Andreessen Horowitz-Funded OpenInvest Updates Dark Money ESG Cause to Shine Light on Corporate Transparency for Political Donations

OpenInvest, a leader in values-based investing, today launched its newly updated Divest from Dark Money Cause that helps investors purge their portfolios of companies that hide their political spending activities or policies and invest in those leading in transparency around their political donations.

OpenInvest believes it’s critical to a healthy and representative democracy that organizations are transparent about how they use their corporate coffers to influence politics. Dark money groups, which allow donors to anonymously fund political influence campaigns, spent more than $750 million in political ads and campaign donations in the 2020 election.

Though the prevalence of dark money allows corporations to conceal their political donations, investors can still hold them accountable by divesting from companies that hide their political contributions and investing in companies that opt for transparency. That is why OpenInvest originally launched its Dark Money Cause in 2018 and updated its company scores this year to help advisors dynamically build portfolios that align with their clients’ values. 

Methodology

OpenInvest partners with the Center for Political Accountability (CPA), a nonpartisan nonprofit research organization, to rate leading S&P 500 companies on their political transparency and accountability policies and practices. Companies with robust disclosure and accountability policies for lobbying and election-related spending are added to OpenInvest’s investment list, while those that fail to disclose or implement these practices are marked for divestment.

The Divestment List

A total of 127 companies made the divestment list, ranking in the lowest tier for transparency. Of those companies, 47 failed to disclose any policies and disclosure practices, including:

• Activision Blizzard Inc.

• Berkshire Hathaway Inc.

• Citrix Systems Inc.

• DISH Network

• E-Trade Financial Corp.

• Fidelity

• Garmin 

• J.B. Hunt Transport Services Inc.

• Kimberly-Clark Corp.

• Netflix

Leading this group of companies ranking in the lowest 20 percent between 2016 and 2020 is Netflix, which has failed every transparency metric for four consecutive years, followed by Tyson Foods and Hanesbrands Inc.

The Investment List

Ninety-two companies were identified as transparency trendsetters and marked for investment, with 12 receiving perfect scores for transparency, including notable organizations such as: 

• Accenture PLC

• Automatic Data Processing, Inc. (ADP)

• DuPont

• Edwards Lifescience Corp.

• Goldman Sachs Group Inc.

• Honeywell International Inc.

• HP Inc. 

• MSCI Inc.

• Northrop Grumman Corp.

• Schlumberger Ltd.

Non-compliant Companies

Four companies included in the most recent CPA-Zicklin Index had an agreement to share transparency data with the CPA but failed to comply, refusing to disclose any of its political spending for 2020: 

• Delta Air Lines Inc.

• Harley-Davidson Inc.

• The Kroger Co. 

• Sysco Corp.

Most Improved Companies

DuPont and Hilton were among the most improved, with the chemicals company jumping from the bottom-tier in 2019 to a perfect transparency rating last year after disclosing a detailed policy on political expenditures and implementing a board committee that reviews its policy on such spending. 

“OpenInvest holds a foundational belief that investors deserve to know what their money is endorsing,” said Josh Levin, co-founder and Chief Strategy Officer of OpenInvest. “With no meaningful rules governing dark money spending, our Divest from Dark Money Cause is the strongest mechanism for shareholders to penalize companies that hide their efforts to influence politics.”

“I feel robust political transparency and accountability policies are essential for well-run, well-governed companies,” said Bruce Freed, president and co-founder of the Center for Political Accountability. “The risks posed by political spending from corporations have grown exponentially as investors increasingly look for companies that align it with their core values and inspect their wider impact on the world. I believe OpenInvest is performing an important service by building investment strategies around these principles.” 

For more information on the OpenInvest Dark Money Cause and to see how OpenInvest can help your clients align their portfolios with their values, visit here. 

*References to any particular entity should not be considered as a recommendation by OpenInvest.

About OpenInvest

OpenInvest is a values-based financial services company that helps advisors engage their clients and grow their business. We offer environmental, social, governance (ESG) investment management products and impact reporting services. Our investment management solutions use proprietary technology to seamlessly create low-cost investment portfolios tailored to our clients’ values while tracking market indices. Our sophisticated impact reports reflect the tangible impact our clients’ portfolios have on the world. Funded by YC and Andreessen Horowitz, OpenInvest is one of the only VC-backed Public Benefit Corporations. Learn more at openinvest.com.

Contact Information

Melissa Rossiter

Account Manager

VSC for OpenInvest

openinvest@vsc.co