Green Century Capital Management Announces Agreement with Cummins Inc. to Disclose Political Contributions
Company joins 60 other embracing new standard
Boston -- Green Century Capital Management, Inc., a Boston-based investment adviser to the environmentally responsible Green Century Funds, announced today that Cummins Inc.,* a manufacturer of engines and related technologies, adopted policies on the disclosure and board oversight of its political spending with corporate funds. Cummins is the 60th company to agree to political transparency and accountability, according to the Center for Political Accountability (CPA).
According to Green Century, Cummins has agreed to report its soft money contributions and payments to trade associations and other tax-exempt organizations used for political purposes. The agreement resulted from a dialogue Green Century had with the company in conjunction with the CPA, a non-partisan advocacy organization leading the political disclosure effort.
"Shareholders must be aware of the full spectrum of political donations made by companies like Cummins, particularly payments to trade associations and groups such as 501(c)(4)s and '527' organizations," said Larisa Ruoff, Green Century's Director of Shareholder Advocacy.
Companies are not always required by law to disclose their soft money contributions or payments to trade associations that may be used for political purposes, and trade associations are not required to disclose the source of their funding or their membership. 527s, inherently political organizations, are not governed by contribution or spending limits.
"This secrecy leaves institutional investors, individual shareholders and member companies themselves often in the dark about the use of company resources for political activities," Ruoff said. "It heightens the risk companies may face as a result of their political spending."
Today’s announcement by the CPA indicates companies are increasingly recognizing the risks associated with limited or no political disclosure and are changing their policies and practices.
In the case of Cummins, Green Century expressed concerns that significant steps the company has taken to address climate change could be undercut by trade associations of which it is a member.
"As the manager of environmentally responsible mutual funds, we believe transparency and accountability in political spending are critical," Ruoff said. "Shareholders must know how corporate funds are spent so they can invest wisely, avoid risks and ensure that corporate funds are not used for policy objectives that counter long-term interests of the company."
*As of December 31, 2008, Cummins Inc. was not held by the Green Century Balanced Fund and comprised 0.14% of the Green Century Equity Fund. Portfolio composition will change due to ongoing management of the Funds. References to specific investments should not be construed as a recommendation of the securities by the Funds, their administrator, or their distributor.
Green Century Capital Management is an investment advisory firm focused on environmentally responsible investing. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century's mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. Green Century believes that shareholder advocacy is a critical component of responsible investing and actively advocates for greater corporate environmental accountability.
You should consider the Funds' investment objectives, risks, charges, and expenses carefully before investing. For a prospectus that contains this and other information about the Funds, call 1-800-93-GREEN, visit www.greencentury.com or email info@greencentury.com. Please read the prospectus carefully before investing.
Distributed by UMB Distribution Services, LLC 3/09
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