Will Wall Street ever let go of guns?
Activists have made similar appeals for years, only to see all the moments pass. Taken together, the recent developments suggest that, at least for the moment, the financial community senses the rising public pressure — and is positioning itself accordingly.
“Now is the time for the financial services industry to step off the sidelines and take a stand,” said Jonas Kron, director of shareholder advocacy at Trillium Asset Management, which focuses on sustainable investments.
The question is whether other investors, both big and small, are willing to exit investments that have plunged in value over the past year. Gun sales — and gun stocks — have tumbled since Donald Trump rose to the presidency. The thinking was that his administration, unlike the previous one, would be unlikely to push for stricter gun controls given its support from the NRA.
Guns and Pensions
What Your Peers Are Reading
Public teacher retirement funds have investments in firearms makers. They’ve become hot-button holdings in the wake of school massacres.
A quiet backlash has been building for years. Some major endowments, such as the $10 billion University of California fund, sold guns stocks after the 2012 Sandy Hook school shooting in Connecticut, which prompted calls for more gun control.
“We continue to monitor this issues and take it very seriously,” said Dianne Klein, a spokesperson the university system. Others are, too. On Thursday, the First National Bank of Omaha said it wouldn’t renew its contract with the NRA for a branded credit card, because of “customer feedback.”
It isn’t clear how many of the NRA’s nearly 5 million members hold the credit card. Representatives of the NRA didn’t immediately return a request for comment. The Second Amendment-rights organization continues to offer a prepaid card, issued by Republic Bank & Trust Co. The bank didn’t reply to request for comment on the matter.
An increasing number of institutions, be they pension funds or municipalities, are demanding that their portfolios exclude companies that make guns and other weapons. Many of the funds, such as the giant CalSTRS, represent one of the groups most affected by school shootings: teachers.
More than $845 billion of U.S. institutional assets restricted investments were in weapons as of the start of 2016, according to data from US SIF, the Forum for Sustainable and Responsible Investment. That number soared more than 1,000 percent following the Sandy Hook school shooting in December 2012, from $74 billion at the start of 2012.
Rommel Dioonisio, managing director of research at Aegis Capital Corp., said that given the outcry over the latest shooting, “it would certainly not surprise me to see other state funds divest their investment holdings in the industry.” Still, that might not depress gun stocks given other investors will probably still be willing to buy them.
For the moment, holders are not just dumping shares of gun makers. Some are trying to exert pressure from within: Shareholders have filed at least three proposals at sellers or makers of guns in the current proxy season. The proposals ask American Outdoor Brands Corp., maker of Smith & Wesson; Dick’s Sporting Goods Inc.; and Sturm Ruger & Co. to report on steps they’re taking to improve gun safety and to mitigate the harm associated with gun products.
The proposals were filed by religious groups affiliated with the Interfaith Center on Corporate Responsibility, whose members includes 300 institutional investors that manage $400 billion in assets.