Taking companies to task on ESG
When Microsoft urges shareholders to reject an activist investor’s proposal, shareholders almost always abide.
So it was a shock when nearly 78% of shareholders at the company’s Nov. 30 annual meeting voted to demand Microsoft’s accountability in responding to sexual harassment complaints, including allegations involving co-founder Bill Gates.
Behind the proposal was Natasha Lamb, co-founder and managing partner of investment firm Arjuna Capital. Lamb spoke with The Associated Press about environmental, social and governance assets, known as ESG.
Were you surprised at how many Microsoft investors supported this?
I was surprised. If you look at the history of Microsoft, there have been very few ESG proposals for one thing and very few high votes. What has changed, other than the story on Bill Gates, is investors expressing concern not just about that, but about years of mismanagement on sexual harassment. We had large firms reach out to us about the proposal.
Was this about Bill Gates or systemic issues?
There’s this reckoning with what’s happening systemically within companies and the culture that’s set from the top. The shift that’s happening from an investor perspective is saying this can no longer be in the shadows. If you’re in Silicon Valley, if you’re anywhere right now, it’s a very competitive labor market. If you are known for a culture of sexual harassment that is not dealt with in a transparent and accountable way, that’s a big ding on your reputation.
What are your most successful campaigns?
Microsoft is probably the most remarkable from a vote standpoint. But we pressed ExxonMobil to publish their first climate change report in 2014. We’ve had a really groundbreaking campaign looking at racial and gender pay equity. We’ve pressed 22 Fortune 500 companies to report on pay gaps and commit to close their pay gaps. We started in Silicon Valley and then went to Wall Street, then branched out into big
retailers.
Who are your clients?
The majority are high-net-worth individuals and families. We also manage money for some institutions, nonprofits. Activism is a big piece of what they’re hiring us for. They care about issues like climate change, social justice and good governance. We’ve worked with a lot of people in the music
and entertainment industry.
How much of your time is on activism?
We get a lot of attention for our activism because we’ve been successful at it. But at the end of the day, we’re just a good investor. I’m a portfolio manager. I manage
our stock strategy. One of the reasons we’ve been so successful on the activist side is because we’re bringing that investor lens. When we engage on issues we’re doing so from the perspective of it being accretive to returns.