As a long-term owner that invests in all sectors of the economy, the Fund works to promote sound ESG practices at the public companies in its portfolio through active ownership and targeted public policy advocacy focusing on sustainability, diversity and accountability. Underlying all of the Fund’s engagement activities is a commitment to active ownership—using the Fund’s voice and votes to ensure the long-term success of our portfolio investments. The Fund’s independent proxy voting is an integral part of the Comptroller’s fiduciary duty. Proxy voting allows the Fund to participate in selecting a company’s directors, and impact governance, business practices, strategies and risk management. In 2019, the Fund voted on 28,322 ballot items at 3,273 portfolio company meetings.
Filing shareholder proposals is another powerful engagement tool that provides an opportunity to bring specific issues to the attention of a company’s board, management and fellow investors. When filing a shareholder proposal, the Fund seeks a productive dialogue with the company. This includes discussing the proposal with the company, allowing the company to highlight its work on the given issue, and negotiating how the company can address the Fund’s concerns. If the company and the Fund reach an agreement regarding the implementation of the proposal, the Fund withdraws the proposal. In the 2019 proxy season, the Fund filed 46 shareholder proposals with companies representing a combined portfolio value of $8.5 billion. These filings resulted in 25 agreements with companies to implement the proposals and record votes at a number of companies, including one majority vote and votes of greater than 30 percent on proposals at 10 companies.
Other shareholder engagement efforts can also lead to productive dialogues with or actions by directors and management. Raising critical issues through written correspondence, investor statements, press strategies and private dialogue has resulted in many important company actions, commitments and disclosures to address investor concerns, and will continue to play an essential role in our engagements.
The Fund is not alone in its commitment to enhancing the long-term value of its investments, and works with many like-minded investors associations, coalitions and organizations to amplify our voices. These affiliations, partners, and coalitions include four where the Fund holds leadership positions: The Council of Institutional Investors, which works to promote the interests of institutional investors; Ceres, a non-profit devoted to sustainable investing, where the Comptroller serves as a director; The Thirty Percent Coalition, dedicated to diversity on boards; and, Chief Executives for Corporate Purpose, which empowers corporations to be a force for good in society by adopting social strategies to engage stakeholders. Other organizations where the Fund plays an active role include the Carbon Disclosure Project (CDP), the Center for Political Accountability, Climate Action 100+, the Interfaith Center on Corporate Responsibility, and the Human Rights Alliance; the Fund also maintains alliances with other public pension funds, asset managers, and Taft-Hartley funds.
In addition to engaging directly with companies, the Corporate Governance Program also focuses on public policy advocacy when it will improve the long-term value of our investments by supporting policies that promote the overall stability, transparency and functionality of financial markets and the economy. This public policy engagement takes many forms, including meetings and correspondence with elected representatives, regulators and other public officials, testimony at hearings and forums, comments on regulatory and legislative proposals, and participation in state, national, and international forums and initiatives. In 2019, our primary public policy priorities included protecting shareholder rights and fighting efforts to roll back environmental protections that could threaten the Fund’s investments.