How institutional investors can shape firearms issue

Ethical fund manager addresses emotional topic and industry's efforts to work with US allies

How institutional investors can shape firearms issue

Institutional investors bear the responsibility of instigating change in gun policy, according to an industry insider.

Robert Walker, vice president, ESG Services & Ethical Funds at NEI Investments, said there is little an individual can do other than exclude companies from their portfolio but that institutions can push dialogue with companies on issues like background checks and the gun show loophole.

Walker said NEI’s screening process does not include guns sold in Walmart or Canadian Tire but that its ethical funds brand examines firms that manufacture the likes of cluster munitions or derive revenue from military contracts that violate international humanitarian law.

Gun culture is, clearly, markedly different in the US compared to Canada but, said Walker, still an emotional and highly charged issue.

He said: “Our job here is to slow it down and think through the ramifications and the structure and decision-making in a way that allows for the most effective response.

“On the handgun issue and hunting rifle issue, the semi-automatics, we are looking at ways to align with the demand set or solutions that our American counterparts are putting together.

“Much of these revolve around the Sandy Hook principles and this goes to things like improving background checks, closing the gun show loop and those kinds of things.

“There was an investor letter that went out from our allies at ICCR (Interfaith Centre on Corporate Responsibility) at the end of March, which this time we did not sign because it was very much in American language. It wasn’t inclusive of investors from outside the US but we are thinking through the ramifications of ways we can have impact where we can.”

Despite best intentions, Walker said trying to change the gun culture in the US is the very definition of frustrating and that there is much work to do. He insists it’s up to institutional investors to work on issues with companies and through the political system.

He said: “At the end it comes down to how we align with our allies in the US, and hope for some measure of rationality or sanity to enter the US public policy decision - but that is a pretty vain hope at this stage.

“I don’t know what to do other than work through it with our investor friends and help them work through companies on the retail and distribution side to see what they can do to put in place the background checks. I’m not really hopeful at this stage.

“Individual investors can do exclusion if they want to express it that way; they can always take companies out [of their portfolio]. But for us as an institutional investor we have an opportunity to work with other institutional investors, faith-based and non-faith-based, to hopefully make a difference with the gun manufacturers and retailers and perhaps through public policy working through [the US]  political system.”