities aggregate into non-diversifiable system-level risks that depress economic growth, lower market returns, and threaten long-term portfolio performance. To mitigate these risks, universal owners—long-term, diversified investors who have broad ownership over the whole economy—must adopt comprehensive AI guardrails. . . . Investors must act with urgency. . . . In the face of political and regulatory capture, investors are one of the last lines of defense for ensuring that AI development and deployment is undertaken in a safe and trustworthy manner that contributes to shared prosperity, system resilience, and long-term investment returns. Divya Sundar Whitney Shepard Bryant Sewell Tyler Devere Jason Opeña Disterhoft Climate Finance Action Katie S. Sierra Club Foundation Intentional Endowments Network Interfaith Center on Corporate Responsibility (ICCR) https://lnkd.in/egaVywQX

This quote from ShareAction's new #UniversalOwnership report explains why, despite a chorus of resistance from politcally-motivated regulators and legislators, institutional investors need to protect their portfolios from the unsustainable practices of individual companies: [I]nvestors are unlikely to be able to ‘stock pick’ their way out of large-scale economic turbulence – and the emphasis should therefore be on reducing these wider economic risks. Investors should be ‘fighting climate change not just managing climate risk’. In practice, this may mean acting to reduce the negative externalities generated by portfolio companies which contribute to systemic risk, even if this would reduce the value of the company – as doing so would protect the value of the portfolio at large over the longer term. The report should be read by anyone responsible for a long-term, diversified portfolio. Katie S. Catherine Howarth Intentional Endowments Network Interfaith Center on Corporate Responsibility (ICCR) Seventh Generation Interfaith Coalition for Responsible Investing PIRC Limited https://lnkd.in/emaWxbu8

We’re thrilled to announce that Rick Alexander, CEO at The Shareholder Commons, will be joining us at the Intentional Endowments Network Annual Forum on October 27–28 at Goucher College in Baltimore, MD. Rick will share insights on: 👉 system level investing. Don’t miss this opportunity to connect with 100-150 endowment, foundation, and sustainable investing industry leaders! 📅 View the agenda & register: https://lnkd.in/etYNH3SU 💡 Save 20% with code 20_OFF #IENForum2025 #SustainableFinance #ClimateAction #JustTransition

Yesterday's hearing on Capitol Hill underscores the strength of the movement to silence shareholders. This piece illustrates how that perspective is already spreading harm. One recent interpretation from the SEC has, among other things, limited the ability of shareholders to communicate about the risk of human rights violations in supply chains of companies like PepsiCo, The Coca-Cola Company and Mondelēz International. This hurts workers and shareholders alike: Limiting shareholder voice . . . alters the balance of power in capital markets, shifting decision-making from investors to executives and politicians. Investors are losing the power to push back when corporate executives risk the future of the company or the economy to boost profits. And this doesn’t just harm investors. This means our markets will become less effective allocators of capital, as decisions are made by unrestrained executives driven by short-term incentives or politicians swayed by political maneuvering, rather than by a commitment to the integrity of capital markets. Sanford Lewis Brandon Rees James McRitchie Josh Zinner Brad Lander Whitney Shepard Mary Cerulli timothy smith Danielle Fugere Natalia Renta Sara E. Murphy Ann Lipton Elizabeth Pollman