Urge Your Bank to Finance Projects Responsibly

Do you own shares or bonds of Chase Manhattan Bank, Citigroup, or Morgan Stanley Dean Witter? Do you use their banking, credit card, or investment management services? If you do, write and urge them to finance projects responsibly.

Addresses

Sample Letter

Dear Mr. ________:

I am writing to urge that your bank take action to incorporate environmental and human rights considerations into its policy and procedures for underwriting stocks and bonds.

<Please include a personal paragraph describing yourself, your business with the bank, and why you are concerned about this issue.>

The recent controversy over the bank underwriting of PetroChina stock and China Development Bank bonds highlights the need for banks to carefully assess the environmental and human rights impact of the stocks and bonds that they underwrite. Underwriting the securities of corporate bad actors and financing – even indirectly – controversial infrastructure projects, such as the 3 Gorges Dam, can quickly and dramatically hurts a bank’s goodwill and consumer businesses.

I urge you to take action to ensure to address these important issues as the same time as protecting your good reputation and franchise.

Please write back and tell me how you intend to address this critical concern.

Sincerely,

Your Name

Your Address

Finance & The Environment

Greening Global High Finance

From the 3 Gorges Dam in China to oil development in the lands of the U’Wa in Colombia, energy and infrastructure projects threaten the environment and the human rights in many developing countries.

Private banks have increasingly replaced institutions such as the World Bank in the financing of these projects. Consequently, environmental and human rights campaigners are shifting their focus from the policy circles of Washington to the financial markets of Wall Street.

As Wall Street has become more of a target for protest, it has also become more susceptible to pressure. In the past few years, three fundamental trends have converged to make Wall Street underwriting banks more vulnerable to outside pressure.

Firstly, mergers in the financial industry have combined underwriting operations and consumer businesses under one large corporate umbrella. Before these mergers, investment bankers did not have to worry if their underwriting deals had an impact on retail business. Now, however, critics of underwriting banks can call — or simply threaten to call — for a boycott of the bank’s consumer products, such as its credit cards.

Campaigners are also successfully targeting the underwriting banks’ key clients: major institutional investors. In recent years, a broad coalition of environmental, human rights, labor, and national security groups helped slash from $10 billion to less than $3 billion PetroChina’s initial public offering of shares. Shunning the stock were major institutions including the Teachers’ Insurance and Annuity Association and College Retirement Equities Fund (TIAA-CREF) and the public employees’ pension funds of California, Kansas, New York City, and Texas.

Finally, with the decision of Goldman Sachs to issue shares, every major U.S. underwriter is now publicly traded. Accountable to shareholders, banks are now facing a new wave of stockholder resolutions that question their financing of projects that harm communities and the environment.

What We’re Doing About This Issue

Trillium Asset Management Corporation (“Trilliu”) has worked closely on this issue with other concerned investors as well as Friends of the Earth, International Rivers Network, and the National Wildlife Federation.

In 1998, we filed the first resolution on this issue at Morgan Stanley Dean Witter after the Financial Times reported on the bank’s connection to the 3 Gorges Dam. In 1999, Trillium led the filing of resolutions at Chase Manhattan Bank, Citigroup and Morgan Stanley Dean Witter. The resolutions questioned the banks’ involvement with the 3 Gorges Dam. More importantly, the resolutions called on the banks to incorporate environmental, human rights, and public relations risk criteria into their underwriting procedures.

Since 2000, we have led shareholder dialogues with Citigroup and Morgan Stanley. As shareholders, we remain concerned that the banks are vulnerable to growing campaigns that target their consumer business because of their underwriting policies and practices. International Rivers Network has called for a boycott of Morgan Stanley Dean Witter’s Discover Card. Rainforest Action Network has launched a campaign targeting Citigroup.

The banks have learned that private financing is publicly accountable. In 2002, we withdrew our shareholder resolutions at Citigroup and Morgan Stanley after both banks reported on their progress in addressing these issues.

Since starting our dialogue, Citigroup has expanded Salomon Smith Barney’s well-regarded environmental policy department to cover the entire newly-merged corporation. Citigroup now produces an annual environmental and social policy report. More importantly, the bank has taken unprecedented steps to start to incorporate environmental, human rights and public relations risk criteria into its lending and underwriting deals. For deals in sectors with high potential impact on the environment and local communities, such as forestry and major infrastructure financing, Citigroup now requires its lenders and underwriters to complete an environmental and social questionnaire that is internally audited. The bank has also developed training modules on environmental and social issues for its lenders and underwriters.

Morgan Stanley is not as advanced as Citigroup on these issues. However, the bank has pledged considerable progress this year. For 2002, Morgan Stanley has committed to adopting an environmental policy and setting up an environmental department. By the end of year, the bank plans to complete its first review of its lending and underwriting practices in light of its new environmental policy.

For additional information, contact Shelley Alpern