The Shareholder Commons

TSC’s activism involves a combination of shareholder proposals to influence companies and advocacy with regulators and policymakers to influence laws. ²

TSC was founded by Frederick Alexander, a corporate lawyer who also previously worked for B Lab, a non-profit that pressures businesses to adopt more left-leaning practices and viewpoints. ³

ESG Shareholder Activism

TSC’s shareholder activism aims to address what it calls a “prisoners dilemma” in which companies decline to pursue left-progressive ESG practices out of fear that adopting such practices would diminish their competitiveness. ⁴ It seeks to “level the playing field for sustainable businesses” by increasing pressure on all companies to adopt left-progressive practices. ⁵

TSC has backed a series of shareholder proposals to have companies such as BlackRock, Bank of America, Goldman Sachs, Facebook, and Amazon restructure themselves as “public benefit corporations,” which would purportedly allow them to prioritize societal benefits over the interests of their shareholders, “even when it means surrendering total financial return at an individual company.” ⁶

Critics called the effort “woke capitalism at its logical terminus: shareholders submitting proposals against those shareholders’ own financial interests.” ⁷

TSC has also pressured restaurant owners such as McDonald’s Corporation and Yum! Brands to disclose the “systemic costs” of antibiotic use on society. ⁸ The activism was successful in convincing Yum! Brands to become the first public company to publicly disclose its antibiotic use in its supply chain and to publish a report on how those uses may impact society. ⁹

Public Policy Advocacy

In September 2020, TSC and B Lab released a policy white paper, From Shareholder Primacy to Stakeholder Capitalism: A Policy Agenda for Systems Change. A blog post written by TSC about the report criticized companies for focusing on “the financial value they delivered to their own shareholders while burdening our economy with disease, climate change and racial injustice.” ¹

The paper advocates for public policy reforms that include changes to the fiduciary rules governing the financial sector that would require institutional investors to adhere to ESG principles. It also proposes a federal requirement that all corporations involved in interstate commerce be formed under state statutes that requires them to account for the impact of corporate actions “not only on financial returns, but also on the viability of the social, natural, and political systems that affect all stakeholders.” ¹⁰

In August 2020, TSC also called on the U.S. Department of Labor to withdraw a Trump administration rule titled “Financial Factors in Selecting Plan Investments,” which TSC claimed prevented pension funds and retirement plans from incorporating ESG factors into their investment decisions. ¹¹