Shareholders ask firms: What are your politics?

Campaign 2012 might be history, but activists are keeping the political battles going in 2013 by moving them to a new arena: corporate shareholder meetings.

As stockholders gather for annual meetings this spring, they'll consider 115 resolutions calling on firms to change or disclose details about how they influence elections and lobbying campaigns. That makes policy-related spending this year's biggest issue for investors with environmental and social agendas; 1 in 3 investor resolutions deals with the subject.

At issue: Do shareholders need to know where and how a firm flexes its muscles in the policy arena? Some say yes because donors and lobbyists shape public policy, sometimes in ways that might pose long-term risks for their companies.

"Investors are very aware of risks that companies face when they get involved in political spending," says Timothy Smith, a senior vice president at Walden Asset Management, which has sponsored lobbying-related resolutions. He cites the example of Target, which apologized in 2010 for donating to a group that supported a Minnesota gubernatorial candidate who opposed same-sex marriage.

Others, however, say disclosure debates are harmful distractions, brought by political activists who want to muzzle corporations. The US Chamber of Commerce has told the California Public Employees' Retirement System (CalPERS) that its calls for disclosure "violate CalPERS' fiduciary duties to its participants and beneficiaries."

A company's political activity "has nothing to do with the value of its underlying assets," which are stockholders' core concern, says Allen Dickerson, legal director at the Center for Competitive Politics, a Washington-based nonprofit that advocates for First Amendment rights. "I don't understand how it's good for the country or good for shareholders to turn the annual meeting into a partisan trench war every year."

Political disclosure has become a hot topic in the wake of the Supreme Court's 2010 Citizens United decision, which cleared the way for corporations to do unlimited advocacy. The debate marks a contentious patch in a proxy season that's otherwise setting records for constructive dialogues on issues from bribery to supply-chain labor practices.

On the cooperative front, efforts to shape corporate policy without the use of confrontational, high-profile shareholder resolutions are gaining momentum. For the second year in a row, members of the Interfaith Center on Corporate Responsibility (ICCR) are engaged in more voluntary dialogues (225) than resolutions (180), which are used to cajole companies that have resisted shareholder initiatives.

"We're starting to see [more dialogue] in places where data-driven business cases are more powerful than they were 10 years ago," says Laura Berry, executive director for ICCR. Whether it's saving energy or marketing healthy foods, she says, companies are increasingly willing to hear activists make a strong business case for their agendas.

The environment is this year's second largest issue (after political contributions/lobbying) as activists broaden their targets to include more sectors, such as retail, in bids to stop climate change. A growing number of resolutions also call on companies to generate sustainability reports, not only from corporate headquarters but from suppliers as well.

On some issues, companies no longer need much nudging. For the first time in years, fewer than 20 resolutions call for nondiscrimination policies based on sexual orientation. The number is low because so many companies have already adopted such policies, according to Institutional Shareholder Services.

In other areas,companies are hearing more from activists than in years past. Resolutions calling for labeling genetically modified organisms are surging – from one last year to seven this year – in the wake of a California ballot initiative that industry helped defeat in 2012. They're also seeking more diversity on boards of directors; 24 resolutions versus eight last year.

Still, the resolutions dealing with political contributions are generating some of the sharpest pushback. Many of them call on companies to list payments made for direct lobbying or to organizations that craft and endorse model legislation. An oft-cited example is the US Chamber of Commerce, which stands accused in one resolution of campaigning "vigorously against measures to stop climate change."

Activists say contributions to the Chamber run counter to companies' green initiatives, but the Chamber says these shareholder resolutions are based on different concerns. "Disclosure is not the ultimate goal of these groups," says Chamber spokesman Blair Holmes in an e-mail. "Rather, it is simply a means by which to extract information which can then be used to intimidate companies into remaining silent."

To date, policy-related resolutions have not gotten much support, according to an analysis from the Manhattan Institute for Policy Research, a conservative nonprofit in New York. On average, only 17 percent of shareholders supported them in 2012, the lowest percentage in at least seven years.