Boston Common Asset Management – Staying the Course, With Adjustments

By Hank Boerner – Chair & Chief Strategist – G&A Institute

Boston Common Asset Management with offices in Boston and San Francisco has been a sustainable and responsible investor since its founding in 2003.  The clients served are endowments, foundations, religious/faith-based groups, pension funds, family offices, and mission-driven organizations.

Part of its mission is to strive to improve corporate behaviors and responsibilities through engagement with corporate boards and executives and being active in proxy season with filing of resolutions, supporting other institutions doing the filing (often through collective actions) and voting practices.   Of course, like other asset managers, Boston Common is challenged as well by the changes brought about by the spreading coronavirus.

The Earth Day message from Lauren Compere, Managing Director of Boston Common included these points:

  • The firm’s focus is on both local and global issues – such as the health and safety of our community, planet and Boston Common’s impact as an active, engaged investor. Even as the impacts of COVID-19 are addressed, the work must go on in addressing systemic risk, especially the climate crisis.
  • Engagements (with companies) have not changed, but the tenor and lens through which public companies are evaluated and act will change.
  • Boston Common feels it is important in the crisis for portfolio companies to prioritize stakeholder well-being and the firm commends those companies that step up to show leadership.
  • At the same time, some companies are being called out – those firms that are price gouging, firing employees who are concerned about their health, and limiting access to much-needed products on the front lines.

What Boston Common is doing:

  • Having direct dialogue with company managements.
  • Working with investor networks and partners.
  • Looking at its own “responsible business” practices.
  • Planning and re thinking its future work.

Some specifics:

Company Engagements — Issues include human rights, eco-efficiency, climate risk. The changed tone is having more empathy, with more personal tone in these engagements.  Company responses are applauded and accountability is discussed – balancing interests of shareholders and stakeholders.

Working in Partnerships and Coalitions — The ICCR is a key partner of Boston Common, which is a signatory of the “ICCR Coronavirus Investment Statement” on workplace and supplier practices, and engagement of pharma companies to coordinate & collaborate on urgent medical needs. Link: http://ga-institute.com/Sustainability-Update/watching-the-watchers-what-investors-esg-raters-are-doing-in-the-virus-crisis/

PRI:  The firm joined the Principles for Responsible Investment (PRI), which has awarded Boston Common an A+ rating for our consecutive years.

Boston Common itself, a B-Corporation, is taking these actions:

  • Continuing to pay composting, cleaners, other contract vendors who rely on the income.
  • Supporting local food banks and social agencies addressing urgent community needs in Boston and San Francisco, contributing to date $26,630 in firm and employee-donated funds.
  • Future Focus” includes a “refresh” of engagement priorities and investor and private sector actions.  A range of societal issues that have been in the spotlight during the crisis must be addressed:  how work is valued; the need for a sustainable living wage; public health risks posed by industrial agriculture and food insecurity; unequal healthcare access and outcomes for low-income and communities of color; corporate tax practices, need for investment in healthcare infrastructure, social safety nets…and more.
  • Boston Common is adjusting the lens through which the firm examines its “asks” of companies and actions, and keeping systemic risk in focus (such as for issues like climate change, digital human rights, environmental protections as EPA rolls back the regs, controversial energy projects.)

Much will change with the virus crisis, MD Lauren Compere points out. “We must ensure that as investors we memorialize the lessons learned in this crisis, empowering companies to manage for the long-term, with a focus on joint recovery and prosperity as the world emerges from lockdown.”

Boston Common has long been a proponent for responsible behavior of corporations and investors and regularly joins with other asset managers in initiatives to drive change.

The issues involved include Amazon de-forestation, climate change and the portfolio risk posed by fossil fuel, urging the Detroit Big 3 (GM, Ford, Fiat-Chrysler) to drop opposition to California’s waiver authority on auto emissions standards, encouraging boards to include more diversity in director choices, and bank financing of controversial projects such as the Dakota Access Pipeline.

About the name:  Many people have visited the beautiful Boston Commons in the middle of this New England city.  The firm’s name comes from the concept of standing at the intersection of the economic and social lives of the community; the “universal commons” is the firm’s shared mission and vision.

Information: https://bostoncommonasset.com/Membership/Apps/Boston_HP_Input_App.aspx