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

Published, Fall 2002

Long a focus of our advocacy efforts, EMC has converted words into action with the appointment of an independent woman to its board of directors this summer. Previously, EMC’s board was insider-controlled and exclusively the realm of white men. Earlier this year Walden co-led two shareholder resolutions at EMC, the company’s first shareholder-sponsored ballot items, on increasing board diversity and board independence. The first garnered support from about one third of investors; the latter passed with 56 percent of the shareholder vote! EMC has committed to adding still another independent director in coming months.

Walden withdrew a shareholder resolution at Cardinal Health when it committed to phase out the sale of mercury-containing medical devices. Mercury is a neurotoxin that has particularly hazardous impacts on developing fetuses and young children. Cardinal agreed to phase out the distribution of mercury thermometers to its Medicine Shoppe pharmacy chain. With this commitment, Walden estimates that more than 85 percent of pharmacy chain stores have phased out mercury thermometers or are in the process of doing so. We are encouraged by the recent passage of a U.S. Senate bill (S. 351) that would phase out sales of mercury thermometers and hope for companion legislation by the House.

Even though IBM appealed successfully to the Securities and Exchange Commission (SEC) to block a shareholder resolution co-filed by Walden on computer recycling, the company met with us and other investors to convey its strong commitment to this issue. IBM described its efforts to recover most of its leased computers and in-house equipment and reported that commercial customers often use third parties for recycling their equipment. IBM also has a unique program for consumers to pay $30 to have their computers recycled. All in all, we believe that a majority of IBM’s end-of-life inventory is recycled. Walden is encouraging IBM to analyze just how much is recycled and to set a goal, as well as to monitor the standards and practices of its commercial recyclers.

Two widely followed annual analyses on best corporate practices have been released in recent months, Working Mother’s “100 Best Companies for Working Mothers” and Fortune’s “Best Companies for Minorities.” Twenty-two companies commonly held in the portfolios of Walden clients were recognized as leaders on work/life policies and programs and for advancing women in management by Working Mother. These included 5 of the top 10: Bank of America, Bristol-Myers Squibb, Colgate Palmolive, Fannie Mae and IBM. Thirteen of Fortune’s top 50 firms for hiring and advancing minority employees are also widely held in Walden client portfolios. Led by African-American chief executive Franklin Raines, Fannie Mae ranks best in both groups and is an inspiring model of what can be achieved when companies are determined to shatter barriers to advancement. Fully 40 percent of Fannie’s top-earning employees (highest quintile) are women, and 20 percent of the 50 highest paid are people of color. Also, one third of Fannie Mae’s 18-member board of directors are women or people of color.

A New Direction

Walden is working closely with the Interfaith Center on Corporate Responsibility (ICCR) to learn more about how multinational companies with operations in Africa are responding to the HIV/AIDS pandemic. In South Africa alone, one in five people between the ages of 15 and 49 may carry the AIDS virus, according to UNAIDS, a coalition of six United Nations agencies. Companies in South Africa are under pressure from health officials worldwide to provide medicines to infected employees and to provide preventive education to those who are at risk. Incredibly, investor concern about the human and economic impact of HIV/AIDS has prompted the Johannesburg Stock Exchange to consider requiring listed companies to report infection rates among employees and to detail their initiatives to combat the illness.

Walden wrote dozens of the largest U.S. and global employers in Africa and nearly half have responded to date. In 2001 the Coca-Cola Africa Foundation and UNAIDS entered into a three-year partnership. The company provides health care coverage for its employees such as free testing and counseling on a confidential basis and full medical coverage, including antiretro viral drug treatment. AIDS awareness and prevention training are integral components of Coca-Cola’s programs. In a groundbreaking partnership, the Coca-Cola Africa Foundation just joined with Coca-Cola’s 40 bottlers in Africa to greatly expand the number of employees eligible for anti-retroviral drug and other health benefits. Likewise, the BP Africa Region Policy on HIV/AIDS includes education, training, medical help, and counseling. BP collaborates with UNAIDS, regional governments, trade unions, and non-governmental organizations, as well as pharmaceutical companies to increase drug accessibility.

To be sure, we are immersed in a seemingly endless flood of bad news these days. The companies above remind us of continuing progress and give reason for hope. –H.Soumerai