A coalition of activist investors has filed 40 shareholder proposals that ask U.S. companies to disclose their direct and indirect lobbying expenses.

This campaign is led by the American Federation of State, County, and Municipal Employees (AFSCME) and Walden Asset Management. AFSCME filed a handful of proposals on this topic last year; four of those resolutions received more than 25 percent support. 

“Over the last five years, investors increasingly have urged companies to disclose their spending aimed at influencing elections,” Timothy Smith, director of ESG shareowner engagement at Walden, noted in a press release.  “This year investors have taken a logical next step and asked companies to disclose their direct and indirect lobbying activities. Whether the issue is environmental impact, consumer protection, financial reform or shareholder rights, it is important for investors to understand how company dollars are spent to influence our laws and regulations by lobbying activities.”

Other proponents include New York State Common Retirement Funds, the Needmor Fund, PAX World Fund, Tides Foundation, Funding Exchange, Russell Family Foundation, CHRISTUS Health, Catholic Health East, and other faith-based investor groups. 

The proponents contend that most companies “do not provide even rudimentary disclosure on their lobbying expenditures and practices to investors.” The investors cite a recent IRRC Institute-funded study, which reported that S&P 500 companies spent a total of $1.1 billion on political contributions and lobbying in 2010, with $979.3 million in federal lobbying expenditures accounting for 87 percent of the total. The IRRC study found that 64 percent of S&P 500 firms made “no mention of lobbying activities, policies, or oversight,” and that only 13 companies in the S&P 500 provided details on how much they spend on lobbying.

This expanded shareholder campaign is in addition to the more than 50 proposals that investors are filing this year as part of the Center for Political Accountability’s (CPA) long-running campaign to prod companies to provide more disclosure of their campaign donations and contributions to independent advocacy groups. Overall, ISS is tracking about 100 resolutions for 2012 meetings that relate to corporate political activities.  

Meanwhile, Bruce Freed, president of the CPA, and Karl Sandstrom, the group’s outside counsel, have published an article, “Dangerous Terrain: How to Manage Corporate Political Spending in a Risky New Environment,” that addresses the reputational risks that companies face when giving money to trade associations and other independent groups. 

“Companies can seize this moment to take more control of their political spending. Executives ought to know that political disclosure is becoming part of the corporate mainstream and that more companies are exercising greater control over the use of their money. There are many changes and new freedoms now, but it is up to companies--not government--to recognize the heightened risks involved in political spending and do their best to secure their own futures,” Freed and Sandstrom write in their article, which was published in The Conference Board Review.

ISS is hosting a webinar on Wednesday (at 11 a.m. EST) to discuss these issues. The webinar will include representatives from Walden, AFSCME, and the CPA. The speakers also will include a representative of NorthStar Asset Management, which is calling for shareholder advisory votes on political spending, and a corporate representative. For more details on the webinar, please click here.