Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

February 12, 2007

Who’s responsible for corporate social responsibility?

Proxy season is here, and time is ripe for foundations to be more active shareholders.

In recent years, a small but growing number of foundations have joined the ranks of activist shareholders to push companies to adopt more socially responsible corporate policies.

That activism has produced results: Wal-Mart Stores, for example, has agreed to report on its social-responsibility practices.

And as the Wall Street Journal reported Jan. 31, citing proxy advisory firm Institutional Shareholder Services, activists are pushing for similar disclosure from 37 firms, up from 20 last year.

Yet most foundations seem content to hang back as passive investors.

In response to the recent Los Angeles Times report that its investments conflict with causes it supports, for example, the $30 billion-asset Bill & Melinda Gates Foundation issued a statement saying it could best advance those causes through its grantmaking, not its investments.

But foundations, with over half a trillion dollars in combined assets, have a lot of clout, and can use it to work with companies to adopt policies that advance critical causes like protecting human rights and reducing global warming.

To truly make a difference, foundations must take responsibility for the policies of the companies in which they invest.

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