2006 Advocacy Roundup(A)
(Note: all of the Trillium shareholder proposals in this article can be viewed here.)
Earlier this year in these pages, my colleague Steve Lippman outlined our advocacy agenda for 2006 in “New Year’s Resolutions.” We’ve happy to report a lot of progress toward our goals, particularly on climate change, sustainability reporting and political contributions.
Global Climate Change. We took the lead on resolutions at Anadarko Petroleum and Dominion Resources addressing those companies’ strategies for reducing greenhouse gas emissions. Both were successful in different ways. Anadarko agreed to annually disclose its greenhouse gas emissions, marking continued progress from where the company was when we began engaging in 2003; we therefore withdrew the proposal. Dominion, the Richmond-based electric power provider, still didn’t understand why shareholders want to see a deeper analysis of its strategy for living in the inevitably carbon-taxed future, even though its industry emits 40% of the U.S.’s carbon emissions and 10% of global carbon emissions. Now that more than 22% of its shareholders supported our resolution (co-filed by the New York City pension funds), we’re more likely to get the report we’re requesting. (Twenty-two percent may seem low as a measure of presidential popularity, but in our context, it’s practically a landslide.)
A successful “sustainability reporting” resolution at American International Group (AIG) also paid big dividends in this area. On May 15, AIG became the first U.S. insurance company to adopt a policy to reduce the risks of climate change through a variety of instruments and investments. (See Steve Lippman’s “Insuring Against Climate Change” in this issue.) We joined with the Service Employees International Union to press Wells Fargo to join other banks that have begun reporting on their environmental and social policies, and were particularly eager for Wells to report how it is dealing with the hot topic of climate change. Unfortunately, the SEC allowed Wells Fargo to keep the resolution off its ballot on procedural grounds.
Sustainability Reporting. In addition to the AIG breakthrough, resolutions that Trillium co-filed at Chubb and Illinois Tool Works bore vital (if wonkish) fruit; ITW will to produce its first sustainability report, and Chubb agreed to study the feasibility of producing one. While we successfully negotiated all the companies where we filed sustainability reporting resolutions, other filers got record support for these resolution, including a near majority 48% at Terex Corporation. We’re working with other filers to tip those companies still on the fence into joining the increasing number of companies issuing sustainability reports. The reports are essential accountability mechanisms in ensuring that companies address social and environmental issues that relate to their business.
Equal Employment Opportunity. For a number of years, shareholders have aided equal employment advocates by pressing companies for more transparency about their workforce demographics and their programs to increase diversity and dismantle glass ceilings. Home Depot and Wal Mart are two such companies that have received numerous proposals from investor coalitions calling for the release of EEO-1 data (a snapshot of the workforce broken down by sex, race and employment level).
After many years of prodding, this spring Wal Mart finally released its entire EEO-1 data sheet on the Walmart Facts Website, “setting a new standard in corporate transparency not only for retailers but for all Fortune 500 companies,” according to the Interfaith Center on Corporate Responsibility. Sr. Barbara Aires, who led the ICCR shareholder coalition, commented “As the largest publicly traded company in the U.S. with the nation’s largest workforce, Wal-Mart today raises the bar for all companies, both privately and publicly held.”
So take note, Home Depot! Earlier this century, the retailer reneged on a pledge to shareholders to provide EEO-1 data, prompting the resumption of shareholder resolutions in 2005 and 2006. The 2006 vote – 36% — is the highest ever to date on this topic. Most shareholder resolutions calling on companies to expand their nondiscrimination policies to include protections for sexual orientation and/or gender identity don’t come to a vote, because most companies have simply responded by implementing the proposal. ExxonMobil is the famous exception, having committed in 1999 to actually turning the clock back within the freshly merged leviathan by closing the door to any further same-sex domestic partner benefits, which Mobil had offered. This year’s resolution at ExxonMobil garnered 35%, it’s highest level to date. A first-year resolution at Expeditors International received 32%. Since the threshold for re-filing a first-year resolution is 3%…we may yet meet again. We humbly withdrew our sexual orientation policy resolution at Halliburton after submitting an improperly dated filing document, but our humility will likely fade by the 2007 filing deadline this autumn. Many companies quietly have changed their policies in between filing deadlines, so we’re also keeping our fingers crossed.
Political Contributions Accountability. Yet another resolution bit the dust at Southern Company. We had asked for semi-annual public reporting on Southern’s political contributions to candidates, parties, political committees, and “527” groups (which can range from groups like the Swift Boat Vets to quasi-party groups like the Democrats’ or Republicans’ Governors Associations). After a respectable 11% vote last year, Southern had reconsidered its stance on disclosure and has now committed to maintaining control of all political donations at the parent-company level, and to posting all political contributions (including 527s) on its web site. Early on in the shareholder season, we withdrew a resolution at Eli Lilly after the company agreed to strong new board oversight and disclosure of its political contributions.
Environmental Health & Justice. Our resolution at Chevron concerning their potentially enormous environmental liabilities in Ecuador drew about the same support as last year: 9%. The lawsuit stems from the irresponsible drilling practices of Texaco in the ecologically hypersensitive rainforest regions of the country (Texaco was acquired by Chevron in 2001). Area residents have also fallen victim to a remarkable array of illnesses and cancers from relying on the petro-contaminated rivers and streams. While we are disappointed that the vote didn’t increase, there’s no question that overall, Chevron is feeling the heat on Ecuador. New York Times columnist Bob Herbert excoriated the company last October:
Please welcome the latest entry to the Chutzpah Hall of Fame: the mighty Chevron Corporation. ….Officials at Chevron do not see [the health consequences of the Ecuadorian pollution] as their problem. They will tell you that they’ve cleaned up any mess they might have made, and then some. And they will deny to their dying breath that they have harmed anyone.*
Our co-filers at Chevron this year were Amnesty International, New York State Common Retirement Fund and Boston Common Asset Management.
Following a withdrawal of last fall’s resolution at Johnson & Johnson concerning the impact of new European cosmetic safety requirements, we’ve taken part in our first multi-shareholder meeting with the company. Among other steps, we’re asking the company to sign the Compact for Safe Cosmetics.
Healthcare. Last but certainly not least, the resolution that we co-filed with members of ICCR at Pfizer (requesting it to reinstate a former policy of limiting price increases to the cost of inflation) drew 7% this year. In this sector, we’re also in dialogue with Merck about their political donations policy. We regret to report that our resolution at Avon Products requesting greater transparency related to their breast cancer philanthropy failed to gain enough votes for resubmission, but are looking forward to pressing our case at a meeting scheduled for this summer.
* “Rainforest Chernobyl,” by Bob Herbert, The New York Times, p. A21.