SOCIAL TOPICS (Archive): HISTORY OF WALDEN ASSET MANAGEMENT/SRI

Published, Fall 2001

       By Steven Heim and Heidi Soumerai

       We had a feeling that EMC did not relish the opportunity to connect with shareholders at its annual general meeting (AGM) last May. But the company’s attitude became blatantly obvious when we attended the AGM in May, only to find that open microphones were replaced with paper and pen to allow for only company-picked inquiries in the shareholder Q & A session. We did not know what steps the company would take to obliterate the traditional AGM, attended this year by over 2000 shareholders, until a Massachusetts bill was introduced during the Senate recess in August.

       EMC was a key corporate supporter of Bill 1792, that included a provision allowing companies to hold Internet-based meetings in lieu of face-to-face annual meetings. Walden and Boston-based United for a Fair Economy are leading an effort of concerned investors to oppose the provision, a precedent that would allow companies to avoid in-person accountability to shareholders. The provision was removed from the bill, but expecting its return, Walden continues to advocate against virtual-only meetings. Meanwhile, we are holding conversations with EMC on several matters of corporate governance and diversity.

       In June, nearly one quarter of Kroger shareholders did not support management’s recommendation to vote against a Walden-led resolution asking the company to label genetically engineered foods sold under Kroger’s name – the biggest show of concern yet by U.S. shareholders on this issue. Over 15 percent voted in favor of the resolution and about 8 percent abstained. Walden hopes the vote will spur Kroger, the largest U.S. supermarket company, to dialogue seriously with Walden and our Interfaith Center for Corporate Responsibility (ICCR) partners.

       We also continue to tackle the issue of genetically engineered food in the international arena. In May a Walden representative questioned management of Aventis SA at its AGM in France. We encouraged the company to sell quickly its Aventis CropScience unit, the developer of StarLink corn. StarLink corn is a genetically engineered variety that created havoc for the U.S. food supply after it was discovered in taco shells and other corn products last fall (see sidebar).

       At a meeting with Wal-Mart in early September, Walden joined other social investment managers and the Pride Foundation in encouraging the company to amend its nondiscrimination policy to explicitly include sexual orientation and gender identity. In the past decade, Wal-Mart has faced several lawsuits by employees alleging discrimination based on sexual orientation.

       Overseas, Walden is asking Bulgari, an Italian jewelry retailer and a holding in the Walden/BBT International Social Index Fund, about its sourcing policies and supplier standards related to the conflict diamonds controversy. Conflict or “blood” diamonds are crucial in funding and prolonging brutal wars in Angola and Sierra Leone, and they constitute at least 4 percent of the $7 billion annual market for diamonds. We are also continuing a dialogue with the Spanish energy firm, Repsol, most recently on its intentions to drill in Colombia on territory inhabited by the U’Wa and other indigenous communities. Walden previously had significant involvement in a shareholder campaign against Occidental Petroleum for exploring in sacred U’Wa land despite a serious risk of mass suicide. It halted only after failing to unearth the anticipated oil bonanza.

       As reported in our last Values cover feature on child labor, Walden is exploring how its active membership in the Child Labor Coalition (CLC) can help maximize corporate awareness on the issue of exploitative child labor. Recent exposés on the plight of child laborers on West African cocoa plantations and a proposed Senate bill to create a child-labor-free label for U.S. chocolate products, prompted a meeting between CLC, including Walden, and the Chocolate Manufacturers Association (CMA). We are hopeful that this collaboration will become a constructive forum to address this specific concern.