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Shareholder Activism to the Rescue!

Shannon Arvizu | Monday December 17th, 2007 | 1 Comment

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Shareholder activism is a primary reason why several large companies are eliminating harmful toxins from their plastic products. In a recent investigative series launched by the Milwaukee Journal Sentinel, reporters found that lax governmental regulation of Bisphenol-A and PVC plastic has led to their proliferation in a wide range on consumer products – including baby bottles and toys. In the last two years, however, shareholders have launched and won a record number of resolutions to get corporations to remove these toxins from their products.


It appears that shareholder activism may be a more effective form of corporate regulation than federal law. The first Journal Sentinal report found that, “U.S. regulators promised a decade ago to screen more than 15,000 chemicals for their effects on the endocrine system. As yet, not a single screen has been done.” A second report showed that the federal government’s assurances that such chemicals are safe are “based on outdated U.S. government studies and research heavily funded by the chemical industry.” Shareholder activism, in contrast, can be credited for the recent decisions of companies like Target, Bed, Bath, & Beyond, and Apple for reducing chemical toxins in their products.
So how can a company respond to shareholder demands to make safer products? What is the best way to mitigate the financial risks and increase opportunities to benefit from the reduction of toxic chemicals in plastics? I highly recommend this short video produced by the Investor Environmental Health Network. In it, you learn how big companies based in different regions of the globe have enhanced their social and environmental performance as a result of shareholder pressure.
I highly applaud the efforts of organizations like As You Sow, the Investor Environmental Health Network, and RiskMetrics for bringing institutional investor attention to the delinquent acts of corporations that continue to use such chemicals in their products. We assume that if a product is on the shelf, it must be safe. We assume that federal legislation to regulate the use of such chemicals is stringent. On both counts, our assumptions are wrong. Shareholder activism is the new face of public accountability for market wrong-doing and such influence can be expected to continue.


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  • Anonymous

    It’s not the shareholder’s that should be shaping the decisions of a comapny, besides the shareholder’s are only looking out for their investment, at whatever cost.
    Just because the trend is currently a “GREEN” one; it does not mean that shareholders are the solution to irresponsible and polluting business practices. Especially when the only thing that shareholders see is the green in the dollar they recieve for their investment.
    Rather, these articles would be far more valuable, thorough, and worth reading if they hit the bottom line of the topics discussed here. Is it not obvious that the consumer, the average ‘Jack and Jill,’ are the ultimate source of “green” activism and implementation???? For as long as I can remember, supply is driven by demand, and I know of very few companies that exist for anything but profit in their bottom line and that or their shareholders.