John Streur leads one of the oldest firms devoted to socially responsible investing. He’s heard the drumbeat for investors to sell gun stocks following last month’s shooting at a Florida high school that left 17 people dead.
But after years of advocating for aligning investor portfolios with their values, the chief executive officer of Calvert Research & Management has come to a sobering conclusion: divesting gun makers is a flawed strategy. More funds than ever shun the companies yet school shootings have only increased.
“This isn’t working -- it hasn’t solved the problem,” said Streur, whose Washington-based firm, now a part of Eaton Vance Corp., manages more than $11 billion. Instead, he favors addressing gun safety through engagement with companies beyond the firearms industry, such as technology giants.
The Parkland, Florida, tragedy brings into focus a question that has long vexed investors interested in effecting change: What’s the best way to get results? Some sell stock and walk away while others stay invested with the goal of getting companies to alter their ways.
Streur isn’t the only one who has concluded that engagement is the better route.
“If you sell your shares, you are giving up any modicum of influence you may have,” said Michael Rosen, chief investment officer of Santa Monica, California-based Angeles Investment Advisors, which helps oversee about $28 billion mainly from endowments and foundations.
Interfaith Effort
There’s evidence engagement can pay off. Several religious orders affiliated with the Interfaith Center on Corporate Responsibility bought stakes in Dick’s Sporting Goods Inc. for the purpose of pressuring the retailer to adopt and report on gun-safety standards.
The investors withdrew their Dick’s proposal last month after productive talks with the company, said Susana McDermott, a spokeswoman for the Interfaith Center. On Feb. 28, Dick’s said it would extend a ban on selling assault rifles to its Field & Stream stores and require gun buyers to be at least 21.
Calvert owns shares in the largest U.S. supermarket chain, Kroger Co., which sells guns at its Fred Meyer locations. After meeting with Calvert executives, Streur says, Kroger said it too would stop selling arms and ammunition to anyone under 21.
Shifts like that one are why Streur now sees shedding stocks as a last resort.