Tap into Your Power as a Shareholder (video)

December 21, 2016

How can your investment choices actually make a difference in the world?

In the past, it usually meant avoiding certain investments, such as tobacco or firearms. But another way is to tap into your power as a shareholder.

As an investor, you have more power than you might think. You can vote at shareholder meetings and file shareholder resolutions—and this can have real results. Investors have persuaded hundreds of companies to make significant improvements in this way.

Some mutual funds do this for you. They’ll engage with companies on your behalf and work to help companies move forward. Funds can amplify your voice and help you make a bigger impact.

How do funds make this happen? FundX President Janet Brown shares some specific examples in her latest video.

Click below to watch.



Many people like the idea of investing in a way that helps them make money while making a positive impact on the world. But they’re understandably skeptical about how can their investments really make a difference. How does it really work? 

One way is through divestment: you can withhold your support of certain companies or industries, like tobacco or gambling.

But divesting is just one way to affect change—and it may not be the most powerful. That’s because when you divest, you lose your voice in how a company operates. You lose your ability to help a company do better.

That’s where shareholder engagement comes in. Instead of avoiding a company, you can invest in it and then use your power as a shareholder to help the company move forward.

Many funds are very active shareholders. They meet with company executives, vote proxies, and file shareholder resolutions. They work to educate the public and bring media attention to important issues.

And this work has paid off. They’ve prompted hundreds of corporations to better address environmental concerns and labor issues. They’ve worked with companies regarding executive pay and diversity on corporate boards.

Engagement is an important way that your investments can help you make an impact, and yet few investors are aware of it.

Full transcript

All investments have impact—whether beneficial or not.

Large investors are key drivers of our economy. Money flows affect company behavior, and active ownership can help address global challenges.

Here’s how we can really be effective investors. We can invest in a way that helps us reach our financial goals and also make the world a better place.

That’s the goal of SRI—sustainable responsible investing—to make money while making a positive impact on our world.

SRI has really changed over the years. 20 years ago it usually meant avoiding certain investments, such as tobacco or companies that supported Apartheid in South Africa for example. Today, there are many funds that divest from fossil fuels.

But divesting is just one way to affect change—and in my view not the most powerful.

That’s because when you divest, you lose your vote.

Shareholders are owners who get a voice in how that company operates. Active shareholders bring important issues to the attention of company management, and often win media attention to help educate the public.

Through shareholder engagement, investors have persuaded hundreds of companies to make significant commitments to our environment- such as reducing emissions or investing in clean energy. There’ve been resolutions asking firms for better disclosure of their political contributions. Social resolutions have addressed equality and labor issues. Investors also filed resolutions questioning companies on their governance practices, such as executive pay and board elections.

Most of us simply don’t have the time or expertise to effectively engage as shareholders. But many mutual fund companies are very active in advocacy. They work on our behalf to engage with a company’s management team to improve policy.

This is one the most powerful ways that funds can make a difference, and it has real results:

Domini fund managers engaged with Target to encourage the company to reduce the use of a toxic plastic in children’s products.

Now Target has a sustainable product standard: it scores 7,000 products based on toxicity.

Another example is Trillium funds, which engaged with Home Depot, one of the world’s largest retailers of old-growth lumber at the time. Home Depot agreed to use more sustainably sourced wood, and now Home Depot has sold more certified wood than any other company in North America.

Calvert funds prioritized engagement with electric utilities and 53 major corporations have committed to source 100% of their power from renewable energy in the next two decades.

These are very tangible benefits!

Much about investing is about us, about our goals and dreams. We want to be sure we’ve got enough money for retirement. But most of us also care about other people and want our environment to be sustained.

Sustainable funds can help us do just that.

If you’d like help getting started with impact investing, give us a call.

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Jules Tannen January 6, 2017 at 9:26 am

I do not use funds do you have a set up just using ETF? if so please advise so I could sign up Thanks.

noloadfundx January 10, 2017 at 9:24 am

NoLoad FundX includes both mutual and exchange-traded funds (ETFs). We’ve found that it’s best to use both funds and ETFs because ETFs aren’t always the best performers, but you can certainly use the newsletter to focus on ETFs only. Our online database allows you to look at only ETFs (or to exclude ETFs and look only at funds).

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