Free Enterprise Action Fund Warns Business Roundtable Member Companies to Focus on Real Business Growth Strategies, Not ‘Feel-Good’ Public Relations Stunts

Share Article

Mutual fund warns Business Roundtable members that the recently announced "S.E.E. Change" initiative appears to be more a public relations gimmick than an effective strategy for business growth.

Action Fund Management LLC (AFM), investment advisor to the Free Enterprise Action Fund (, warned the 18 companies participating in the “sustainable growth” initiative recently announced by the Business Roundtable (BRT) to stop wasting corporate resources on superficial public relations efforts and to concentrate on genuine business development efforts that will increase shareholder value and benefit society.

“We are concerned that the BRT’s CEOs seem to be more interested in public relations exercises of little real value than tackling the tougher challenges of real business growth,” said Steven Milloy, managing partner of AFM and lead portfolio manager for the Free Enterprise Action Fund (FEAF).

The FEAF is a mutual fund seeking to provide investors with financial returns while persuading companies to focus on increasing shareholder value and profits rather than appeasing anti-business activists.

Last week the BRT announced its “S.E.E. Change” initiative, which is supposed to encourage U.S. companies to embrace strategies and projects that measurably improve Society, the Environment and the Economy.” The BRT members involved include 3M, Alcoa, American Electric Power, Citigroup, Coca Cola, Dow, DuPont, Eastman Kodak, FPL Group, General Electric, General Motors, HSBC, ITT Industries, Office Depot, Procter & Gamble, Sun Microsystems, Weyerhaeuser and Xerox.

Except for HSBC, which is not U.S.-based, the FEAF owns less than one percent of the shares of each of the aforementioned companies.

Under “S.E.E. Change,” the BRT companies say they are aiming to adopt “sustainable growth” strategies for reducing energy consumption, providing clean water and for improving public health.

“First, we think a focus on reducing energy use is misplaced,” said AFM managing partner Tom Borelli. Our society needs dramatically more affordable energy. Experts say worldwide demand for energy will triple by the year 2050.(1) In our view, energy efficiency is a short-term strategy that only operates at the margins. It’s not a long-term, growth strategy for Fortune 500 businesses or society,” added Borelli.

“If CEOs participating in the BRT initiative expect applause for tightening the screws and turning off the lights, they’re sadly mistaken,” said Milloy. We expect the CEOs to be working on strategies for real growth, not nickel-and-dime savings that don’t in any significant way answer the question posed by the BRT in its full-page newspaper ads, “How can my company make the world a better place?” (2)

Ironically, BRT members are more likely contributing to global problems rather than alleviating them, according to AFM.

“Bowing to pressure from the Rainforest Action Network, 'S.E.E. Change” participant Citigroup announced in 2004 that it would restrict lending for energy and land-use projects in the developing world. (3) ‘“Wealth equals health,” said Borelli. If the people in the developing world are unable to obtain affordable energy and are blocked from developing their own natural resources, they’ll never achieve the level of economic development needed to improve public health and protect the environment,” added Borelli.    

“S.E.E. Change” participants Alcoa, American Electric Power, Dupont, General Electric and Weyerhaeuser belong to the Pew Center on Global Climate Change. “The Pew Center advocates the Kyoto Protocol, the scientifically controversial global warming treaty estimated to reduce global economic growth by $150 billion to $350 billion per year.(4) We don’t see how crippling the global economy is going to help anyone, especially when there doesn’t seem to be a sound scientific basis for the Kyoto Protocol,” said Milloy.

“If CEOs really want to act ‘responsibly’ toward their shareholders and society, they ought to use the engine of capitalism to leverage their resources and expertise to develop products and services that society wants and needs. In doing so, they would open new markets, create jobs and improve the global economy,” said Borelli.

Citing the recent work of renowned economist Arthur Laffer, who reported earlier this year that there was no association between so-called “corporate social responsibility” initiatives and business profitability, (5) Milloy said, “Our society is in big trouble if 21st century CEOs see the public relations and the propagation of environmental and economic myths as the path toward profitability.

“S.E.E. Change?” asked Milloy. “Unless the BRT companies focus on business growth, we may need to “see change” in corporate management.”

The Free Enterprise Action Fund seeks long-term capital appreciation through investment and advocacy that promote the American system of free enterprise. An investor should consider the fund's investment objectives, risks, and charges and expenses carefully before investing or sending money. This and other important information about the Free Enterprise Action Fund can be found in the fund's prospectus. To obtain a prospectus, please call 1-800-766-3960 or visit Please read the prospectus carefully before investing.

Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. The Free Enterprise Action Fund is a new fund with limited investment history and there is no guarantee that it will achieve its investment objectives.

The Free Enterprise Action Fund is advised by Action Fund Management, LLC., which receives a fee for its services, and is distributed by BISYS Fund Services Limited Partnership, which is not affiliated with Action Fund Management, LLC.


1. Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet. Martin I. Hoffert, Ken Caldeira, Gregory Benford, David R. Criswell, Christopher Green, Howard Herzog, Atul K. Jain, Haroon S. Kheshgi, Klaus S. Lackner, John S. Lewis, H. Douglas Lightfoot, Wallace Manheimer, John C. Mankins, Michael E. Mauel, L. John Perkins, Michael E. Schlesinger, Tyler Volk, and Tom M. L. Wigley

Science Nov 1 2002: 981-987.

2. See BRT web site.

3. Rainforest Action Network and Citigroup Announce Enhanced Citigroup Environmental Policy. PR Newswire. January 22, 2004.

4. Kyoto Protocol Simply Wrong, Wrong, Wrong. Competitive Enterprise Institute. February 15, 2005.

5. Does Corporate Social Responsibility Enhance Buisness Profitability. Arthur B. Laffer, Andrew Coors, Wayne Winegarden. January 18, 2005.

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Steven Milloy