After a majority of shareholders voted in favor of First Affirmative’s lobbying disclosure proposal at the 2022 annual shareholder meeting, Travelers responded to our 2023 proposal by agreeing to disclose lobbying expenditures for all trade associations where company dues exceeds $25,000 annually.
This disclosure commitment is the end of a seven-year ongoing engagement with Travelers. We first engaged the company with regard to insufficient lobbying disclosure back in 2015 and filed our first shareholder proposal with them in 2016. The company made significant improvements over the course of time as we continued to engage them via dialogue and shareholder proposals that achieved in excess of 40% support — but remained steadfast in their refusal to disclose trade association membership and spending until now. Lobbying spending through trade associations was finally posted in early February, bringing the company in line with many of their insurance company peers on this issue. Investors now have broader insight into trade association affiliations, as well as the extent of lobbying spending done via third parties.
Why should investors care?
Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity. These third-party groups are not obligated to disclose their donors, giving companies ample opportunity to influence public policy without transparency or accountability to investors and other stakeholders.
Inadequate oversight of this third-party spending can also lead to companies supporting lobbying activities that actually conflict with the corporate mission and goals. Investors will now be able to evaluate this spending and discuss the impacts and risks with the company. Given that Travelers is highly exposed to climate risk, you can expect investors to be particularly interested in how the trade associations that Travelers chooses to belong to and delegate lobbying responsibility to attempt to influence public policy on climate.
*Mention of specific securities is not an offer to buy or sell that security.