Socially Responsible Investing Isn't Just for Cranks

There's a frustrating terminological imprecision in the phrases "shareholder activist" and "activist shareholder." There are two quite separate kinds of activist:

The two kinds tend to agree on some corporate-governance issues (nobody likes staggered boards), but otherwise they are not so much opposed as they are unrelated. They focus on different issues and do different things. Activists of the first type tend to be big hedge funds who take concentrated positions in order to effect big changes; they do their activism via proxy fights and takeover contests and excoriating public letters and private lobbying of other big shareholders. Activists of the second type were traditionally small and sort of crankish -- retired retail shareholders, religious orders -- and did their activism across many companies via 14a-18 proxy proposals and rambling speeches at shareholder meetings. But that is changing as enormous pension funds have become more interested in environmental and social issues. There is an opening for type-2 activism as a business, for activist funds focused not on economic efficiency but on long-term environmental and social stewardship.