Where Have You Invested your Money?
“There’s a hundred million people with $10 trillion of assets in 401(k) and 403(b) plans and basically nobody has a clue what they’re invested in. You’d be shocked to find your money is supporting things like fossil fuels, deforestation, weapons, private prisons…”
You can look up where your retirement money is invested in for free at InvestYourValues.org
Interview with Andrew Behar CEO of As You Sow a nonprofit that works reclaim everyday people’s voice as shareholders, to align their investments with their values, and to leverage their collective power to promote positive change in companies.
They got Dunkin’ Donuts, McDonald’s, and Starbucks to stop using styrofoam. That’s 3 billion styrofoam cups that were not produced every single year. Or replacing 5 Exxon board members that weren’t doing proper oversight. It’s results like that which made them a finalist for the TBLI Group Better World Prize.
Podcast Transcript
Jacob: [00:00:00] I’m here with Andrew Behar with As You Sow, and would love to have you introduce yourself.
Andrew: Happy to. Yeah. My name is Andrew Behar. I’m the CEO of a nonprofit, called As You Sow. We’re in our 31st year. We focus on shareholder advocacy, and so we address corporations and corporate responsibility through the lens of shareholders.
Jacob: And part of what brought us to this moment right now is I want to give you congratulations for being one of the winners of the Better World Prize.
Tell us about that and what that means to you and your organization.
Andrew: So the Better World Prize, we put together a short video about the work that As You Sow does, and it was viewed by many thousands of people who voted. And we were very thrilled to have won a prize. And I think the reason that people resonated with our work is because our theory of change really looks at corporate power, and that when a corporation changes just one of their policies or practices.. [00:01:00] It ripples through their entire supply chain, through all their customers, through their employees. For instance, Amazon stopping the use of plastic packaging and going to totally recyclable and recycled content in their packaging, it has a massive impact.
When we got Dunkin’ Donuts, McDonald’s, and Starbucks to stop using styrofoam. That’s 3 billion styrofoam cups that are not produced every single year, which also has an impact on the demand for fossil fuel feedstocks that make the styrofoam. So the ripples are just massive through one decision, which ultimately is really good for the company, for their employees, for their stakeholders.
Jacob: How does that actually work in practice? Because it feels like that could be a Herculean task to try to mobilize so many people. Like how do you actually go about doing that?
Andrew: So we start with research. We put out about 10 original research reports. In fact, we just yesterday released a report that links diversity in [00:02:00] the workforce to outperformance on eight key financial metrics. So we start with the research, then we sit down with the companies and we say, look, the research shows that if you have a more diverse workforce, the company’s gonna outperform its competitors. If you have racial justice, if you reduce your climate risk, if you stop using pesticides, you’re going to get a bigger piece of the business. You’re gonna be doing good for your employees, for your customers, for your shareholders. And so the folks inside the companies, they look at that and go, yeah, this makes sense.
They do their own analysis and then most of them just agree to then make changes because we have presented a really cogent business plan. Sometimes they don’t. And in that case, we escalate by filing what’s called a shareholder resolution. It’s a 500-word document that a shareholder can file six months in advance of the annual meeting. And it starts a conversation. It means that all the shareholders get to vote at the annual meeting. And once they vote, we continue the conversation with the company.
So in 2023, we [00:03:00] had 210 what we call engagements. Those are sit-downs with companies to show them basically a better business plan. Of those 99 companies said, this is great. 111 didn’t, so we filed shareholder resolutions. Once we did that, the company said maybe it is a good idea, and we withdrew the resolution. So 70% of the companies we sat down with took action. The other ones went to a vote, and after the vote, which was non-binding, we then sat down with them again, and eventually, they came to realize that our business plan was actually advantageous to all the stakeholders.
And so almost all of them eventually understand what we’re asking, and shareholders we have rights. Ultimately the board reports to us if they’re gonna do proper oversight and try to outperform the competition. They’re gonna listen to us because ultimately we have final say. What we’re presenting is in their self-interest, that is the key. We’ve done the deep research, we showed them a business plan where, like the example yesterday we presented this data set. We [00:04:00] looked at 6,000 EEO one reports. EEO one reports are equal employment opportunity reports.
Every company does one for the government. So they’re doing the research anyway, but they rarely disclose them to their shareholders. So we spent several years saying, we need these to be disclosed, this is material information. We can use this information to make a buy or sell decision. So they’re required by the SEC to disclose this.
So we looked at 6,000 of them. It’s over a million and a half data points, and what we saw was very clear: the statistical significance, a correlation of companies that had greater diversity in their management teams outperformed. And we’re talking about significant measures like stock price over 10 years, return on investment, return on equity, return on capital. Like those are the metrics that investors really care about.
So this report showed again, greater diversity in the management team, greater outperformance. And when you show that to a company, they go, oh, okay this makes sense, [00:05:00] we need more diversity in our, workforce, in our management teams, and that will help them to make a decision so that they can become outperforming, which is what the shareholders are asking. Serves the company, serves the shareholders, serves their employees, creates a culture that attracts the best and the brightest. So all it’s just a win-win-win once we get the vote.
Then we sit down with the company and say, look. 40% of the shareholders think this is a good idea. And the board would say all right let’s run a pilot. Because if they don’t, then they’re not doing proper oversight. And if the company has a board that’s not doing proper oversight, then we escalate to the next level, which is well, we’re gonna have to replace the board because they’re not doing their job.
Jacob: Have you had situations where you’ve taken it that far?
Andrew: Absolutely. The best-known one is in 2021 a group of shareholders got together and put five new people on the Exxon board. This is after the company had been losing money for 12 years, and had absolutely no capital discipline. And since the day that that new board took [00:06:00] power, the company has just taken off. So the company was able to actually change its trajectory because shareholders intervened
Jacob: How do you make decisions on what things to promote and to chase, because you could really spread yourself too thin? There’s so many different initiatives with so many different companies. How do you pick your battles wisely?
Andrew: So we’re broken into six different program areas. So there’s climate and energy. That’s a fairly large one because climate change has an impact on every company. If you’re looking at the entire marketplace, you’ve got a handful of companies who are doing intense amounts of damage that are affecting the ability of every other company to be profitable. They’re affecting the supply chain of any company in the food industry and the apparel industry all are having supply chain problems now because of climate change.
We have a group that works on specifically what we call a circular economy. And so that really leads to ocean plastics. So if the use of plastics and the fact that they’re mostly dumped in [00:07:00] the ocean. Trying to stop the flow of plastics into the ocean, but also we work in that area on the right to repair electronics, a lot of electronics end up in landfills and there’s a lot of toxic material in them that leaches into the water supply.
We work on the food system, so we’re working on pesticide reduction, regenerative agriculture. Most people aren’t aware that if you use regenerative agriculture on a per acre basis, you get higher output; the farmer makes more money; you don’t toxify the land; you have greater biodiversity; you sequester carbon and you hold water. It’s just a complete win-win. So getting the farmers to change and getting the big food companies to only buy from farmers who are growing in a regenerative way.
On the social side, we have a group working on diversity, equity, inclusion, and racial justice and executive compensation, so wage justice. So those are really the main areas we focus on.
And then we also have a group that looks at just helping people align their [00:08:00] investing with their values. Most people are invested in mutual funds and they’re kind of a mystery. Nobody knows exactly what’s inside of it, so we break it down. We have 6,000 mutual funds on our platform called Invest Your Values. And what it does is it helps people to understand what’s inside a mutual fund. For instance, if you have a Russell 1000 Fund, you may not know what is inside of it, but you are owning huge amounts of fossil fuels, deforestation, weapons, and private prisons.
And so we also aggregate those up for people’s 401k and 4 0 3 B plans, their retirement plans because you got a hundred million people with $10 trillion of assets and basically nobody has a clue what they’re invested in. It’s actually pretty remarkable. And when most people discover, oh my gosh, why am I invested in burning down the Amazon rainforest? Why am I profiting from private prisons? They say, I don’t want that, and it’s very well hidden. so our platform Invest Your Values is a place that they can go to really understand [00:09:00] how to align their investing with their values.
Jacob: And is that something that’s free to an average consumer to access?
Andrew: Yeah, just go to InvestYourValues.org. It’s free. You can type in any mutual fund. It’ll tell you what’s going on. We have about 45 company plans. So you could click on the Amazon 401k plan, or the Microsoft we have we’re gonna be doing more companies this year, we’ll probably be up to about 80 by the end of the year, so you can really understand How am I invested? Am I capitalizing a future that is a livable planet?
Because the thing is, most people, you take 4% or 5% of every paycheck and you put it away, in your nest egg, but it’s being invested in companies that are gonna make sure there’s not a livable planet by the time you retire.
People are not aware of this. And also they give up their right to vote. Like they hand off their proxy vote. When you earn the money, you should have the power to invest, align with your values, and you should have the power to express yourself through your vote.
Jacob: [00:10:00] What’s the business model?
Andrew: We’re a 5 0 1 C3, so we are funded about 75% by foundation grants. We write probably 50 or 60 foundation grant applications every year. And then the other 25% is individuals who again, resonate with our theory of change and make donations to us.
Jacob: What’s the biggest hurdle you’re facing right now?
Andrew: I would say we’ve had a great deal of success. And so what’s happened is there’s a group of very regressive thinking folks who funded $1.6 billion to a guy named Leonard Leo. He’s the guy who gave us the Federalist Society. They have been launching this anti ESG campaign that’s very directed at us and very directed at the shareholder advocacy community.
They’re seeing that the extractive economy is winding down and they’re trying to do everything they can to slow that process. They’re doing it through very ham-fisted, aggressive tactics like state [00:11:00] legislatures passing laws that say you cannot invest sustainably, you cannot look at risk. This is essentially what it is, this massive campaign across all of the red states, to say, don’t look at risk. It’s like that movie Don’t Look Up. Don’t look at climate change, don’t look at racial justice and frankly, an investor who isn’t looking at risk is not doing their fiduciary duty. A manager in a business who’s not looking at risk is going to fail. And what we say is actually, it’s not only your duty to look at risk, it’s your right to look at any data you want. And they’re saying No Restrict you only can look at it through our lens. So it’s a failed effort, it’s created a lot of disturbance in this market transition that’s underway.
Jacob: What is it that you’re most looking for right now?
What sort of things can the community help connect you with?
Andrew: We’re always looking for folks to read our reports, to understand our theory of change, to get into our [00:12:00] orbit, to start to get our newsletters and understand our work. And then to become donors is wonderful. We’re also looking for people to literally look in a mirror and see an empowered person and realize you earn the money, you get to decide how it’s invested. You get to capitalize on the future of a livable planet. You earn the money, you get to express yourself through your proxy vote. If every person who had a 401k plan said, I wanna invest aligned with sustainability and justice. I wanna vote for my proxies. And they told their 401k administrator, the 401k administrator would have to deliver that.
It would change the entire power structure. It would change the way that companies respond because you own the company. The board reports to you. People don’t realize that. I’m gonna say it one more time. Look in a mirror and realize the board of every public company reports to you. If you own shares directly, go to AsYouVote.org most [00:13:00] people, own 50 shares of Apple, a hundred shares of this and that, and they’re getting proxy statements into their inbox and they probably open ’em up and go, oh my gosh, I don’t know who’s on the board. I don’t know what these resolutions are. With one click, you can have us vote as you vote policy on your behalf. You can set it and forget it, and you’ll be voting, you’ll be expressing yourself, through this policy, and we will lay out the policy very, very clearly.
We vote against 80% of the CEO pay packages. CEOs are being overpaid. We vote against the board 70% of the time. We vote for almost all the shareholder resolutions. And we make sure that the companies are held to account for what they do. It’s really about people realizing that they have so much more power than they even had any idea. And we’re trying to teach people how to use that power.
Jacob: If someone was interested in learning more or being involved, how do they find you?
Andrew: Probably through our website As You Sow, which is S O W.org.
Jacob: What hope do [00:14:00] you see on the horizon?
Andrew: Well, I’m incredibly optimistic because more and more we’re seeing people actually . Realizing they have the power and starting to take their power. We’re seeing 99% of millennials want to invest in and vote for a sustainable world. Click your heels together. Dorothy, you’re there. It’s your power. All you gotta do is ask for it, because when you tell your 401k administrator, I am not happy investing in this extractive economy. They’re gonna have to make a change. I think you can organize a movement of people who actually want to have a livable planet.
Jacob: I applaud your efforts. Congratulations on The Better World Prize win and keep up the good work and we hope to be better advocates for the work you’re doing in the world. Thank you so much.
Andrew: Great. Thank you.
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