Ford Motor Company – Political Contributions
RESOLVED
Shareholders of Ford Motor (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:
- Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
- Monetary and non-monetary political contributions and expenditures not deductible under section 162 (e)(1)(B) of the Internal Revenue Code, including but not limited to contributions to or expenditures on behalf of political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code and any portion of any dues or similar payments made to any tax exempt organization that is used for an expenditure or contribution if made directly by the corporation would not be deductible under section 162 (e)(1)(B) of the Internal Revenue Code. The report shall include the following:
- An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above;
- Identification of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure; and
The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the company’s website to reduce costs to shareholders.
SUPPORTING STATEMENT
As long-term shareholders of Ford Motor, we support transparency and accountability in corporate spending on political activities. These activities include direct and indirect political contributions to candidates, political parties or political organizations; independent expenditures; or electioneering communications on behalf of a federal, state or local candidate.
Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with recent federal ethics legislation. Absent a system of accountability, company assets can be used for policy objectives that may be inimical to the long-term interests of and may pose risks to the company and its shareholders.
Ford Motor contributed at least $1.7 million in corporate funds since the 2002 election cycle. (CQ’s PoliticalMoneyLine: http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.)
However, relying on publicly available data does not provide a complete picture of the Company’s political expenditures. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In many cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political contributions, including payments to trade associations and other tax exempt organizations. This would bring our Company in line with a growing number of leading companies, including Hewlett-Packard, Aetna and American Electric Power that support political disclosure and accountability and present this information on their websites.
The Company’s Board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.
Trillium Co-files Shareholder Proposal at Whole Foods Markets
October 14, 2009 — Trillium Asset Management Corporation has joined the union conglomerate Change to Win and Hermes, the British investment company, in filing a binding bylaw proposal at Whole Foods Markets (NASDAQ: WFMI). The bylaw change would mandate that the Chair of the Board of directors be “independent” of the company, which would exclude any current employees such as the current Whole Foods Board Chair and CEO, John Mackey.
Mackey, the founder of Whole Foods, has been a controversial leader. His pseudonymous internet postings denigrating the Wild Oats grocery chain, later acquired by Whole Foods, led the Federal Trade Commission to sue to block the acquisition of Wild Oats in 2007, and triggered an investigation by the Securities and Exchange Commission. He has antagonized many customers and shareholders with his outspoken anti-union views, and his August 2009 op-ed piece in the Wall Street Journal that attacked large-scale healthcare reform provoked a boycott of the chain. The resolution states that having the positions of CEO and Board Chair held by the same person “may not serve the best long-term interests of shareholders,” noting that one of the Board’s duties is to evaluate CEO performance.
The resolution also points out “an urgent need for objective and independent Board evaluation of our Company’s strategic plan, as Whole Foods trailed the S&P 500 and Dow Jones Food Retailers & Wholesalers Index for the three-, four- and five-year periods ending September 21, 2009,” and notes the critical role that Chair plays in shaping the Board’s work.
The entire resolution can be viewed here.
What Goes Up Doesn’t Always Go Up
The latest disaster in the financial markets has once again shown that some of the biggest risks investors face derive from the excesses of free markets themselves. This time it was unregulated lending, leverage and speculation. In 2000 it was over-optimistic and at times corrupt Wall Street analysts, gobbling up creative corporate accounting that massaged income statements to show profits where there were none.
Some of the other systemic risks embedded in financial markets are barely on the radar screen of most investors. These range from unregulated pollution causing global warming, to the worrisome increase in nuclear proliferation during the Bush years. Preventable increases in sea levels might warrant more investor attention than, say, which large-cap growth manager should be hired or fired. There might not have been a worse piece of news for long-term investors over the last decade than Pakistan’s A.Q. Khan passing on nuclear secrets to other countries, yet there is no widespread investor effort to reduce the nuclear threat.
Why don’t investors pay more attention to these massive risks, and try to do more to reduce them? The answer lies in an almost totemic belief that markets go up in the long run. In fact, financial asset values don’t inevitably rise, even over twenty and thirty year periods. Market outcomes are conditioned by the public and private governance systems in which they operate. By influencing these governance systems, investors working together can reduce market risk and positively influence long-term market outcomes. To do so, however, will require accepting that markets do not magically inflate, and that investor passivity is in fact a very risky strategy.
Some large institutional investors are starting to wake up to the latent risks in the system and their role in mitigating them. Investors responsible for over $15 trillion in assets have signed on to the UN Principles for Responsible Investment, which state that ‘environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios.” Investors with over $7 trillion in assets (including Trillium Asset Management Corporation) have joined the Investor Network on Climate Risk (INCR), which has been pushing for more analysis and disclosure of the potential impact of climate change on corporate performance. Capitalizing on the regime change in Washington, INCR’s members are advocating strongly for improved public policy to ensure global emissions reductions.
It is an enduring irony, last learned during the troubles of the 1930s and 1960s, that no group has a greater self-interest in vigorous public governance than the investor class. The door has opened for substantial public policy reform not only in the financial sector, but also on other critical issues affecting long-term investor outcomes. These range from energy and the environment, to health care, income distribution, and global security. With the widespread use of mutual funds and other diversifying strategies, virtually all investors large and small have a stake in eliminating environmental, social and governance failures in the service of their long-term portfolio returns. Investors of the world, unite!.
Yes, We Can, Too
Everyone, from the progressive Left to “Obamican” crossovers, has high hopes for the new administration. Social investors are no exception. We share the expectation that the Obama administration will take a hands-on approach to many of the problems we’ve addressed for years, including climate change and other environmental priorities, predatory lending, inadequate regulation of the financial markets and much more. There’s a subset of policy reforms, however, that are being championed more or less exclusively by the social investing community, and those are the subject of this article. What follows is a brief summary of some of the policy reforms we’re audaciously hoping (and lobbying) for to remove specific barriers to the advancement of social investing.
Risky Business
On December 11, more than 60 social investors (including Trillium Asset Management Corporation) wrote to President-elect Barack Obama seeking the restoration of the right of investors “to propose and vote upon resolutions asking a company to evaluate how specific risks may affect the company’s business…. These include the kind of credit risks associated with the mortgage crisis, as well as an array of environmental and social issues which we believe may have large financial implications, e.g., climate change and product toxicity.” The appeal stems from the Securities and Exchange Commission’s Bush-era stand against shareholder resolutions requesting that a company evaluate the risk related to a line of business or an emerging social or environmental trend. (The SEC arbitrates between companies and shareholder resolution filers when companies challenge the submission of resolutions based on any of 14 technical and substantive rules. Corporations have been arguing that proposals that address risk violate the “ordinary business” exclusion.)
For example, in 2006 the SEC disallowed, on “evaluation of risk” grounds, a resolution at Ryland Group that was virtually identical to a proposal that had passed muster at Ryland the year before. Another example of the use of the head scratch-inducing “evaluation of risk” exclusion was the dismissal of a proposal at Washington Mutual earlier this year asking the company to discuss its potential financial exposure as a result of the mortgage securities crisis. The number of such exclusions as violations of the “ordinary business” rule has increased significantly in the last several years, as have inconsistent applications of the rule.
Making the World Safe for Pension Fund Activism
In October, the Department of Labor (DoL) issued two interpretive bulletins at the prodding of the U.S. Chamber of Commerce. One modified its longstanding view that pension plans may engage in shareholder advocacy without violating their fiduciary duties as defined by the Employment Retirement Income Security Act. Because the letter is confusingly written, the extent to which the DoL is seeking to impose stricter constraints on shareholder advocacy by pension funds is unclear. One thing is clear, though: the bulletin is inconsistent with prior DoL regulations. The Social Investment Forum is calling upon the new administration to discard the bulletin and clarify that existing practice has not changed.
The second bulletin declared that DoL would not, from now on, consider environmental or “so-called ‘green’ companies” to be acceptable economically targeted investments (ETIs). But why? In a letter to the DoL sent in December, the Social Investment Forum asks, “Why did the Department include an example that seems so out of place, arguably irrelevant, in a discussion of ETIs? Is it, as contemplated by one commentator, a suggestion of a broader intent behind the ETI bulletin? Or is it so far afield that it should be regarded as an error?” The bulletins are a parting shot from an administration beholden to business interests whose ideology recognizes no value in the consideration of extra-financial factors.
Not Too Much Information
Last summer, the SEC announced the “21st Century Disclosure Initiative,” inviting investors’ comments on the creation of “a comprehensive high-level plan for overhauling the Commission’s current forms-based disclosure system.” A report is due by year-end. While the Initiative is mostly concerned with modernizing the technology of disclosure, Trillium took the opportunity to respond to the SEC’s invitation to comment on any other types of information it should be seeking from companies. We put in a plug for requiring corporate reporting on sustainability issues such as the environment (e.g., risks to business from water scarcity and climate change) and political contributions. Rather than reinvent the wheel, we suggested, the SEC should look at integrating Global Reporting Initiative reports into its filing requirements. (The French, Danish and British governments, as well as the South African stock exchange, already require sustainability reporting from major companies.)
This is consistent with positions we have supported as a member of the $7 trillion Investor Network on Climate Risk (INCR), which promotes better understanding of the financial risks and opportunities posed by climate change. In September 2007, the INCR petitioned the SEC to address the obligations of publicly-traded companies to assess and fully disclose the material economic opportunities and risks from climate change. Senate Banking Committee leaders, Senators Christopher Dodd (D-CT) and Jack Reed (D-RI) also supported the petition in a letter sent to the SEC in December 2007, and language urging the SEC to require companies to disclose their climate risks is included in the Senate Committee on Appropriations report accompanying the 2009 Financial Services and General Government Appropriations Bill.
Along these lines, as we wrote about in the Fall 2008 issue of Investing For A Better World, Trillium has also lobbied the Financial Accounting Standards Board (FASB)to enhance disclosures about loss contingencies by expanding the population of potential liabilities that must be disclosed, requiring more specific information about those potential liabilities, and mandating clear and transparent disclosure formats. (While FASB is not a governmental body, the SEC has designated it as the organization responsible for setting accounting standards for public companies.)
Why Vote? It Only Encourages Them
Why can’t shareholders nominate the board directors who nominally represent them in the governance structure of the corporation? If you answered, “because only the Red Queen could defend the logic of corporate board elections,” that is partially correct. But the root cause is that the SEC says we can’t.
At the end of 2007, in a vote described by former SEC Chairman Arthur Levitt as “probably the most important vote the commission has taken in nearly 15 years,” the SEC Commissioners voted 3 to 1 against allowing shareholders access to management’s proxy statement to nominate corporate directors, the most recent defeat for an idea with strong support from shareholders but fierce opposition from the corporate community. But with such strong backing and a friendlier administration in place, the issue is not dead yet. If the SEC doesn’t reconsider, Congress may do it for them. Richard Ferlauto, director of corporate governance and pension investment at the American Federation of State, County, and Municipal Employees, told RiskMetrics recently that a proxy access provision may be included in compensation legislation or a broader bill to overhaul the SEC.
Yes, We Can Provide Mutual Fund Products
And finally, what does one have to do to get a good set of socially responsible mutual fund options around here? Some federal workers have been asking that question for years because the Thrift Savings Plan, the retirement plan for all federal civilian and armed services employees, currently contains no socially responsible investing options. Thankfully, Congressman Jim Langevin (D-RI) introduced the Federal Employees Responsible Investment Act at the urging of these workers. Now to pry it out of committee.
A Shareholder Bill of Rights?
With new leadership in Washington, the conditions may be right for shareholders to win, and in some cases win back, their rights. Prior to this fall’s stock market meltdown, some were even predicting the passage of a “shareholder bill of rights” – covering executive pay and the right to nominate directors – within the first 100 days of the new Administration. Given the ongoing financial and economic crisis, this is less likely but not out of the realm of possibility. After all, as an investor who personally divested his stock in a company doing business in the Sudan, our new president is certainly sympathetic to at least some of the fundamental ideals of social investing. It’s a new day.
Ford Motor – Report on Political Contributions
RESOLVED
The shareholders of Ford Motor Corporation (“the Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:
1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
2. Monetary and non-monetary political contributions and expenditures not deductible under section 162 (e)(1)(B) of the Internal Revenue Code, including but not limited to contributions to or expenditures on behalf of political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code and any portion of any dues or similar payments made to any tax exempt organization that is used for an expenditure or contribution if made directly by the corporation would not be deductible under section 162 (e)(1)(B) of the Internal Revenue Code. The report shall include the following:
a. An accounting of the Company’s funds that are used for political contributions or expenditures as described above;
b. Identification of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure; and
c. The internal guidelines or policies, if any, governing the Company’s political contributions and expenditures.
The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the company’s website to reduce costs to shareholders.
SUPPORTING STATEMENT
As long-term shareholders of Ford Motor, we support policies that apply transparency and accountability in corporate spending on political activities. Such disclosure is consistent with public policy and in the best interest of the Company’s shareholders.
Company executives exercise wide discretion over the use of corporate resources for political activities. These decisions involve political contributions, called “soft money,” and payments to trade associations and related groups that are used for political activities. Most of these expenditures are not disclosed. The Company has contributed at least $300,000 since the 2000 election cycle. (Center for Political Accountability, http://www.politicalaccountability.net/files/TAFord12-13-06.pdf).
However, its payments to trade associations used for political purposes are undisclosed and unknown. These activities include direct and indirect political contributions to candidates, political parties or political organizations; independent expenditures; or electioneering communications on behalf of a federal, state or local candidate. The result: shareholders, and in many cases, management do not know how trade associations use their company’s money politically. The proposal asks the Company to disclose its political contributions and payments to trade associations and other tax-exempt organizations.
Absent a system of accountability, company assets can be used for political objectives that are not shared by and may be inimical to the interests of the Company and its shareholders. Relying on publicly available data does not provide a complete picture of political expenditures. The Company’s board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.
Shareholders Protect Right to File Resolutions, Lose on Rights for Director Nominations
Late last month, the Securities and Exchange Commission (SEC) closed an opening that had given investors a little more power to nominate directors at publicly traded companies. At issue is whether investors can nominate directors to appear on the company’s proxy ballots mailed out to all shareholders. Shareholders have the right to send out nominations on their own competing proxy ballots, but the costs and logistics of doing so are so onerous that this almost never happens, so advocates for shareholder rights have long sought rules granting them access to nominate directors on the company proxy.
Those advocates won a victory last year when a federal appeals court struck down the SEC’s past rules denying shareholders access to nominate directors on companies’ proxies. In response, the SEC proposed two different changes to its proxy access rules. One option would have granted proxy access for director nominations to shareholders holding more than 5 percent of a company’s shares. The other would restore the rules that deny shareholders proxy access to nominate directors. Sadly, the SEC denied shareholder rights and adopted the second option, although the chairman of the SEC has promised to revisit the issue in the year to come.
There was one bright note in a disappointing decision. In its proposals on proxy access, the SEC posed a series of questions about whether to limit the types of shareholder resolutions that Trillium Asset Management Corporation and our allies rely on every day to prod companies towards greater corporate responsibility. The Social Investment Forum, the Interfaith Center on Corporate Responsibility, labor pension funds, and Trillium and other leaders in the socially responsible investment world banded together to oppose any new limits on the shareholder proposal process. Our efforts and the efforts of other shareholder rights’ advocates generated over 34,000 comments to the SEC opposing any weakening of shareholder proposals. We joined these groups in lobbying key Congressional leaders and SEC members and in sponsoring a national poll which found broad investor opposition to weakening shareholder proposals. As a result of this groundswell of support for shareholder advocacy tools, the SEC did not pursue any of the options it was considering to limit shareholder proposals.
Medtronic – Sustainabilty Reporting
WHEREAS
Investors increasingly seek disclosure of companies’ social and environmental practices in the belief that they impact shareholder value. Many investors believe companies that are good employers, environmental stewards, and corporate citizens are more likely to generate incremental financial returns, be more stable in turbulent economic and political conditions, and enjoy long-term business success.
Mainstream financial companies are seeking tools to understand the links between sustainability performance and capital markets. According to research consultant Innovest, major investment firms including ABN-AMRO, Schroders, T. Rowe Price, and Legg Mason subscribe to information on companies’ social and environmental practices to help make investment decisions.
Sustainability refers to endeavors that meet present needs without impairing the ability of future generations to meet their own needs. It includes “encouraging long lasting social well being in communities where [companies] operate, interacting with different stakeholders (e.g. clients, suppliers, employees, government, local communities, and non-governmental organizations), and responding to their specific and evolving needs, thereby securing a long-term ‘license to operate,’ superior customer and employee loyalty, and ultimately superior financial returns.” (Dow Jones Sustainability Group)
Globally, approximately 3,600 companies produce reports on sustainability issues (www.corporateregister.com), including more than half of the global Fortune 500 (KPMG International Survey of Corporate Responsibility Reporting 2005).
Medtronic competes internationally, and global expectations regarding sustainability reporting are increasing. The European Commission recommends corporate sustainability reporting, and listed companies in Australia, South Africa and France are required to provide investors with information on their social and environmental performance. Companies increasingly recognize that transparency and dialogue about sustainability are elements of business success. For example, Unilever’s Chairman stated in a 2003 speech, “So when we talk about corporate social responsibility, we don’t see it as something business “does” to society but as something that is fundamental to everything we do. Not just philanthropy or community investment, important though that is, but the impact of our operations and products as well as the interaction we have with the societies we serve.”
RESOLVED
Shareholders request that the Board of Directors issue a sustainability report to shareholders, at reasonable cost, and omitting proprietary information, by September 1, 2008.
SUPPORTING STATEMENT
The report should include the company’s definition of sustainability, as well as a company-wide review of company policies, practices, and metrics related to long-term social and environmental sustainability.
We recommend that Medtronic use the Global Reporting Initiative’s Sustainability Reporting Guidelines (“The Guidelines”) to prepare the report. The Global Reporting Initiative (www.globalreporting.org) is an international organization developed with representatives from the business, environmental, human rights and labor communities. The Guidelines provide guidance on report content, including performance on direct economic impacts, environmental, labor practices and decent work conditions, human rights, society, and product responsibility. The Guidelines provide a flexible reporting system that allows the omission of content that is not relevant to company operations. Over 800 companies use or consult the Guidelines for sustainability reporting, including 3M, Abbott Laboratories, Johnson & Johnson , Tyco, General Electric, Philips Electronics and United Technologies.
American Express – Sustainability Reporting
WHEREAS
Investors increasingly seek disclosure of companies’ environmental and social practices in the belief that they impact shareholder value. Many investors believe companies that are good employers, environmental stewards, and corporate citizens are more likely to generate incremental financial returns, be more stable during turbulent economic and political conditions, and enjoy long-term business success.
Sustainability refers to endeavors that meet present needs without impairing the ability of future generations to meet their own needs. According to Dow Jones, “Corporate Sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental, and social developments. Corporate sustainability leaders achieve long-term shareholder value by gearing their strategies and management to harness the market’s potential for sustainability products and services while at the same time successfully reducing and avoiding sustainability costs and risks.” ( http://www.sustainability-index.com/htmle/sustainability/ ), including Citigroup and Bank of America.
We believe that improved reporting on environmental, social, and governance issues will strengthen our company and the people it serves. Furthermore, we believe this information is necessary for making well-informed investment decisions as it speaks to the vision and stewardship of management and can have significant impacts on our company’s reputation and on shareholder value.
Globally, almost 1,900 companies produce reports on sustainability issues (
The GE 2006 Citizenship Report provides a compelling rationale for sustainability reporting: “Investors are increasingly interested in evaluating companies based on a broader set of criteria than just financial performance… The strength of reputation, trust in brand and governance, and the ability to perform as a good corporate citizen, all impact GE’s valuation and shape the perception of the Company’s worth. In fact, according to a recent study, 70% of institutional asset managers believe the Company’s citizenship factors will be part of mainstream analysis in the next 3 to 10 years… GE’s focus is on providing transparent communications relating to the Company’s citizenship performance.”
RESOLVED
Shareholders request that the Board of Directors issue a sustainability report to shareholders, at reasonable cost, and omitting proprietary information, by October 1, 2007.
SUPPORTING STATEMENT
The report should include the American Express Company’s definition of sustainability, as well as a company-wide review of policies, practices, and indicators related to measuring long-term social and environmental sustainability.
We recommend that the American Express Company use the Global Reporting Initiative’s Sustainability Reporting Guidelines (“The Guidelines”) to prepare the report. The Global Reporting Initiative (
Pfizer Price Restraint/Access and Affordability
Increasing Access to Pfizer Products
RESOLVED: Shareholders request the Board of Directors report by September 2006 on measures Pfizer is taking to contain the price increases of its most-prescribed drugs to levels equal to or below the annual rate of inflation.
SUPPORTING STATEMENT:
Enacting this proposal will align our company with its previously stated practice on prescription drug price increases.
Access to pharmaceutical products is essential for adequate health care for all Americans; we believe that restraining price increases is an effective way to expand access to pharmaceutical products.
In 2002, Pfizer stated: “Over the past decade, after accounting for discounts to federal government buyers and Medicaid, Pfizer’s annual price increase in the United States has averaged less than the annual rate of inflation as measured by the Consumer Price Index.” (“Improving Access to Innovative Medicines”, Pfizer Forum, 2002).
2004 saw the largest average annual price increases in four years, with Pfizer’s increases ranging from 2.9% (Lipitor 20 mg and 40 mg) to Norvasc (7.1%). (AARP Public Policy Institute, April 2005).
In 2003, more than 14 million American adults with chronic conditions could not afford all of their prescriptions. As medical needs for prescription drugs increase, the proportion of working-age Americans, especially those with chronic conditions, going without prescription drugs because of cost concerns will likely grow. (Center for Studying Health System Change Issue Briefing 95, May 2005);
In a survey, one-fifth of all women said they hadn’t bought at least one prescribed drug because they felt they couldn’t afford it. (Kaiser Family Foundation July 2005)
Spending in the U.S. for prescription drugs rose by 400% since 1990, with price increases for existing drugs accounting for 25% of the increase. (Kaiser Family Foundation, Prescription Drug Trends, October 2004).
We believe our proposal can be implemented with minimal disruption of research and development. As The Economist noted: “There is a fallacy that the price of a drug is somehow related to the cost of R&D. One will often hear arguments made by industry to justify high prices. The reality is that the price of a drug on the market has absolutely no relation to how much it cost to produce it. Drugs are priced in a way…that is essentially what the market will bear.” (“Prescription for Change,” The Economist, June 16, 2005)
Rapidly rising drug costs reduce the impact of drug discount programs and prescription drug benefits. The LA Times reported that industry discount programs are “not easy to work with” and some health care providers “have had to hire full-time staff members who do nothing but help patients with their applications.” (“Free drugs for poor may be hard to get”, Los Angeles Times, May 15, 2005).
Our company offers a discount drug program for the uninsured, Pfizer Pfriends. While such programs are welcome, moderating price increases could be a more efficient and effective way to increase access to medicines, with minimal impacts of profits and research. If you agree, please vote in favor of this proposal.
Illinois Toolworks Sustainability Report
WHEREAS: Disclosure of key information is a founding principle of our capital markets.
Investors increasingly seek disclosure of companies’ social and environmental practices in the belief that they impact shareholder value. Many investors believe companies that are good employers, environmental stewards, and corporate citizens will more likely prosper over the long term and be accepted by local communities. Mainstream financial companies are seeking tolls to understand the links between sustainability performance and capital markets. According to environmental research consultant Innovest, major investment firms including ABN-AMRO, Schroders, T. Rowe Price, and Legg Mason subscribe to information on companies’ social and environmental practices to help make investment decisions.
A growing number of companies are issuing sustainability reports. According to the Dow Jones Sustainability Group, sustainability includes: “Encouraging long lasting social well being in communities where [companies] operate, interacting with different stakeholders (e.g. clients, suppliers, employees, government, local communities, and non-governmental organizations) and responding to their specific and evolving needs, thereby securing a long-term ‘license to operate,’ superior customer and employee loyalty, and ultimately superior financial returns.”
Companies increasingly recognize that transparency and dialogue about sustainability are elements of business success. For example, General Electric’s CEO writes, “In a recovering capital market, these numbers show that we are crossing the threshold where solving energy and environmental problems is the profitable thing to do as well as the right one – and where fewer pounds of emissions can mean more pounds on the bottom line.” Ford Motor Company states, “sustainability issues are neither incidental nor avoidable – they are at the heart of our business.”
Companies increasingly recognize that transparency and dialogue about sustainability are elements of business success. For example, General Electric’s CEO writes, “In a recovering capital market, these numbers show that we are crossing the threshold where solving energy and environmental problems is the profitable thing to do as well as the right one – and where fewer pounds of emissions can mean more pounds on the bottom line.” Ford Motor Company states, “sustainability issues are neither incidental nor avoidable – they are at the heart of our business.”
Many global organizations, like the European Union Framework for Corporate Social Responsibility, support corporate sustainability reporting. The national governments of Australia, Japan and the United Kingdom recommend sustainability reporting. In addition, companies listed on the Johannesburg and Paris Stock Exchanges are now required to report non-financial information related to corporate social and environmental performance.
RESOLVED: That shareholders request the company disclose its social, environmental and economic performance to the public by issuing a sustainability report to shareholders, at reasonable cost, and omitting proprietary information, by September 1, 2006.
Supporting Statement
The report should include the company’s definition of sustainability, as well as a review of company policies, management systems, and performance indicators related to employees, suppliers and the environment.
We recommend that the company consider using the Global Reporting Initiative’s Sustainability Reporting Guidelines (GRI Guidelines) to prepare the report. The GRI is an international standard-setting organization with representatives from the business, environment, human rights and labor organizations. The Guidelines provide companies with guidance for report content, including performance in six categories (direct economic impacts, environmental, labor practices, human rights, society, and product responsibility). The Guidelines provide a flexible reporting system that allows a company to omit some content while still utilizing the GRI framework. More than 500 companies, including General Electric, British Telecom, Intel, Electrolux, Cisco, General Motors, KLM, Nike, Nokia, and Volkswagen, currently use the Guidelines for sustainability reporting.
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