New Investor Advisory Raises Questions About Proposed Open Pit Mine in Bristol Bay, Alaska

Earthworks, an environmental nonprofit, has recently published a report that details the growing list of regulatory, legal, engineering, and political challenges facing the Pebble Mine project.

The proposed open pit mine would be located at the headwaters of the Bristol Bay watershed, which produces 50 percent of the world’s commercial supply of wild sockeye salmon.

“Opposition to the Pebble mine project has translated into a barrage of legal, political and regulatory hurdles over the last year,” said Jonas Kron, an analyst with Trillium Asset Management, who reviewed the report. “After scrutinizing the project details, we believe there are significant risks that must be considered,” he added.

In 2011, Trillium organized a group of shareholders representing $170 billion of assets under management to publicly issue a joint statement calling for the Environmental Protection Agency to protect this vitally important national resource.

To read the investment advisory, click here.

Sustainable Palm Oil Policy – YUM! Brands, Inc. (2012)

Whereas:

The environmental and social impacts of palm oil, an ingredient in our Company’s supply chain, make it highly controversial. Accordingly, we believe the Company’s failure to procure certified sustainable palm oil is a brand risk, to both our Company’s reputation and long-term to the security of supply.

Approximately 85% of palm oil is grown in Indonesia and Malaysia, much of it on industrial plantations. According to the Union of Concerned Scientists, palm oil plantations are a large source of greenhouse gas emissions (GHGs) because they are often established on land converted from swamp forests (“The Root of the Problem: What’s Driving Deforestation Today, Ucsusa.org, June 2011).

Due to high levels of continuing deforestation and the burning of peatlands in land clearance, Indonesia is now the 3^rd largest emitter of GHGs globally. A 2010 report commissioned by Indonesia’s National Development Planning Agency found that the conversion of peatlands alone accounts for 50 percent of Indonesia’s GHG emissions but only 1% of GDP. (“Indonesian Government Report Recommends Moratorium on Peatlands Conversion,” Mongabay, January 19, 2010) Agricultural expansion, much of it for palm oil production, can be better managed by using other land types than standing forest.

Palm oil plantations that are not sustainably managed have been shown to destroy habitats of endangered species, such as the orangutan (UNEP-WCMC.org). Consumers have demonstrated concern for orangutan welfare by campaigning against companies that have failed to source sustainable palm oil. Failure to manage the reputational risk of deforestation in supply chains has been disruptive for a number of high profile brands including Mattel and Nestle.

The Roundtable for Sustainable Palm Oil was formed in 2004 to address the social and environmental concerns associated with palm oil production and promote sustainable palm oil products. Leading companies have committed to source only certified sustainable palm oil by 2015, including SC Johnson, Wal-Mart, General Mills, McDonalds, Mars, Nestle and Unilever. Our company has not made such a commitment and we believe has not addressed the risks described above.

RESOLVED: Shareholders request that the board of directors adopt and implement a comprehensive sustainable palm oil policy.

Supporting Statement: We believe that in order to effectively address this issue, the Company should adopt a policy that includes:

• a target date for sourcing 100% Certified Sustainable Palm Oil or for purchasing GreenPalm certificates covering 100% of sourced palm oil,
• plans to verify suppliers’ compliance with the policy,
• supporting a moratorium on palm oil expansion in rainforests and peatlands, and
• a commitment to disclose the company’s progress on this issue.

Canadian Oil Sands – ExxonMobil (2012)

WHEREAS:

ExxonMobil has significant investments in the Canadian oil sands. 

ExxonMobil owns 69.6 percent of Imperial Oil, one of Canada’s largest oil companies. Imperial is 100 percent owner of the Cold Lake oil sands project and is the operator and 25 percent owner of Syncrude. ExxonMobil and Imperial jointly own and operate 100 percent of the Kearl oil sands project.

According to ExxonMobil’s 2010 10-K, oil sands represent approximately 11 percent of proved reserves, demonstrating our company’s significant reliance on Canada’s oil sands for long term growth.

There are significant environmental, social and economic risks associated with oil sands.

The resource-intensive and environmentally damaging nature of oil sands development have introduced regulatory, operational, liability and reputational risks to oil sands companies.  

The persistence of tailing ponds, which can leak toxic pollutants into groundwater, may present risks along with significant reclamation costs not currently carried on our balance sheet.  While companies are required to provide reclamation costs to the Alberta government, investors still have very limited information on the full costs associated with the reclamation liabilities companies carry.

Lawsuits filed by Aboriginal peoples against the Canadian government challenge oil sands and pipeline projects even after approval. One thousand five hundred project components related to ExxonMobil are included in the Beaver Lake Cree case, one of the high-profile cases which could potentially shut down oil sands operations.

Developing the oil sands’ tar-like bitumen is expensive, with multi-decade payback horizons. Volatile oil prices and changing demand can impact the viability of these projects.

In its 2010 10-K, Nexen, another company in the oil sands, states, “[o]ur oil sands projects face additional risks compared to conventional oil and gas production,”  and references risks related to “Aboriginal claims” and “Public perception of oil sands development.”

Shareholders believe ExxonMobil has not adequately reported on how possible risks associated with oil sands projects may impact our company’s long term financial performance, given our company’s significant investments in this area.

RESOLVED:

Shareholders request that the Board prepare a report discussing possible short and long term risks to the company’s finances and operations posed by the environmental, social and economic challenges associated with the oil sands. The report should be prepared at reasonable cost, omit proprietary and legal strategy information, address risks other than those associated with or attributable to climate change, and be available to investors by August 2012.

SUPPORTING STATEMENT:

The Board shall determine the scope of the report. Proponents believe risk information of interest to shareholders could include, among other things, assessing the impact of worst-case along with reasonably likely scenarios regarding:

• Environmentally-related restrictions and requirements that might hinder or penalize operations, including those associated with water, land, non-carbon air emissions, reclamation and tailings; 
• Aboriginal lawsuits against the Canadian government; and
• Public opposition throughout the lifecycle of oil sands operations –from exploration, to extraction, to transportation of the extracted bitumen.

Of Climate Change and Cost Curves

Natasha Lamb

As communities around the globe strive to meet ever-increasing energy demand and produce sustainable jobs and investments, we are at a crossroads where we must either aggressively adopt non-fossil fuel energy sources or risk exceeding the 2°C temperature rise already expected from the cumulative buildup of greenhouse gases in the atmosphere. Mainstream conventional wisdom holds that nuclear power must be embraced in the transition to a post fossil fuel future, and that solar and wind’s high costs and lack of scalability will consign their contributions to the margins. But as we discuss in this article, for reasons inextricably linked to their environmental profiles, nuclear power is still an unattractive financial investment, while solar and wind look increasingly attractive. Most compelling, the costs of providing nuclear power are rising while those of wind and solar are making their way down the cost curve.

According to researchers at the Lawrence Berkeley National Laboratory, photovoltaic (PV) systems costs have dropped 50 percent over the last 12 years, much of it due to module cost reductions that accelerated in just the past two years. According to another report, prepared by Dr. John O. Blackburn and Sam Cunningham of Duke University, these cost reductions have brought solar power to parity with nuclear. The Duke report draws on the work of Mark Cooper of Vermont Law School’s Institute for Energy and the Environment, concluding that third generation nuclear will cost 16 cents per kWh on average. The investment bank Lazard Ltd. estimates nuclear slightly lower at 12.3 cents per kWh and solar at 15.6 cents. But whether it is 12 or 16 cents one can expect the nuclear cost curve to start climbing, due to increased regulatory, safety, and permitting costs post-Fukushima. Meanwhile, solar’s cost curve is headed south and expected to be cost-competitive without subsidies by the end of the decade.

The Rocky Mountain Institute (RMI) sees great efficiencies ahead for solar beyond reductions in module costs. Its recent report, Achieving Low Cost Solar PV, asserts that installation costs alone, known as “balance of system” costs, represent half the cost of a solar system and can be reduced by 50 percent over current best practices. RMI’s Amory Lovins points to private equity as a gauge of where the smart money is flowing. In 2010, $151 billion in private dollars underwrote 50 gigawatts of renewable energy, while nuclear received no inflow at all. Lovins goes further to highlight wind energy’s inherent cost advantage over nuclear: “they [nuclear plants] cost two to three times as much as new wind power, and by the time you could build a reactor, it couldn’t even beat solar power.”

This last point is especially relevant, given the urgency of making the transition to clean energy sources in the midst of climate change. Although nuclear has been championed in some quarters as the “no carbon” solution, the time required to build a nuclear plant disadvantages it relative to solar and wind. New nuclear plant construction requires a 60-month timeline and is growing, versus 18 months for wind installations. While nuclear plants are stuck in the planning and construction phase, renewable energy installations can be quickly deployed. Further, with the cost of renewables continuing to decline over time, nuclear begins to look less and less competitive.

It is also important to consider whether estimates of nuclear energy’s potential contribution to slowing global warming are misleading. According to a Carnegie Endowment report, many estimates unrealistically assume nuclear would replace carbon intensive coal-fired energy generation alone. A more likely scenario is that nuclear capacity will displace natural gas, wind, solar, and other forms of lower-carbon energy as well. The all-coal assumption leads to artificially high emission reduction projections.

Nuclear generation is also burdened by high upfront costs. In fact, nuclear plants do not generate profits in their first decade, which is why financing, which can range from 25 to 80 percent of total costs, has been such a challenge. As taxpayers and investors, we should question the total costs, including waste disposal, disaster preparedness, healthcare, terrorist threats, and loan defaults. Cost overruns have been the norm for the industry. The Congressional Budget Office reported in 2008 that historic cost overruns were 207 percent prior to the Three Mile Island disaster and 250 percent following the event. Even the highly touted AREVA, a French nuclear conglomerate with third generation technologies, was one and a half years behind schedule and $1 billion over budget in building its Olkiluoto, Finland plant.

Solar is not the only alternative power source journeying down the cost curve. Many alternatives boast competitive cost structures. Wind costs 8.5 cents/kWh, geothermal 7.5 cents, and energy efficiency 2.5 cents, by far the cheapest with the least technology risk. These solutions are poised to transform the energy infrastructure globally, from a centralized generation model to a distributed, more efficient power system. Layer on “smart grid” technologies that enhance the efficient delivery of energy to consumers, and we will be able to effectively harvest solar and wind power from the center of the country and transmit it to higher density population centers.

But cost breakthroughs alone will only go so far to hasten the adoption of wind, solar and other clean technologies when government incentives reward nuclear and fossil fuel development. Public policies must practice a “reverse discrimination” in favor of subsidizing non-nuclear renewables. A forthcoming report by the Intergovernmental Panel on Climate Change will argue renewables could provide up to 77 percent of the world’s energy needs by 2050, but only if the government and private sector were willing to invest up to $5.1 trillion through 2020, and $7.2 trillion in the decade following.

Despite the sunny outlook [pun intended – Ed.], the critical question is how to achieve reliable baseload power when the sun is not shining and the wind is not blowing, as intermittent energy sources only produce power about 30 percent of the time.

Natural gas is currently the most viable alternative given its lower carbon profile, but the bulk of the U.S.’s abundant gas beds must be extracted with hydraulic fracturing (or “hydrofracking”), a technique linked to highly publicized instances of groundwater contamination and well blowouts. It remains to be seen whether drillers will rise to the occasion to mitigate the risks to public health and the environment, or whether far reaching legislation will be necessary.

Projected technological advances hold the promise that solar may one day contribute to baseload needs. The World Resources Institute report Juice From Concentrate: Reducing Emissions with Concentrating Solar Thermal Power, promotes Concentrating Solar Thermal (CST) power as a base load solution. CST combines solar power and thermal storage to power steam turbines around the clock.

As ESG investors, we look for the most viable, cost competitive technologies that also deliver the least environmental, social, and governance risk. Representative Ed Markey (D-MA) articulates the importance of the investor’s perspective:

Wall Street is what did in the nuclear industry after Three Mile Island and Chernobyl…It is Wall Street again today that is going to believe that nuclear power has become an increasingly risky financial investment.

As ESG investors, the onus is on us to determine risk in the context of cost curves, climate change, and viability. Given the trend lines, it’s clear for the foreseeable future that solar and wind are truly clean, safe and renewable, while there is little evidence to support the inclusion of nuclear power in an ESG-screened portfolio.

—

Nuclear Power Finds Some Acceptance Within the SRI Community

Milton Moskowitz

I was 18 when two atom bombs were dropped on Japan, and I remember feeling relieved because it meant that we probably would not need to sacrifice thousands of soldiers’ lives in a frontal invasion of the Japanese mainland. There were few dissenters to this action, which did accomplish its mission. Seeing the destruction wrought in Hiroshima and Nagasaki, the Japanese government surrendered, ending World War II.

It’s eerie that 66 years later nuclear energy is again causing havoc in Japan, although this time it was self-imposed. The combination of a 9.0 earthquake and subsequent tsunami crippled the Fukushima Daiichi nuclear plant operated by Tokyo Electric Power (TEPCO). It’s a disaster predicted 32 years ago in the movie, The China Syndrome, where utility executives are portrayed as obtuse deniers of any dangers associated with nuclear energy operations. Tokyo Electric Power is the world’s largest privately owned electricity company, and it has been cast in the same light as the executives in that movie, charged with ignoring previous warnings about design flaws. The Economist, in its April 2 issue, cited this appraisal of TEPCO by the well known Japanese management consultant, Kenichi Ohmae: “This company is really rotten to the core.” TEPCO shares on the Tokyo Stock Exchange have slid 83 percent since March 11, the day the earthquake hit.

It’s interesting that the first warnings about the hazards of nuclear energy came from the scientists whose research paved the way for the atomic bomb, among them Hans Bethe, Leo Szilard, Enrico Fermi, J. Robert Oppenheimer. They founded The Bulletin of Atomic Scientists to express their concerns. Oppenheimer once said: “When you see something that is technically sweet, you go ahead and do it and you argue about what to do after you have had your technical success.” And in 1946 Albert Einstein said: “The unleashed power of the atom bomb has changed everything save our modes of thinking, and thus we drift toward unparalleled catastrophe.”

Early investment advisors using social screens took their cue from this group, establishing nuclear power as a no-no for investment along with tobacco and weapons production. General Electric, Westinghouse, Babcock and Wilcox and Emerson Electric were thus rendered ineligible for Social Responsible Investments (SRI). No new nuclear plants have been ordered in the United States since 1978.

SRI’s position on nuclear power began to soften with the advent of climate change and sustainability as important social issues. The argument here is that we need to reduce our carbon footprint to curb the warming of the globe – and in that struggle nuclear power can play a role. Compared to coal, it is clean energy, provided it doesn’t implode. One of the major converts to nuclear power was Stewart Brand, founder of the Whole Earth Catalog (in 1972) and someone who had a long association with environmentally-conscious groups. He changed his mind about nuclear energy in 2004 and has since debated Amory Lovins on this subject. Here is Brand’s view:

Coal’s waste stream of carbon dioxide is turning the Earth into a solar cooker. Nuclear’s waste stream is tiny by comparison, and it’s easily contained and monitored locally. Furthermore, with fourth generation reactors, the spent fuel can be reused.

Also pro-nuclear: the Obama administration.

These ideas have had an impact in the world of social investing. No advisor that I know has added General Electric to its portfolio but at least two leading mutual fund operators – Calvert and Pax World – have relaxed their total ban on companies with nuclear involvement. Bennett Freeman, Calvert’s Senior Vice President of Sustainability & Policy Research, explained the firm’s position:

In 2007 we decided to allow for the first time investment in companies that may have legacy nuclear plants, but only in certain funds. We do not invest in companies that are developing new nuclear capabilities. We made the change for several new funds, not as any kind of endorsement of nuclear power, but because we felt it was important to have a full spectrum of energy options. If you’re a utility like Florida Power & Light, which is generating 40 percent of the wind capacity in the United Sates, we want to acknowledge that affirmatively. We don’t want to penalize you because at the same time you’re operating a few legacy plants from the ’60s and ’70s.

That’s quite a different position from the one held by Physicians for Social Responsibility, a longtime campaigner against use of nuclear power. After the Fukushima plant blew up, the group issued a broadside which said: “Nuclear power is uneconomical. Nuclear power is polluting. Nuclear power is a health threat.”

Nothing equivocal about that statement.

Smucker’s – Environmental and Social Risks of Coffee

WHEREAS
Our company is one of the four largest coffee companies in the world. It provides industry leadership through its Folgers brand not only in consumer expectations, but also with regard to pricing.

The coffee business is critically important for our company by providing approximately 40% of our company’s revenue. It is equally important to the well-being of 25 million coffee farm families worldwide.

Climate change may present a number of important risks and opportunities for our company and these communities, as it impacts temperature, rainfall patterns, and disease vectors in the world’s coffee growing regions. According to the Intergovernmental Panel on Climate Change, physical risks from climate change may include changes and variability in precipitation and in the intensity and frequency of extreme weather events.

The director of research at Kenya’s Coffee Research Foundation publicly stated, “We have seen climate change in intermittent rainfall patterns, extended drought and very high temperatures.” He goes on to point out that “Coffee operates within a very narrow temperature range of 19-25 degrees (Celsius). When you start getting temperatures above that, it affects photosynthesis and in some cases, trees wilt and dry up.”

Peter Baker, coffee expert at the nonprofit CABI Bioscience, publicly stated “I often call coffee a Goldilocks plant. It likes it not too hot, not too cold. It likes it not too wet, not too dry. It doesn’t like too much sun, it doesn’t like too much shade.”

Our [c]ompany’s competitors in the coffee business – Nestle, Kraft Foods, and Sara Lee Corporation – are making public efforts to address coffee sustainability and to provide for a consistent and reliable supply chain of quality coffee. All three have made public commitments to sourcing coffee in a more sustainable fashion.

While the company’s 2010 10-K identifies climate change as a risk factor, it does not provide any discussion of what the company will do to address those risks and the role of corporate responsibility in its coffee business. It also does not discuss the opportunities for the company to become a leader in environmentally and socially sustainable coffee farming.

RESOLVED
Shareholders request that within six months of the 2011 annual meeting, the Board of Directors provide a report to shareholders (at reasonable cost and excluding confidential and proprietary information) describing how the company will manage the social and environmental risks and opportunities connected to the company’s coffee business and supply chain. We recommend the Board include in the report a concise discussion of how it will address temperature changes, changes in rainfall patterns, and the company’s responsibility for its impact on the coffee farming families in its supply chain.

Tar Sands Shareholder Proposals Pick Up Steam in 2010

In a show of how seriously investors, environmentalists and advocates are looking at the environmental costs and financial uncertainties associated with tar sands, support has grown dramatically for shareholder resolutions filed at major oil companies. This movement parallels increased activity on the part of more than 50 nongovernmental organizations working to slow down the expansion of tar sands projects.

Extracting oil from tar sands, also known as oil sands, is an energy-intensive and damaging process, whereby oil that is mixed with sand, clay, other mineral sediments and water is separated often using hot or warm water.  The oil is either extracted using strip mining or using deep wells that often require high pressure steam to encourage oil flow.  The processing has outsized impacts on air, land and water systems, and contributes higher lifecycle greenhouse gas emissions than conventional oil.

Trillium Asset Management Corporation (“Trillium”) has filed resolutions at ExxonMobil and ConocoPhilips, and signed letters of support for two resolutions at Shell and BP.

ConocoPhilips

In 2008 and 2009, Trillium acted as the “lead filer”* of a resolution calling for a report on the environmental and social impacts of the company’s oil sands extraction. In both years, support reached about 30%, which is quite high for a shareholder resolution addressing an environmental issue. Last year, there were nine co-filers; this year, the California State Teachers Retirement System (CalSTRS) has stepped up to act as lead filer, and additional 10 co-filers have signed on.

ExxonMobil

Trillium has signed on as a co-filer on this first-year resolution, sponsored by Green Century Capital Management, along with 8 additional co-filers. The proposal calls for a report “discussing possible long term risks to the company’s finances and operations posed by the environmental, social and economic challenges associated with the oil sands”. The resolution can be found here.

Shell

Trillium has signed a letter of support for a resolution co-filed by two British shareholders, The Ecumenical Committee for Corporate Responsibility and FairPensions UK, asking Shell to produce a report detailing how a decision on oil sands projects took into account “future carbon prices, oil price volatility, demand for oil, anticipated regulation of greenhouse gas emissions and legal and reputational risks arising from local environmental damage and impairment of traditional livelihoods.”

BP

Trillium supports a resolution filed at BP that calls for a report detailing BPs decisions to press forward with tar sands development, specifically the Sunrise project.  Trillium has been pressuring BP for years, as one of a group of signatories of a letter presented at the 2008 annual stockholder’s meeting expressing disappointment in the companies move into tar sands.

Investor briefings in support of the resolutions can be found at http://incr.com/resolutions.

Related Material:

“Tar Sands Development Stickier Than Anticipated,” Investing For A Better World, Spring 2008.

“ConocoPhillips Shareholders Show Strong Support for Tar Sands Proposal,” May 2009.

“Investors Decry BP’s Entry Into Tar Sands,” April 2008.

Chevron – Environmental Oversight

WHEREAS

Environmental expertise is critical to the success of companies in the energy industry because of the significant environmental issues associated with their operations.  Shareholders, lenders, host country governments and regulators, and affected communities are focused on these impacts.   A company’s inability to demonstrate that its environmental policies and practices are in line with internationally accepted standards can lead to difficulties in raising new capital and obtaining the necessary licences from regulators.

Chevron has repeatedly been cited for allegedly harmful environmental practices:

• Chevron is on trial in Ecuador for widespread contamination of Amazonian land and water resources by Texaco in the 1970s. Plaintiffs suing Chevron are challenging the adequacy of a remediation effort completed in 1998. A court-appointed expert in the Ecuadorian litigation has recommended that Chevron could be held liable for up to $27.3 billion in damages.
• Chevron is accused of polluting land and water resources by its Niger Delta operations, and damaging the local fishing economy through dredging of waterways. These practices have fueled civil unrest, protests, and a related lawsuit alleging Chevron’s complicity in security forces’ killing of two protestors.
• Chevron faces allegations of environmental and health damages to local communities from its operations in Kazakhstan. In 2007, a consortium in which Chevron has a 50% interest was fined approximately $609 million for illegally storing sulphur.

We believe that these controversies have the potential to damage shareholder value and that the company must respond to environmental challenges in an effective, strategic and transparent manner in order to restore trust and minimize the adverse impact of its operations.

Chevron does not currently have an independent director with environmental expertise. We believe it would benefit the company to address the environmental impact of its business at the most strategic level – by appointing a specialist to the board.  An authoritative figure with acknowledged environmental expertise and standing could perform a valuable and strategic role for the company by enabling Chevron to more effectively address the environmental issues inherent in its business. It would also help ensure that the highest levels of attention focus on the development of environmental standards for new projects.  Such a board role would strengthen the company’s ability to demonstrate the seriousness with which it is addressing environmental issues.

RESOLVED

Shareholders request that, as the terms in office of elected board directors expire, at least one candidate be recommended who:

• has a high level of expertise and experience in environmental matters relevant to hydrocarbon exploration and production and is widely recognized in the business and environmental communities as an authority in such field, in each case as reasonably determined by the company’s board, and
• will qualify, subject to limited exceptions in extraordinary circumstances explicitly specified by the board, as an independent director under  standards applicable to the company as an NYSE listed company,

in order that the board includes at least one director satisfying the foregoing criteria, which director shall have designated responsibility on the board for environmental matters.

ConocoPhillips Cops Out on Aggrieved Refinery Neighbors

In early June, I traveled with members of the Interfaith Center for Corporate Responsibility (ICCR) through Louisiana’s heavily industrialized and highly polluted 85-mile stretch between New Orleans and Baton Rouge known as “Cancer Alley,” then further west to the town of Mossville, a cancer alley unto its own. Our guides were leaders from local environmental justice, indigenous community, and coastal restoration groups, including the New Orleans-based Advocates for Environmental Human Rights (AEHR), which fight to restore the state’s damaged coastline and obtain environmental justice for neglected communities.

Mossville was once rich in biodiversity and natural resources. The country town was thriving when Jim Moss, a former slave, arrived in the 1790s and opened a post office. Settlers fished the swamps, raised livestock and raised families free from racial hostility.

In the 1920s and 1930s, oil and chemical companies were lured south by cheap labor and tax exemptions that endured for decades. By the 1970s, Mossville was home to the largest concentration of polyvinyl chloride (PVC) facilities anywhere in the U.S. In all, 14 industrial facilities won permits to operate in and around Mossville.

The community’s health declined as it was gradually poisoned by industrial flares, groundwater contamination, PVC emissions and other potent chemical hazards. ConocoPhillips, PPG Industries and Georgia Gulf are among the companies responsible for the most toxic and flammable substances processed and stored in Mossville.*

By 1998, Mossville residents began exhibiting recurring illnesses – cancers, rashes, and chronic respiratory and reproductive diseases — compelling the federal Agency for Toxic Substance and Disease Registry (ATSDR) to test residents’ blood.  Blood levels of dioxin were an alarming three times higher than the general population. The Environmental Protection Agency (EPA) recorded vinyl chloride emissions at 120 times greater than the ambient air standard. University of Texas researchers found that 91 percent of the residents suffered from at least one disease related to toxic chemical exposure. Despite these findings, government agencies failed to respond to the community’s need for medical services, relocation assistance, and pollution reduction.

Faced with a dying community, residents mobilized to create Mossville Environmental Action Now (M.E.A.N.), and collaborate with AEHR and Wilma Subra, a chemist who received a MacArthur “genius” grant for her environmental health advocacy. Their analysis of government data found clear matches between the specific dioxins and dioxin compounds in emissions and waste transfers, and those found in residents’ blood, attic dust, yard soil and vegetables. A comparison of EPA and ATSDR data found an astounding 77 percent of the dioxin compounds emitted by one Georgia Gulf facility, for example, matching 77 percent of the dioxins detected in blood samples in 2001.*

In 2008, Mossville residents brought their story to ConocoPhillips’ (ticker symbol: COP) annual meeting. ConocoPhillips’ Lake Charles refinery sits on the edge of Mossville and has a history of ignoring community concerns. At the meeting, CEO Jim Mulva promised them a thorough and careful investigation of their concerns. A year passed. Residents returned to the 2009 annual meeting, and again heard promises – this time Mulva’s personal assurance he’d travel to Mossville within sixty days.

In support of the community, members of the ICCR (including Trillium Asset Management Corporation) wrote to Mulva, urging him to keep his promise.

Mulva agreed to meet in Mossville in July, stipulating that only three residents could attend. The community agreed to this unreasonable condition hoping that a first meeting could plant the seeds for future dialogues. One day before the scheduled meeting, local plant manager Willie Tempton emailed M.E.A.N. saying Mulva would not attend because “significant changes in the external environment” would make it difficult if not impossible to meet the objectives of the meeting. Tempton attributed Mulva’s no-show on outside interference “from the media and the investors”.

A respectful letter from investors and vague indications of media interest either frightened off the chief executive of one of the nation’s largest companies or merely brought to the surface the arrogance that allowed it to pollute Mossville. If ConocoPhillips intends to proceed from a place of respect and integrity, Jim Mulva should have nothing to fear from media interest or concerned shareholders. The invitation is still open to visit Mossville. It would be a wiser move to accept it than to underestimate the persistence and determination of Mossville residents and their allies.

The Importance of Being Google’s Sustainability Report

by Jonas Kron

Google is a company that we often point to when asked to name companies that address environmental and social issues constructively. The company’s RE<C (Renewable Energy Cheaper Than Coal) is a groundbreaking initiative that will help change the power landscape, creating opportunities to advance solar thermal power, wind power technologies, and enhanced geothermal systems. We also are pleased to recognize Google’s efforts to cut or offset all of its greenhouse gas emissions at company data centers. Google is on the vanguard of efforts to maximize the efficiency of computers and minimize the environmental impact of the Internet infrastructure we have come to depend on.

Google’s taken progressive positions on social issues, such as the unusual step of publicly opposing California’s Proposition 8, which eliminated the right of same-sex couples to marry. The company has also taken an important step towards addressing human rights issues in a transparent fashion, by taking a leadership position in the Global Network Initiative. The GNI requires significant new commitments from participating companies, including: establishing greater transparency; assessing human rights risk; training employees; challenging human rights violations; and providing whistle-blowing mechanisms through which violations of its 5 principles can be reported (freedom of expression; privacy; responsible company decision making; multi-stakeholder collaboration; and governance, accountability and transparency.

Of course, no company is perfect. Google’s new server farm on the banks of the Columbia River in The Dalles, Oregon has entwined the company in the very high profile issue of salmon recovery in the Columbia and Snake River Basin. The attempt to save long-dwindling wild salmon populations in the Northwest is an issue critical to Native American tribes, Northwest citizens, and the region’s ecosystem. Salmon restoration science has linked the decline in this once abundant population of fish to the existence of the four Lower Snake River dams – dams whose power could be replaced with more sustainable and less damaging alternatives.

We believe the issue around the four Lower Snake River dams presents substantial reputational and financial risks to the company. Thus far, the company has not taken any tangible or meaningful steps to address these issues and position the company to be an active part of a solution.

On the social side, too often Google has been a laggard in efforts to improve privacy protections for its users. Compared to its peers, Microsoft and Yahoo!, Google retains user data for a much longer time and does not, we believe, take the steps necessary to secure that data from misuse. Google has also resisted calls for it to adopt an “opt-in” versus and “opt-out” model for collecting user data. This puts users in the default position of making more information about their online activities available than they realize or wish.

In light of this history we have raised the issue of corporate responsibility reporting and disclosures with the company in a group letter sent to Google’s CEO and co-founders. Surprisingly, Google is out of step with best practices by not publishing a sustainability or corporate responsibility report. 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 stronger financial returns, better respond to emerging issues, and enjoy long-term business success. A growing number of sell-side research houses and other mainstream investment institutions increasingly concur with this view and seek out environmental, social, and governance information from publicly traded companies.

Globally over 2,600 companies issued reports on sustainability issues in 2007 (www.corporateregister.com). Eighty percent of the Global Fortune 250 release corporate responsibility data, up from 64% in 2005, and 73% of the 100 top U.S. companies produce sustainability reports. Microsoft has been providing a sustainability report since 2004, IBM for at least five years, and Time Warner and AT&T since 2006.

A corporate responsibility report would provide an important – and obvious – venue for Google to share many of its successes. It would also demonstrate a level of transparency and engagement with stakeholders that is indicative of a healthy corporate culture. The best reports are honest assessments of where companies stand on important social and environmental issues confronting the company.
We sincerely hope Google takes our letter seriously and begins publishing a meaningful corporate responsibility report. Trillium Asset Management Corporation plans to follow up with Google and work hard to keep the issue high on the company’s list of priorities.

Sources: www.corporateregister.com, KPMG International Survey of Corporate Responsibility Reporting 2008.