Shareholder PUMA Urges Goldman Sachs To Divest From Gun Manufacturers
PUMA, an activist shareholder for Goldman Sachs, has called on the bank to end its business relationship with gun manufacturers.
The move to target Goldman Sachs follows similar pressure on other large US financial institutions. Last year, BlackRock, the world's largest asset manager, was also targeted.
PUMA, founded in 2005, works to make shareholder advocacy more accessible for individual investors. The group's tactics include putting forward shareholder proposals at annual meetings. Last May, PUMA successfully got a gun control proposal onto BlackRock's annual meeting ballot. In 2021, PUMA succeeded in pressuring California's public employee retirement system, CalPERS, to divest from private prison stocks.
BlackRock’s engagement with PUMA led the asset manager to announce a new sustainable investing policy, including a review of its relationships with gun manufacturers. In May 2023, BlackRock voted in favor of a shareholder resolution asking the company to report on its policies for assessing gun industry clients.
PUMA’s proposal calls on Goldman to adopt a similar policy, including a commitment to not underwrite new debt or equity offerings from gun manufacturers, and to not provide other financial services that could reasonably be foreseen to help the gun industry grow.
It is thought that PUMA will formally file its proposal in the coming weeks in order for it to be included in the ballot for Goldman Sachs’ 2023 annual meeting.
Goldman's Response
Goldman Sachs has not yet commented on PUMA's proposal. However, the bank has previously said that it does not finance gun manufacturers directly, and that it only provides banking services to a very small number of companies that make guns.
Although Goldman Sachs provides banking services to gun manufacturers, it is not clear how extensive these services are. Goldman Sachs has not disclosed the names of its gun industry clients, and it is not clear how much revenue it generates from these clients.
PUMA may be hoping that its proposal will put pressure on Goldman Sachs to disclose more information about its gun industry clients.
The Financial Sector and Gun Control
The financial sector has come under increasing pressure to take action on gun control in recent years. In the wake of mass shootings, there have been calls for banks and other financial institutions to cut ties with gun manufacturers.
Some financial institutions have already taken steps to limit their exposure to the gun industry. Citigroup, Bank of America, and JPMorgan Chase have all announced policies that restrict their business relationships with gun manufacturers.
PUMA's proposal is the latest sign that shareholder activism is playing a role in the debate over gun control. Activist shareholders are increasingly using their power to pressure companies to take action on social and environmental issues.
The Gun Industry in the US
The gun industry is a major economic force in the United States. In 2021, the industry generated an estimated $53 billion in revenue. There are an estimated 12,000 gun manufacturers in the United States, and the industry employs an estimated 1.5 million people.
The gun industry is a highly controversial industry. Gun rights advocates argue that the Second Amendment to the US Constitution protects the right to own guns, and that gun control laws infringe on this right. Gun control advocates argue that gun control laws are necessary to reduce gun violence.
The debate over gun control is likely to continue for many years to come.
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