Advocacy Update for 2003(A)
For the remainder of the 2002-2003 shareholder season (which roughly parallels an academic year), Trillium Asset Management has 14 shareholder proposals addressing a wide range of environmental and social justice concerns, and is engaged in dialogue with several other companies in which a resolution has not been filed. As of early February, agreements have already been reached with ChevronTexaco and TXU Energy that have allowed us to withdraw proposals at those companies.
BackgroundMany factors go into choosing which resolutions and dialogues to initiate or support: client concerns, coordination with key allies (such as the Interfaith Center on Corporate Responsibility or nongovernmental organizations like Amnesty International), staff recommendations, and input from our board of directors. As we typically face an overabundance of choices each year, we revert to our core mission to help us order our priorities: the triple bottom line of ecology (healthy environment), economy (vibrant commerce) and equity (social justice), that is reflected in the delicate tri-petaled flower that gave us our name and logo. Trillium Asset Management is the “lead” or sole filer for about one-third of the resolutions that we are sponsoring or co-sponsoring this year. In the shareholder advocate community, a “lead” filer is the shareowner within a coalition who acts as dialogue coordinator between a resolution’s cosponsor and the corporation. By prearrangement in some cases, a lead filer will make the call as to whether a proposal should be withdrawn, should common ground with a company be found in the course of dialogue. In this article, we highlight the proposals in which we are the lead filer.
EcologyWorking with the United Methodist Church General Board of Pensions and Health Benefits, we are pressing Pacific Gas & Electric to produce a report on the economic costs associated with its greenhouse gas emissions, and the benefits of reducing them. PG&E operates two of Massachusetts’ dirtiest power plants. We are also partnering with Healthlink, a Boston-area community-based nonprofit. We have filed a similar resolution with ConocoPhillips.We are in dialogue (no resolution) with Ecolab, a cleaning products company, to explore whether the company might endorse the CERES Principles. The CERES Principles commit their endorsers to a higher ethic of environmental responsibility and to the production of an annual, standardized, and public environmental report which is widely recognized as the standard for comprehensive environmental reporting. CERES (the Coalition on Environmentally Responsible Economies) was founded by Trillium Asset Management President Joan Bavaria in the aftermath of the Exxon Valdez and Bhopal disasters; the coalition uniquely brings together institutional investors, company endorsers and nongovernmental organizations.
We have also approached Cisco Systems about preparing a sustainability report based on the Global Reporting Initiative guidelines. The GRI is an offshoot of CERES and the United Nations Environment Programme which includes social and economic, as well as environmental, reporting indicators. Over 150 companies from around the world have based their reports on the GRI, which has been embraced by legislators and regulators in Europe and South Africa.
We are in dialogue with Pepsico and Coca Cola on the impact of the company’s water usage on it’s the environment and the communities in which it operates, and in particular those communities affected by water scarcity. We expect to do much more engagement with companies on the emerging issue of water scarcity and corporate control of water supplies.
We have filed a shareholder proposal at Dow Chemical calling on the company to report to shareholders on its plans to remediate existing dioxin contamination sites and to phase out products and processes leading to emissions of persistent organic pollutants and dioxins. The surrounding environs of Dow’s Midland, Michigan headquarters are contaminated with dioxin from the company’s facilities. Dioxin levels detected in the floodplain downriver have been found as high as 80 times the state’s residential cleanup standard.
We will be continuing to press Avon Products on potentially harmful ingredients in the company’s products such as phthalates. Phthalates are a class of chemicals that have been linked to reproductive birth defects in male infants. We would like to see Avon follow the lead of several smaller cosmetic companies that have removed phthalates from their product lines.Since 2002, Trillium Asset Management has been work with People for the Ethical Treatment of Animals to persuade McDonalds to extend its farm animal welfare standards to its overseas operations. In 2002, Sir Paul McCartney wrote McDonald’s top shareholders on behalf of PETA and Trillium Asset Management in support of this campaign.
EquityIn support of the Coalition of Immokalee Workers, we are pressing YUM! Brands (the parent of Taco Bell and other fast food chains) to improve wages and working conditions for farm workers and to accept responsibility for the impact of its purchasing policies throughout its broader supply chain. Taco Bell is the target of a highly visible boycott protesting the “sweatshop” conditions tolerated by farm workers who pick tomatoes for 6L, one of its produce suppliers. Tomato pickers make about $7,500 per year — the same wages since 1978 – and receive no health insurance, sick leave, paid holidays, vacation or pension.Since 1995, Trillium Asset Management has been a leader in promoting corporate sexual orientation nondiscrimination policies. We have worked with the nonprofit Equality Project to co-file three such resolutions this year (TXU, J.C. Penney, Emerson Electric). Unfortunately, the Emerson Electric proposal failed in its third year to receive enough support from shareholders to qualify for resubmission in 2004.We have joined members of the Interfaith Center on Corporate Responsibility in filing a proposal at Wal-Mart calling for the public disclosure of EEO-1 data, which details workforce composition by race, sex, ethnicity and rank. Wal-Mart has faced a number of discrimination suits in recent years.
EconomyThis year, we helped to facilitate a shareholder proposal at General Electric Corporation calling on the company to reign in excessive executive pay packages. This resolution is coordinated by Responsible Wealth, a project of the advocacy group United For A Fair Economy.
In coalition with other social investment firms and members of the religious shareholder community, we have been in dialogue with Procter & Gamble to encourage the company to begin sourcing its coffee from small-farm cooperatives that participate in Fair Trade, a program working to provide growers, workers and artisans a fair price for their products in international markets. Coffee prices are at their lowest level since 40 years, causing a global humanitarian crisis for 25 million coffee farmers in Latin America, Asia and Africa.
2003 SHAREHOLDER ENGAGEMENT PRIORITIES of Trillium Asset Management ECOLOGYSustainability ReportCooper Industries, Ecolab (dialogue), YUM Brands (dialogue)Produce a sustainability reportPCB CleanupGeneral ElectricDisclose costs of delaying PCB cleanupGreenhouse gas emissionsConoco PhillipsReport on the operating, financial and reputation risks to the company associated with greenhouse gas emissions from its operations and products.PG&E (in collaboration with the General Board of Pensions of the United Methodist Church)Report on the economic risks associated with emissions of carbon dioxide, sulfur dioxide, nitrogen oxide and mercury emissions, and the economic benefits of committing to substantial reduction of those emissions.Hydroelectric powerIdacorp (dialogue only)Increase transparency regarding relicensing of Hells Canyon Complex Nuclear wasteAmerenReport on risks of interim storage of nuclear fuel rodsDioxinsDow ChemicalReport on feasibility of phasing out dioxins from production processes and cleaning up areas of dioxin contaminationWaterPepsi and Coca Cola (dialogue)Environmental and social impact of water usageAnimal standardsMcDonaldsExtend animal welfare standards overseasEQUITYHuman rightsChevronTexaco(withdrawn)Adopt human rights policy upholding the principles of the Universal Declaration of Human RightsWorker RightsYUM! Brands(dialogue)Accept supply chain responsibility for workers and environmentEqual Employment OpportunityWal-MartDisclose EEO-1 form (details workforce composition by race, sex and rank)Access to affordable drugsPfizerProvide a policy to provide affordable drugs to Africans for HIV/AIDS, TB and MalariaSexual orientationEmerson Electric, TXU, J.C. PenneyImplement sexual orientation non-discrimination policyECONOMYExecutive CompGeneral ElectricReign in excessive executive pay packagesFair trade coffeeProcter & Gamble (dialogue)Begin sourcing from Fair trade coffee sources