NorthStar believes that creative shareholder engagement, local investing, financial literacy, and targeted giving are positive forces for change. We consider it a fiduciary duty to engage with the companies in which we invest to improve the company’s positions and policies on environmental sustainability, human rights, diversity, employee relations, immigration, and LGBT (lesbian, gay, bisexual, transgender) equality.
We believe that intentionally and purposefully perpetuating the wealth gap and income inequality is wrong, and we believe that prioritizing short-term financial returns to shareholders can compromise the fair and equitable treatment of a company’s employees, suppliers, and customers; it can compromise a company’s long-term planning, research, and development; and it can be at the expense of the environment. Rather than expecting companies to minimize expenses (including salaries and benefits) in order to leave a higher profit for shareholders, we rearrange the financial equation so that all constituents, including shareholders, are on the same side.
Our work is about doing good: changing corporations and business for the better. We know there are powerful negative forces at work and we choose to take a clear-eyed (but not alarmist) approach toward engaging for positive change.
No company will meet all of our criteria, and our “buy list” reflects this. We believe that when we invest in a stock, we are partnering with that company and we commit to engaging with that company on evolving issues over the course of our long-term ownership. For this reason, we use shareholder proposals to engage investee companies in issue areas where we would like them to adopt different practices and policies.
In 2000, NorthStar filed its first shareholder resolution asking Household International (a provider of consumer loans and credit cards in which we no longer invest) to link executive compensation to progress in addressing predatory lending issues at the company. Less than two years after our shareholder proposal reached management’s desks, Household International was forced to settle with state regulators to the tune of $486 million for predatory lending behaviors, clearly affirming the need for our work. Activism is now an integral part of the social investment process at our company. On a regular basis, our investment committee along with the entire NorthStar staff works to identify the issues we want to address and the companies we want to target to bring our perspective forward. After extensive research of the issue and in-depth analysis of the companies in our clients’ portfolios, we file shareholder proposals and engage with companies on groundbreaking connections between social, ecological and political issues and company behavior.
Since our first corporate engagement, NorthStar has filed more than 150 shareholder proposals on a variety of human rights, environment, economic inequality, race and gender equality, and corporate governance matters. Click here to view a summary of our work.
NorthStar has written several papers to illustrate our positions on issues such as fossil fuel divestment and political contributions. Please use the links below to view these white papers:
- Prison Labor in the United States: An Investor Perspective (2018)
- Fiduciary Responsibility in Corporate Political Spending: Governance, Transparency, & Accountability (2014)
- To Paraphrase Mark Twain: The Cost of Fossil Fuel Divestment Has Been Greatly Exaggerated (2013)
Local & Direct Investing
NorthStar clients seek direct connections and impact investments in a variety of community loan funds and other private investments. We refer to these as Outside Investments because they are outside the realm of the public equity and fixed income markets. NorthStar carefully researches and selects investment opportunities, matching opportunities with clients who have specific interests and appropriate risk tolerance. Examples of loan fund partnerships include: Boston Community Capital, Cooperative Fund of New England, and Working Capital for Community Needs. We review private investments on a case by case basis when opportunities arise, or when guided through our work with individual clients to include alternatives to conventional investment vehicles. We develop long-term relationships with each of the organizations in which are clients are invested and engage with them as needed.
We encourage you to read the blog of Leslie Christian, NorthStar’s Integrated Capital Specialist: Outside Investments, a division of NorthStar Asset Management.
Financial literacy isn’t typically taught in school, yet it’s a complicated topic every adult should master. Beyond the basics of balancing a checkbook and budgeting monthly expenses, consumers need to understand the finer points of saving, borrowing and investing. NorthStar helps clients and women of all ages and stages of life take control of their financial lives. Topics include credit risk, managing student loans, budgeting, cash flow, charitable giving and investing. To learn more about NorthStar’s financial education courses contact us at 617.522.2635 or firstname.lastname@example.org.
Every year shareholders are asked to vote on issues ranging from approval of the Board of Directors slate and executive compensation packages to policies that ensure fair labor practices and combat global warming. While many financial advisors outsource proxy voting to a service provider, NorthStar’s internal staff vote all NorthStar client proxies according to the guidelines written by NorthStar. In addition to an annual review and revision of those guidelines, NorthStar publishes an annual report reviewing the prior year’s proxy activities and the firm’s shareholder activism work. Both documents, found below, are typically published late summer.
Proxy Voting & Shareholder Activism Annual Report (2018 report coming soon!)