Here is the one short sentence most likely to make conservatives crazy -- progressive companies perform better than conservative companies. Put another way, companies that adhere to progressive principles and support Democratic candidates with their political contributions have wildly outperformed companies that aren't progressive and have given to Republicans over the past ten years.
In our new book, The Blue Way: How to Profit by Investing in Better World, we tallied the political contributions of the top executives and corporate PACs for every company in the S&P 500, and the Russell 2000, over the past decade. We then created a set of companies that contributed the majority of their political contributions to Democrats and whose business behavior showed a commitment to progressive values (i.e., respect for labor rights, environmental stewardship). The resulting set of 76 "blue" companies in the S&P 500, and 224 companies in the Russell 2000, includes some of the most innovative, interesting, and profitable companies around. For example, as you can see in the graph, the 76 Blue companies in the S&P 500 have collectively outpaced the S&P 500 over the past decade -- and they've outperformed their conservative "red" counterparts by even more.
Show this chart to your favorite Republicans and watch them spew, spit, growl and try to pick it apart because they simply can't believe that this is true. This drives the right-wing conservative Republicans crazy because they have worked hard to create the myth that Republicans are good for business and good businesses support Republicans.
In fact, neither contention is true. Just consider the performance of the economy under the last ten presidents (five Democrats, five Republicans -- excluding the current administration). If the administrations are ranked by GDP growth, four of the top five are Democratic presidencies. If the ranking is done by unemployment rate, four of the top five are Democratic presidencies. Any way you slice the data, you get the same results: put a Democrat in the White House and the country's economy will benefit.
The same holds true at the company level for Democratic CEOs. Progressive business leaders generate long-term growth and profit by using practices that stem from their values: they invest in employees to create a happy, healthy, productive workforce; they embrace environmental and resource stewardship to create more efficient businesses; they work with liberal critics to find creative solutions to social problems; and they emphasize and support innovation. They ignore Wall Street's calls for slash-and-burn practices that just raise short-term share prices. Instead they create sustainable shareholder value.
But blue companies are not easy to find. 380 of the S&P 500 companies give a majority of their political contributions to Republicans. Of the fifty companies that gave the largest political contributions over the past decade, not a single one gave a majority of its contributions to Democrats. Unfortunately, if you have any money invested in the stock market, you are probably supporting Republican companies. Take a look at the top twenty-five holdings of the ten largest U.S. large-cap mutual funds: 79% of their investments are in companies that support Republicans. Shockingly, the same holds true for socially-responsible mutual funds - of the top twenty-five holdings of the ten largest socially-responsible mutual funds, 77% of their investments are in companies that support Republicans.
It is time progressives and Democrats stopped saying one thing and investing in another - particularly when the Democrats, with different sensibilities and priorities, actually lead companies that do better over the long run. Blue companies, opposed to just socially responsible companies, have found a way to create strong financial returns and promote the social welfare.
As individuals, we should support these companies - by investing in them in mutual funds such as ours and shopping with them using BuyBlue.org. As a national political movement, we need to reclaim our leadership on economic and business issues -- not by acting like Republicans, but like Democrats. Democratic presidents and Democratic congresses have been better stewards of the economy just as Democratic CEOs have been better stewards of responsible, profitable business. We need to spread that message. That is the Blue Way, and that is the way to win next November.