Green Century Capital Management announced the Eastman Kodak Company has agreed to improve disclosure of its political spending with corporate funds.
Green Century is the investment advisor to the environmentally responsible Green Century Funds. As of December, 31, 2010, Kodak stock constituted 0.02% of the Green Century Equity Fund.
According to Green Century, Kodak agreed to adopt policies that would provide more transparency of its political contributions to trade associations and other tax-exempt organizations. The company also agreed to provide information on the internal controls that govern its political spending. Green Century said the agreement was a result of a dialogue with Kodak in conjunction with the Center for Political Accountability (CPA). Kodak is the 79th company to make such a pledge, according to the CPA.
By law, companies are not required to disclose their corporate treasury-funded political contributions, nor are trade organizations required to disclose the specifics of their political spending to their members. According to Green Century, such secrecy leaves investors, shareholders and even member companies in the dark about a company's political activities.
Further concern has been raised by investors over last year's Supreme Court ruling to ease campaign spending restrictions on corporations, Green Century says. The company says that the 2010 midterm elections saw an unprecedented increase in spending through independent groups, many of which are not required to and did not disclose the sources of their funding
"The Supreme Court decision is expected to open the floodgates to vastly increased corporate political spending, meaning accountability and transparency measures are critically important to protect investors from risk," said Larisa Ruoff, director of shareholder advocacy for Green Century. "As shareholders, we believe comprehensive disclosure of political spending is necessary to ensure corporate funds are not directed toward policy objectives that harm the long-term interests of the company. We are pleased to see Kodak take steps to protect itself from this risk."
Green Century says that while it commends Kodak for its new commitment to improve its disclosure of political spending, the firm will continue to encourage the company to expand its policies and practices.