WASHINGTON– To show opposition to a company’s actions, some shareholders divest. But a new platform offers a different option — pooling assets to publicly petition for changes in corporate policies.
Stake, launched in 2018, unites shareholders across companies in opposition to a common conflict. Its current target is severing companies’ relationships with migrant detention centers.
“We fully believe that divestment, as a tactic, has power,” said Stake co-founder Gabe Rissman, but only when it’s done by large institutions — not individual investors with relatively small stock holdings. “Most individuals don’t have that kind of influence afforded to big institutions.”
The platform has taken on issues from the financing of fossil fuels to LGBTQ discrimination. In the past month, Stake has collected $56 million worth of individual shares to incentivize companies to stop profiting from migrant detention centers.
“We’re not investing anything. You’re not buying anything. It’s just a measure of power and support,” Rissman said.
Stake’s goal is to amass enough opposition from shareholders that the corporations will have to pay attention. Enough shareholder support will instigate a shareholder proposal to each company, demanding it cut financial ties to the detention centers. Anyone who owns shares in Wayfair, Amazon, Geo Group or CoreCivic can add their signature to Stake’s petition to encourage the companies to withdraw their involvement with the centers. Shareholders in Barclays, Fidelity, Vanguard and BlackRock, which have financed the two prison companies, also have supported the petition, asking these investment managers to pressure the private prison firms to get out of the migrant detention business.
Since 2017, the Department of Homeland Security has awarded multimillion-dollar contracts to CoreCivic and Geo Group to build and develop the migrant facilities. Amazon sold its facial-recognition technology to law enforcement and Amazon Web Services powers Palantir, a software company that has nearly $43 million in contracts with Immigration and Customs Enforcement. In June, Wayfair employees discovered that the company had sold $200,000 worth of furniture to a government contractor running a migrant detention center.
Any shareholder in any company can create a Stake petition for free. Stake’s revenue comes from subscriptions sold to financial advisers and impact investors, alerting them to businesses’ actions that may offend shareholders. Advisers then inform their clients that they could use their shares to support Stake’s petitions to instill change in company behavior.
For instance, SRI Investing, a financial advisory firm that specializes in socially responsible investing, introduces clients to Stake’s petitions based on environmental, governance and social issues SRI’s clients have identified as important to them — including investment in private prisons.
SRI Investing CEO Gary Matthews echoed Rissman’s take on the impact of shareholders.
“Shareholder advocacy can definitely change company behavior,” Matthews said. “They don’t notice if I don’t buy their stock. But they do notice if I’m part of the shareholder resolution that garners 50 percent of the vote or even 20 percent of the vote at an annual meeting.”
After a petition receives considerable traction, Stake then passes along the petition to nonprofits and asset management firms that have relationships with relevant companies. For nonprofits in particular, the dollars behind Stake’s petitions can “make their demands more powerful,” Rissman said.
Trillium, a $3 billion asset management firm, is leading the charge on the migrant detention center petition. Stake’s website shows $56 million of share support. But with Trillium’s assets behind it, the petition actually has $3.15 billion backing it.
“Stake’s efforts are complementary and incredibly helpful to the efforts we have of dialogue with companies because it starts to bring additional asset owners into the picture of people who are concerned,” said Trillium CEO Matthew Patsky. “We may have bigger dollars,” but Stake adds more of a brand risk because “they can have the bigger numbers of people, which could start to get them really worried about social media impact.”
Trillium recently leveraged its assets to pressure Bank of America to stop lending to Geo Group and CoreCivic. In June, Bank of America announced plans to terminate its relationship with the private prison firms.
Rissman said that throughout August, Stake plans to keep collecting petition signatures and continue “connecting with all the related organizations to form a coherent block” before delivering the petitions to companies.