Investing leader takes on the gun industry
John Streur remembers exactly where he was when he learned of the shooting at Marjory Stoneman Douglas High School in Parkland, Fla.
The CEO of Calvert Research & Management recalled standing in New York’s Pennsylvania Station on the afternoon of Feb. 14, squinting at his iPhone in disbelief as he read that 17 teenagers and teachers had been shot dead. As chief of one of the world’s biggest responsible investing mutual funds, Streur was an activist on issues including climate change and equality, yet he said he felt powerless when it came to gun violence. Now he wanted to see if he could use Calvert’s financial clout to change the way guns — most notably the AR-15 military-style assault rifle used in the massacre and weapons like it — were sold in the United States.
Two weeks after the shooting, he told his assistant: “Get Kroger on the phone.” But the management at Kroger, one of the nation’s largest grocerystore chains, was gearing up for an earnings release and wasn’t taking investor calls.
“I told her to call them back and tell them I don’t want to talk about earnings. I want to talk about gun sales,” Streur recalled. (Kroger sold guns in 43 of its 133 Fred Meyer stores in Idaho, Oregon, Washington and Alaska, with the latter state selling the military-style assault rifle.)
Calvert, which was acquired
by Eaton Vance in 2016, has roughly $14 billion in assets and owns $2.6 million worth of Kroger shares. Streur wanted management to know “if they weren’t going to stop selling guns to kids,” he would file a resolution to take it to a shareholder vote.
The morning after his call, Kroger said it would stop selling guns to those under 21. Two weeks later, the chain said its stores would stop selling firearms altogether, citing a slump in gun sales.
“When it comes to mass shootings, I think American society feels helpless about what can possibly be done to try and change the equation,” Streur said in a recent phone interview from Washington, where he lives. “To have the capital markets be part of a solution is meaningful. It is responsible investing at its best,” he said. (Kristal Howard, a Kroger spokeswoman, said that while the company welcomed dialogue from stakeholders, “it wouldn’t be accurate to credit this policy shift” solely to Streur’s phone call.)
Streur, 58, has long been a leader in what’s called environmental, social and governance investing, starting in a boutique money management firm in 1991. But lately, his profile on Wall Street and beyond has been raised by the gun debate. After recent mass shootings, questions have been asked about what role investors might play in forcing companies to ask themselves whether they are complicit in gun violence, and whether businesses, banks or firearm retailers should set rules limiting gun sales or lending to gun manufacturers.
Streur has been at the forefront of this discourse, taking America’s gunfight to the front lines of finance. Since the Parkland shootings, he has spoken about the importance of responsible investing on a panel in New York, at the Milken Institute annual conference in Los Angeles and at global investing conferences in Berlin and Melbourne, Australia.
But Streur is not a newcomer to this cause.
“I was a lone wolf for a long time,” Streur said. “A lot of mainstream investors thought this was too radical, too political, too crazy.”
After graduating from the University of Wisconsin, Streur joined Lehman Bros. But the fiercely competitive, profit-hungry finance world was an uncomfortable fit, and he said he was quickly disillusioned by what he called “greedy” banking culture.
In August 1990, Streur left Wall Street to become a partner in a small money management firm, the Burridge Group, in Chicago. It was there that Streur was first exposed to the idea of responsible investing when his clients asked if he could divest their money from “unsavory” companies, like those involved in tobacco, gambling or guns. Streur rose to become the president of Burridge, where he worked on divestment drives for 17 years.
During this time, Streur became increasingly frustrated by the limited impact of socially responsible investing. He went door-to-door on Wall Street trying to convince some of the titans of investment banking that responsible investing matters and should be woven into their business strategies, but faced repeated rejection, he said. In 2007, he said, his own research showed that fewer than 15 responsible investing companies with more than $1 billion in assets were operating in the United States at the time.
A year later, Lehman Bros. went bankrupt, triggering the global financial crisis of 2008. This proved to Streur that “the financial system itself didn’t know what it was doing.” He resigned from Burridge Group, now known as AMG Funds, to devote himself completely to socially responsible investing.
Until recently, corporate America was still questioning whether responsible investing could work: Did it hurt profits? Did anyone really care?
“Those questions were valid six years ago,” Streur said. “But no one asks them anymore.”
He has watched responsible investing move from the margins to the mainstream.
In the United States, responsibly invested assets have been on an upward march since the mid-2000s, climbing to $8.7 trillion in 2016 from $6.6 trillion in 2014, according to the latest Global Sustainable Investment Alliance Review.
The Sustainability Accounting Standards Board, established in 2011, is pushing for a new “social and environmental” measure to be included in the annual reports publicly traded companies must submit to the government each year. And in January, Laurence Fink, chief executive of BlackRock, the largest asset manager in the world, said if businesses wanted his firm’s support, they must make a positive contribution to the world because “society is demanding” it.
Streur says he is determined to maintain pressure on assault weapon manufacturers, wanting to provoke a sea change on guns before eventually returning to his ranch.
“I believe we are going to reduce the distribution of assault weapons and I believe we are going to make it more difficult for those companies to get capital,” Streur said. The fight, he added, “is by no means over.”