Some of Wall Street’s heaviest hitters are stepping into the national debate on guns as investment firms ask firearms makers what they are doing about gun violence, reports the Associated Press. BlackRock, a major shareholder in gun makers Sturm Ruger, American Outdoor Brands and Vista Outdoor Brands, said it wanted to speak with the three firearms makers about their responses to the issue. The fund said it is looking into creating new investment funds that exclude firearms makers and retailers, and that would affect their stock prices if many funds and investors followed suit.
Erik Gordon, a professor at the University of Michigan’s Ross School of Business, said companies are often reluctant to risk any sales in order to do the responsible thing. But it does sometimes happen, as when CVS stores stopped selling cigarettes in 2014. He said activists deserve most of the credit for getting the funds to speak out. “BlackRock didn’t wake up one morning and say, ’We are going to take a different approach to investing, it’s the right thing to do,’” he said. “It’s a reaction to the activists.” The top priority of firms like BlackRock, State Street and mutual fund company Vanguard is to make as much money as possible for their clients. But because they own so much stock, they wield a lot of influence: They can support new directors who want to change the direction of the company and back proposals that change the way it operates.