In the United States, political polarization has checked efforts to enact even modest federal climate change legislation for decades. Out of frustration, one might even say desperation, some activists have looked to the world of private investing and major corporations—yes, even oil companies—to press a climate change agenda. And those efforts have been somewhat successful. On the one hand, there are now reasonably large investment funds that, through their investment criteria, in effect take resources away from companies that have poor environmental track records and reward those who have better records. On the other hand, activists have also purchased stock in some of the major polluters and used their status as shareholders to push shareholder resolutions and fight for seats as outside members of the boards of directors. Remarkably, a third activist was just elected to the Exxon board.
This strategy should now be extended to the fight to preserve democracy in the United States. All across the United States, Republican majorities in state legislatures are pushing to restrict ballot access, and even to politicize (in their partisan favor) how disputes over the outcomes of close elections will be resolved. Distinguished political scientists see the United States as being on the verge of slipping from a flawed but real democracy to a nation where power will reside in an essentially anti-democratic (small d), even authoritarian party, regardless of what the majority of Americans think and desire. Of course, the Biden administration and the Democratic leadership in Congress are trying to enact federal legislation that would override anti-democratic legislation at the state level. But the odds of such legislation actually being enacted are slipping by the day. And if it is not enacted soon, state-level restrictions on ballot access and state-level gerrymandering could ensure Republican control of Congress as a minority party for years to come.
So far, corporations have been relatively quiet about the fact that the United States, at the hand of one of two major political parties, may be on the verge of losing its democratic system of government. It is true that Delta and Coca-Cola expressed their disappointment over Georgia’s adoption of an anti–voting rights law, and Major League Baseball went further, moving its All-Star Game out of Georgia. But there continues to be relative silence from major corporations around voting rights, even as bills restricting voting edge toward passage in dozens of states. That quiet is explicable. Big business and the Republican Party have had a long, close relationship, and the majority of CEOs probably are (or until recently, were) Republicans. More to the point, CEOs care about making money, and especially their companies’ short-term profitability and stock performance, and so it makes sense for them to try to avoid alienating Republican leaders in Mar-a-Lago, Congress, and the state legislatures.
Which is why corporations must be pushed to take a stand. Both through “democratically responsible” investment funds and shareholder activism, investors can push corporations to state loudly for all to hear which voting measures they approve and which they denounce. Investors could push for corporations to issue “democracy” impact statements, which would detail the corporations’ political contributions, relevant lobbying efforts, and other measures that affect the fight for preserving democracy in the United States. Investors might push corporations to commit not to make direct or indirect campaign contributions to any politician or state party that supports anti–voting rights legislation, or federal candidates who oppose measures that would protect democracy such as the John Lewis Voting Rights Act. Admittedly, determining which investor demands on corporations would be productive in terms of the fight for democracy is not straightforward or obvious. But that is all the more reason why the effort to make those determinations needs to begin right now.
As have sustainability-oriented investments funds, voting-oriented funds could establish specific criteria regarding when they will invest in and when they will divest from corporations. On Friday, Attorney General Merrick Garland promised his Department of Justice would be publishing new “guidance” on the civil and criminal statutes that apply to postelection audits, early voting, voting by mail, and discriminatory gerrymandering. Perhaps these democracy funds could follow the DOJ’s guidance for its own criteria. The funds could even publish an annual “democracy index” for major corporations based on their pro- or anti-voting-rights records. Corporations that do not provide the necessary data would be omitted from the index, which would provide corporations a reason to be far more open than they otherwise would want to be. Shareholder activists could push for the adoption of corporate resolutions not to sponsor or participate in public events and programs that are in political jurisdictions where voting rights have been restricted. Coca-Cola, for example, is a major sponsor of NASCAR events. Activists could propose a resolution that Coca-Cola withdraw its support from any NASCAR events in states that have adopted restrictions on voting access. Shareholder activists also could push for resolutions to reduce corporate investments in and relocate facilities—even headquarters—out of states where voting rights have been gutted. In the climate context, corporate managers have almost always tried to fend off adoption of such resolutions by meeting the shareholder activists at least part way—by taking somewhat stronger, more visible stances. That is exactly the sort of “compromise” dynamic that is at a minimum needed on questions of protecting America’s democracy.
Investing for voting rights will not by itself secure democracy in the United States, just as investing for environmental sustainability will not by itself protect the planet from the ravages of climate change. But both with respect to climate change and democracy, the stakes are too high not to use every possible tool. The time has come for organized, energetic investing for voting rights.