May 23, 2019, Prepared Statement by Boston Common Asset Management

On behalf of Boston Common Asset Management, I, Reverend, Joseph LaMar of the Maryknoll Fathers and Brothers, hereby move Proposal 4 asking our company to provide a report on its federal and state lobbying, including indirect funding of lobbying through trade associations.

Transparency and accountability in corporate spending to influence public policy are in the best interests of Morgan Stanley shareholders.

Morgan Stanley has spent $27.47 million since 2010 on federal lobbying. And there is incomplete disclosure about spending at the state level, where our company also lobbies extensively.

  • For example, a report looking at corporate state lobbying in six states found Morgan Stanley spent more than $1.4 million lobbying from 2012 – 2015.[i]
  • Morgan Stanley claims that given the comprehensive public disclosures it already makes, the proposal “would not be an efficient use of corporate resources.”
  • But Morgan Stanley is required to report all of its federal and state lobbying and has this information, so putting this into a report could be done at little to no expense.

Corporations contribute millions to trade associations that lobby indirectly on their behalf without specific disclosure or accountability.

  • Morgan Stanley only discloses a partial listing of its trade association memberships, and fails to disclose its trade association payments, nor the amounts used for lobbying.
  • Morgan Stanley is a member of the Chamber of Commerce, which has spent more than $1.5 billion on lobbying since 1998.
  • We note that Morgan Stanley’s current disclosure fails to disclose membership in at least five trade associations, including the Business Roundtable, which spent over $23 million on federal lobbying in 2018.
  • Shareholders currently have no way to know how much of Morgan Stanley’s trade association payments are being used to lobby on its behalf.

Corporate reputation is tied to shareholder value, as studies show companies with a high reputational ranking perform better financially than lower ranked companies.[ii]

Investors are concerned that undisclosed trade association lobbying poses reputational risks when the lobbying contradicts a company’s public positions, resulting in a values misalignment.

  • Morgan Stanley faces this risk on the issue of climate lobbying.
  • For example, Morgan Stanley is committed to a strong climate policy globally,[iii] yet the Chamber undermined the Paris climate accord and lobbies against regulation to address climate change.[iv]
  • How does this incongruity match our company’s values? Does the Chamber’s position on climate change present reputational risk for our company?

Investors are also concerned that undisclosed lobbying poses financial risks when the lobbying can lead to regulatory capture.

  • A study by IMF economists looking at lobbying and the financial crisis found that lobbying by financial industry contributed to the 2008 financial crisis.
  • The study found that lobbying by financial institutions was correlated with more risk taking before the crisis, and worse performance after the crisis, and that largest lobbying financial firms were the most likely to be bailed out.[v]

Our request for disclosure is a call for transparency and accountability, and we urge support FOR this proposal.

The information in this article should not be considered a recommendation to buy or sell any security.

[i] Heidi Welsh and Robin Young, “How Leading U.S. Corporations Govern and Spend on State Lobbying,” Sustainable Investments Institute and The Investor Responsibility Research Institute, February 2017, p. 29.

[ii] “Reputation Risk,” The Conference Board, 2007, p. 6.


[iv] “Paris Pullout Pits Chamber against Some of Its Biggest Members,” Bloomberg, June 9, 2017,

[v] Deniz Igan, Prachi Mishra, and Thierry Tressel, “A Fistful of Dollars:  Lobbying and the Financial Crisis,” April 16, 2010.

Published On: May 23, 2019Categories: From the Commons