2008 Advocacy Review

For our 2008 advocacy efforts, we’re pleased to report a fair amount of progress — never as much as we’d like (we’d like superhero powers), but enough to confirm that shareholder activism remains a potent tool for change.

Climate change. Our shareholder resolution at ConocoPhillips requesting a report on the environmental and social impacts of tar sands drilling won almost 28% of the vote, an impressive vote in this arena. Our resolution at Bank of America addressing its financing of coal-fired power plants and mountaintop coal removal was deemed inadmissible by the Securities and Exchange Commission (SEC), but we eventually sat down with bank officials to express our displeasure in a more intimate setting. Our takeaway: don’t expect BAC to stop funding these projects any time soon, even while it invests more and more in less carbon-intensive projects. Alliant Energy agreed to our request to report publicly on its efforts to incent customers to reduce their energy use, leading us to withdraw a resolution.

Human Rights. We co-filed a resolution led by our friends at Domini Social Investments at Nucor after media reports linked the company’s supply chain to forced labor. Nucor agreed to implement a formal policy and code of conduct expressing opposition to forced labor, and to dialogue with us on how to best report to shareholders on this issue, leading us to withdraw. We also spent time in conversation with Talbots, Target, Liz Claiborne, Nike, Gap and Jones Apparel on how their purchasing practices put pressure on their suppliers that can lead to a higher risk of labor violations.

Experts on the genocide in Darfur have declared that if anyone has any influence over the Sudanese government that is perpetrating the atrocities, it would be China. China sells arms to the government, and two Chinese oil companies operating in Sudan provide major revenues. Since we don’t own shares in any of the Chinese or other foreign firms in Sudan (and US firms are prohibited by sanctions), we’re talking to their investment bankers and investors on Wall Street. This last year we filed resolutions with Morgan Stanley, Merrill Lynch, and JP Morgan Chase. We withdrew at Morgan Stanley and Merrill after constructive dialogues on diminishing the risks they incur from these relationships. Our resolution at JP Morgan received 7.7%, enough for us to proceed with a re-filing should it prove necessary.

Political contributions transparency. How much corporate trade association money is being diverted to ads and groups that are shaping the election this year? No one knows for sure, but it could run to the hundreds of millions, according to the Center for Political Accountability. In 2008, our resolution at Procter & Gamble prompted the company to commit to greater transparency, while Ford Motor and General Motors remained resistant despite resolutions.

Employment nondiscrimination. We withdrew a resolution at Pentair after the company agreed to add sexual orientation to its nondiscrimination policy. Our resolution at Expeditors International on the same drew 52% in support – and a strange silence from company management and the Board of Directors. Perhaps they’re waiting for a super-majority, or just like flouting the will of their shareholders. We’ll re-file and let you know.

Environmental Justice. Chevron‘s shareholders defeated our resolution addressing the strength of the company’s global environmental standards in light of its issues in Ecuador, Nigeria and elsewhere. The good news, however, is a major break in the multibillion-dollar lawsuit Chevron faces in Ecuador for Texaco’s widespread rainforest pollution. After more than a decade, the company has finally agreed to explore a settlement.

After persistent nudging, Toyota Motor Corporation is starting to take seriously the contradiction between its supposed boycott of Burma, and the Burmese involvement of the independent company Toyota Tsusho that has a distributorship in that country. As this progresses, as the saying goes, you’ll read it hear first.

From the President

One of the most amaz­ing days of my professional life was the day more than a decade ago that I spent as keynote speaker for a conference of the people in charge of General Motors’ environmental policies and procedures in plants around North America. There were hundreds of them, many of whom had Ph.D.’s. They were very interested and supportive when faced with an unedited speaker advocating stronger environmental policies and complete disclosure of results. On another day, a visit with the General Motors’ crash test dummies, watching steering wheel columns hurtle into the surrogate humans in car seats at various speeds, became a memorable experience. It was pretty ugly and very sobering. Those of us on the Ceres dialogue team probably all changed our driving habits that day.

In dealing with General Motors through Ceres, the people we met were often second or third-generation, really terrific, farsighted GM people who would retire from the company on what used to be generous benefits.

But I have also watched the top management of this giant company veer from one policy to another, clumsily, in an effort to survive the serious global transportation and energy ques­tions that seemed to surprise many of them. Their reactions have often seemed primitive and shortsighted or even, at times, mean-spirited. General Motors is a company of contradictions.

The latest weird, attention-getting gaffe came from one Robert Lutz, Vice Chairman of Global Product Development, who recently called climate change a “crock of shit.” He has had a reputation of ignoring environmental concerns; years ago, at the 2004 Detroit Auto Show, Lutz had said that the hybrid did not “make environmental or economic sense.” In the past few days, the company has attempted to paper over these statements through an aggressive campaign claiming that Lutz’s opinion about climate change “doesn’t count” and, from his own blog, “my goal is to take the automotive industry out of the debate entirely. GM is working on just that – and we’re going to keep working on it – via E85, hybrids, hydrogen, and fuel cells, and the electrification of the automobile.”

But piling right on this annoying verbosity from Lutz was the announcement that GM is rearranging the duties of the three top managers in part to give CEO Rick Wagoner more time for “environmental lobbying,” which would include defeating clean air legisla­tion. Wagoner was quoted in the Wall Street Journal last week as saying there’s more “advocacy work” to be done with regard to California’s attempt to implement its own tough tailpipe emissions rules.

GM lost their place as the number one automobile manufacturer in the world to Toyota in 2007. Toyota is no angel company (see Susan Baker Martin’s cover story), with a fleet that includes some huge cars, but they scored with the Prius and helped move the public to accept hybrid cars on the road. I have no idea, after years of working around General Motors, what makes them tick – or not tick! I know one thing, though. I hope the smart women and men with imagination and foresight at GM prevail because I don’t want to see this company disappear.