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Social Research and Advocacy in Action Published, July 5, 2006
Somewhat like professional sky divers, or rodeo clowns, our work as shareholder advocates often comes with an adrenaline rush. These occur on the cusp of a breakthrough with a company or when addressing our fellow shareholders at a company’s annual general meeting. On the Cusp This season we have met with many companies on the brink of modifying their programs or policies to reflect more robust environmental or social planning. After many years of discussion with Walden and other shareholders, Wal-Mart decided to post on its website its full Equal Employment Opportunity data, known as its EEO-1 report, information that nearly all companies are required to collect by law. Wal-Mart’s posting places the company in a leadership position for disclosure on this issue.In the past, we have been pleased to report on the extraordinary leadership that Colgate Palmolive has shown in developing comprehensive HIV/AIDS programs in sub-Saharan Africa and throughout Asia. This year Colgate has rolled out programs in Latin America and Central Europe, and expanded initiatives in other regions. Colgate’s program focuses on education, prevention, treatment, and local partnerships. We continue to encourage the company to more actively share its work, to provide encouragement and guide others.Walden initially contacted insurer Chubb Corporation a few years ago, hoping to better understand how it is incorporating climate change into its business model. We met with top management again this spring and were delighted to see the extensive thinking the company has done since our first conversations. No longer viewing climate change as something that can be excluded from its insurance policies, it is actively considering how it impacts business, both in existing policies and in the future. Chubb has also agreed to develop a sustainability report that will include a discussion of its climate change policies, along with other social and environmental issues.Donaldson’s CEO William Cook came to visit us in Boston, initially to discuss the company’s commitment to equality in the workplace. At our meeting, we discussed a wide range of additional social and environmental issues and learned more about Donaldson’s commendable filtration systems. We were impressed to have the CEO himself follow up, looking for greater insight on the social and environmental issues we had raised. The story of a company being open to its shareholders repeated itself when we met with top management, and took a plant tour, at the industrial motor manufacturer Baldor Electric in Fort Smith, Arkansas. We encouraged the company to look seriously into developing a sustainability report, particularly because of the energy efficiency emphasis of the motors it manufactures. We were also pleased to hear of its recent decision to amend its employment nondiscrimination policy to include sexual orientation.Dry Mouth at the Annual Meeting The Home Depot annual meeting was one for the history books, and is therefore described in greater detail on page two. Other annual meetings ran along a more traditional course.We traveled to Leggett & Platt’s meeting, held in Carthage, Missouri, to present a resolution requesting that the company modify its nondiscrimination policy to include sexual orientation. Although Leggett & Platt has not yet amended its policy, we were heartened by the strong show of investor and employee support, seen both through the 25 percent vote in favor of the resolution and in comments made to us by others in attendance. In what has become an annual tradition, we again attended TJX’s annual shareholder meeting. We took this opportunity to pose a few questions to the board and to push the company to respond to the Carbon Disclosure Project (CDP) questionnaire. The CDP is a coordinating body for more than 210 institutional investors that are seeking greater information on corporate planning in response to climate change. However, we primarily attended the TJX meeting to commend the company on the great strides it has made in its vendor standards program. Over the last few years, it has brought on additional staff members, rounded out its supplier code of conduct, and greatly increased its discussion of supply-chain issues on its website. — M. Benton
SUMMARY OF WALDEN'S 2006 RESOLUTIONS Sponsoring shareholder resolutions is one of several options available to investors seeking a voice in company practices. Historically, much of Walden’s success in advocating for greater corporate social responsibility has come from constructive dialogues with companies over many years, entirely outside the resolution process. Nonetheless, shareholder resolutions can be an important tool for change, as illustrated in this summary of the 2006 results. ENVIRONMENTAL IMPACT Climate Change We again asked global warming skeptic ExxonMobil*—an industry outlier—to explain and defend its public position on climate change. The company complied, producing a report entitled “Tomorrow’s Energy.” While we were pleased that ExxonMobil has moved toward the scientific consensus on climate change, concerns continue that the report expresses doubts about the extent of the human impact on climate change, and does not show the company to be planning for a range of future energy scenarios. Walden was also a signatory to a letter, signed by a number of institutional investors, requesting an in-person meeting with the ExxonMobil board of directors. Recycling PepsiCo and Coca-Cola have committed to working with their industry group to encourage the adoption of national goals for beverage container recycling. Given these commitments, we withdrew our resolutions at both companies requesting a report on beverage container recovery and recycling efforts. EQUALITY Inclusive Non-Discrimination Policies AmSouth, C.R. Bard, ExxonMobil* and Leggett & Platt were asked to adopt more inclusive employment nondiscrimination policies. C.R. Bard’s board discussed the issue and decided to modify its policy to be inclusive of sexual orientation. In its eighth year, the resolution at ExxonMobil was supported by 34 percent of shareholders, 5 percent higher than the previous year. The high vote is a reflection of ExxonMobil’s position as one of two remaining Fortune 100 companies without sexual orientation in its nondiscrimination policy, as well as its unique distinction as a firm that removed protections against sexual orientation discrimination for Mobil employees when Exxon and Mobil merged in 1999. 2006 was the first year the resolution was submitted at Leggett & Platt, making the 25 percent vote received at this manufacturing company all the more remarkable. We are disappointed that AmSouth has chosen to withhold the vote totals from the resolution and does not plan to release them until August. Equal Employment Opportunity (EEO) Disclosure Resolutions at Donaldson, The Home Depot, and Wal-Mart* asked for diversity reports that include comprehensive EEO statistics as a means to increase accountability with respect to hiring and promoting minorities and women. We withdrew the Donaldson resolution, having received its diversity statistics and having met with top management to discuss diversity programs and policies. Shareholders voted on the Home Depot resolution, delivering an issue-high level of support of about 36 percent, 6 percent higher than in 2005. Wal-Mart, meanwhile, has taken on a leadership role in expanding web-based reporting, posting its comprehensive diversity data on its website, along with explanatory information. CORPORATE GOVERNANCE Political Contributions The BellSouth* resolution sought increased company transparency on political contributions. The company is considering, but has not yet committed to greater disclosure. Twelve percent of shareholders voted for this resolution. SUSTAINABILITY REPORTING Resolutions at AT&T, Chubb, and Illinois Tool Works*, requesting that they prepare sustainability reports detailing their social and environmental programs, policies, and impacts, were withdrawn. AT&T, given its recent merger with SBC, has agreed to produce an interim report and to work toward more robust reporting in the future. Illinois Tool Works has increased the amount of social and environmental reporting on its website and is working toward developing a full report. The insurance company Chubb has committed to developing its first sustainability report and has assigned an internal staffer to lead its efforts. Management also met with investors for an extensive conversation on a range of climate change related issues, including insurance polices, risk models, new business opportunities, and public policy. *In filing shareholder resolutions, whether as the leading proponent or an active participant, Walden often collaborates with other concerned investors to strengthen our influence on managements. Of the 14 resolutions described above, five were led by other investors (listed in order of appearance in chart): Christian Brothers Investment Service, New York City Employees’ Retirement System, Sisters of Charity of St. Elizabeth, Domini Social Investments, and F&C Asset Management. |
