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Pressured by consumers, some companies are cutting ties with the NRA

As voices for gun control grow louder, corporations are taking steps to limit their ties to the gun industry. Delta and United Airlines, along with Hertz and MetLife, have ended discounts for NRA members while financial firms like Bank of America are re-examining their relationship with gunmakers. Rob Cox, Rob Cox, a global editor with Reuters Breakingviews, joins Hari Sreenivasan for more.

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  • HARI SREENIVASAN:

    In the wake of the Parkland school shooting, teenage survivors of the attack are pressing lawmakers to make changes to gun laws. But anger over the shooting has also led some investors to start asking what role they can play in changing how gun and ammunition manufacturers behave. Financial firms like BlackRock and Bank of America are now taking a new look at their investments in the companies who manufacture firearms. And as we mentioned earlier, pressure from gun control advocates has led a growing number of companies to sever ties with the National Rifle Association. For more I'm joined by Rob Cox, a columnist and global editor with Reuters Breakingviews. Thanks for joining us. So just today in the last 24-48 hours we've seen a lot of activity a lot of big kind of household name brands start to say that I'm not going to give NRA members perhaps a discount to go to an event or to use my services. Is this different than what's happened before?

  • ROB COX:

    Yeah I think this is different. What you're starting to see is that that people who want a change in gun laws are using the power of the purse. It's not just Twitter but it's actually they're saying on Twitter and on on social media they are no longer going to give custom to these companies that work very closely with the NRA. Now that you know that you're talking about rental car firms, hotel-lodging companies, insurance companies, I'm not sure that's going to have a material effect on the NRA on their budgets. But you know it's part of a movement and you have to think back all social movements or civil rights movements – they always have some sort of economic protest or financial boycott, some element of that when they are successful you know going all the way back to suffragette, going to the divestment in South Africa is probably the most analogous one. And we're starting to see that happening. And if you have a majority of Americans right now, just if you look at the Quinnipiac poll that was out in the last week, it said 67% of those polled are in favor of banning assault weapons or AR 15s. And therefore, if you think about it, a majority of the American consumer is a really powerful economic tool. And so I think that's starting to be harnessed by the gun violence prevention movement.

  • HARI SREENIVASAN:

    After the massacre at Sandy Hook, you saw the parents who were motivated, you saw the country start to think about these things. I saw, I remember a couple of big pension funds pulled out of money that they controlled and whether they supported it. Most people in America don't know who BlackRock is and what kind of influence they have. So again they're invested through index funds so they can't, they're not necessarily just automatic shareholders. But explain?

  • ROB COX:

    Most of the growth in in in fund management over the past couple of years has actually been in index funds so you'd say, I'm going to buy the Russell 2000 of small companies, going to buy the S&P 500. So then BlackRock, which is the largest – six trillion dollars of assets under management, so a lot of money – and then second, Vanguard. Both of them then then have to replicate that index so they end up buying Vista or American outdoor which which owns Smith and Wesson which manufactured the gun that was used to massacre 17 students and their teachers in Parkland. They buy these companies because they have to. Now, there's also another element movement as it were in the financial markets or in investing world towards what they call ESG, environmental social and governance. So a lot of, and millennial in particular who are your future customers if you're a BlackRock or a Vanguard – they are very much driven by social purpose. So I think you're really, you're starting to see this. It's almost a conflict on the one hand – you have index funds where all the money's going, on the other hand you have a movement towards making sure that your money's going to companies that provide a broader social benefit. And that's all starting to sort of, rubber meeting the road with BlackRock CEO Larry Fink, who is one of the most powerful people in finance wrote a letter just a month and a half ago to CEOs saying that your companies must actually provide a net social benefit to society. And this is a big change because now he's stuck with owning these big companies or owning big stakes in these gun companies. But at the same time, having to kind of make good on his promise and that is really going to start to push for change. It won't be divestment. I don't think in the way that we saw in the 1980s with South Africa, which will just get out. You know IBM does business, there were selling IBM stock, IBM finally pulls its business from South Africa, apartheid falls. I think what we're going to see here is more engagement.

  • HARI SREENIVASAN:

    Rob Cox of Reuters Breakingviews. Thanks so much for joining us.

  • ROB COX:

    Pleasure to be here.

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