Trillium Asset Management Joins Investors in Writing the SEC over Abbott's Treatment of PVCs and Health Concerns (Archive)
On June 29th Trillium Asset Management joined eight religious institutions in asking the Securities and Exchange Commission to require Abbott Laboratories (ABT) to inform its shareholders about the new scientific findings and market trends on DEHP (di-ethylhexyl-phthalate) and dioxin, two chemicals associated with polyvinyl chloride (PVC) plastic. The letter, signed by nine institutions collectively owning about 673,000 shares of Abbott stock, describes the “emerging science issues that we believe may reasonably pose material issues to the company.”
“Shareholders expect a health care company like Abbott to be in the forefront of scientific analysis and product innovation. But…Abbott seems so caught up in defending its current use of PVC while ignoring or disregarding new product, policy and scientific developments,” explained Gordon Judd, CSB, representing the Retirement Plans for the Employees of the Sisters of Mercy Regional Community of Detroit, a signatory of the letter. Abbott uses DEHP to make soft PVC medical devices such as intravenous (IV) bags and tubing. The process of making PVC, as well as its disposal by incineration, creates dioxin, one of the most toxic compounds known.
Charlotte Brody, RN, Health Care Without Harm Co-Coordinator, seconded the shareholders’ petition for full disclosure: “Recent studies and government and private actions in the United States and Europe are warning the health care industry that PVC plastic is not as safe as we once thought. The science is warning us that premature infants, pregnant women and their developing children, and patients being fed through the intestine may be at special risk. But Abbott isn’t heeding that warning and changing its products to keep up with the emerging science.”
“Contrary to its fundamental obligation to inform its shareholders about trends, developments and uncertainties that may materially affect the company, it is our contention that Abbott has consciously distributed outdated and inaccurate information on PVC and DEHP while refusing to notify shareholders of the new data and market trends away from PVC use in medical devices,” said Sanford Lewis, the attorney who sent the letter to the SEC on behalf of the shareholders. “In addition to ordering updated and corrected disclosures, we are asking the SEC to direct the company to resubmit the 1999 shareholder resolution on PVC and DEHP to a vote in 2002, due to the misleading information the company published in its opposition statement to shareholders.”
Among the important scientific and policy developments that the shareholders assert Abbott has failed to disclose are:
A statement by the U.S. National Toxicology Program’s (NTP) Center for the Evaluation of Risks to Human Reproduction on DEHP, in which an independent panel expressed “serious concern that exposure [to DEHP] may adversely affect male reproductive tract development. (emphasis added)”A recent risk assessment of DEHP developed by the Chemical Inspectorate of Sweden, representing the European Commission, concluded that efforts should be undertaken to reduce DEHP exposures from medical devices because of health impact concerns.In March 2001, the California Medical Association passed a resolution that strongly urges all hospitals to phase out their use of PVC products that contain DEHP in neonatal intensive care units (NICUs) and encourages the use of commercially available alternatives. As of 1999, approximately 170 California hospitals treated neonatal intensive care patients.Both NTP and the U.S. Environmental Protection Agency have officially identified dioxin as a known human carcinogen.Decisions by Abbott competitors (e.g., Baxter Healthcare and Corpak) to develop non-PVC products, and Abbott customers, including group purchasing organizations, to express a preference for non-PVC products in purchasing contracts.The institutions represented in letter about Abbott to the SEC are the Retirement Plans for the Employees of the Sisters of Mercy Regional Community of Detroit; Ancilla Domini Sisters; Congregation of St. Agnes; Catholic Healthcare West; Trillium Asset Management; General Board of Pension and Health Benefits, United Methodist Church; Ursuline Sisters of Mount Saint Joseph; Missionary Oblates of Mary Immaculate; and the Catholic Foreign Mission Society of America (The Maryknoll Fathers and Brothers).
The religious investors are members of the Interfaith Center for Corporate Responsibility (ICCR), an association of 275 Protestant, Roman Catholic and Jewish institutional investors, including national denominations, religious communities, pension funds, endowments, hospital corporations, economic development funds and publishing companies. ICCR and its members advocate for companies to be socially and environmentally responsible. Each year ICCR-member religious institutional investors sponsor over 100 shareholder resolutions on major social and environmental issues. The combined portfolio value of ICCR’s member organizations is estimated to be $110 billion. More information can be found at www.iccr.org.
Health Care Without Harm is an international coalition with 300 member organizations in 27 countries, working to transform the health care industry so that it is no longer a source of environmental harm. To learn more about HCWH, visit www.noharm.org.
For more information contact: Sanford Lewis, Attorney, (781) 894-0709Charlotte Brody, RN, Health Care Without Harm, (703) 237-2249 ext. 26