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 3rd 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.
Climate Change Shareholder Resolution Wins Majority at Idacorp
In a precedent setting victory, a shareholder resolution filed by Trillium Asset Management Corporation (“Trillium”), As You Sow, and Calvert that asked Idaho Power to establish greenhouse gas emissions reduction targets received 52% of the vote. This is the first time a climate change resolution has received a majority vote — the first majority vote recorded for a climate change shareholder proposal. In response to the vote, Idaho Power CEO LaMont Keen said that the company took this message seriously, and would work to meet the resolution’s request for a report by September 30th.
The resolution received the endorsement of the Idaho Statesman. Newspaper endorsements of shareholder resolutions are quite rare.
Read the full press release here.
Read an Idaho Statesman op-ed about the resolution by Trillium Assistant Portfolio Manager Lauren McLean here.
Idacorp – Greenhouse Gas Emissions Reduction
WHEREAS
In 2007, the Intergovernmental Panel on Climate Change found that that “warming of the climate system is unequivocal” and that man-made greenhouse gas emissions are now believed to be the cause with greater than 90 percent certainty.
In October 2007, a group representing the world’s 150 scientific and engineering academies, including the U.S. National Academy of Sciences, issued a report urging governments to lower greenhouse gas emissions by establishing a firm and rising price for such emissions and by doubling energy research budgets to accelerate deployment of cleaner and more efficient technologies.
In October 2006, a report authored by former chief economist of the World Bank, Sir Nicolas Stern, estimated that climate change will cost between 5% and 20% of global domestic product if emissions are not reduced, and that greenhouse gases can be reduced at a cost of approximately 1% of global economic growth.
The electric industry accounts for more carbon dioxide emissions than any other sector, including the transportation and industrial sectors. U.S. power plants are responsible for nearly 40 percent of U.S. carbon dioxide emissions, and 10 percent of global carbon dioxide emissions.
Coal is the most carbon-polluting type of power generation. Coal accounted for 53% of power generation from Idaho Power Company owned resources in 2007 and 38% of its energy portfolio source. Numerous studies including the 2007 Idaho energy plan have indicated adequate renewable resources and efficiency opportunities within state of Idaho to handle Idaho power’s load growth over the next 20 years.
A majority of U.S. states are involved in initiatives to reduce greenhouse gas emissions, and at least 34 states have enacted renewable portfolio standards. National climate change legislation is expected to be a priority for the Obama administration and the 111th Congress.
In the Carbon Disclosure Project’s most recent annual survey of the S&P 500 (released 2008), 37% of utility respondents disclosed absolute greenhouse gas emission reduction targets, and 52% disclosed intensity reduction targets.
Some of Idacorp’s electric industry peers who have set absolute reduction targets include American Electric Power, the nation’s largest electric generator, Entergy, Duke Energy, Exelon, National Grid and Consolidated Edison. Those with intensity targets include CMS Energy, PSEG, NiSource and Pinnacle West.
Duke, Exelon, FPL, NRG, and others, through their participation in the U.S. Climate Action Partnership, have also publicly stated that the U.S. should reduce its GHG footprint by 60% to 80% from current levels by 2050. They have endorsed adoption of mandatory federal policy to limit CO2 emissions as a way to provide economic and regulatory certainty needed for major investments in our energy future
RESOLVED
Shareholders request that the Board of Directors adopt quantitative goals, based on current technologies, for reducing total greenhouse gas emissions from the Company’s products and operations; and that the Company report to shareholders by September 30, 2009, on its plans to achieve these goals. Such a report will omit proprietary information and be prepared at reasonable cost.
ConocoPhillips – Environmental Impacts of Oil Sands
WHEREAS
ConocoPhillips has extensive interests in oil sands operations in the Canadian boreal forest. ConocoPhillips holds a 9% interest in Syncrude; is the operating partner of the Surmont oil sands; and is a partner in the FCCL Oil Sands Partnership. Total production capacity for these projects is estimated at 950 MBD within the next few years.
The boreal provides critical climate regulation for the earth as a whole, storing more than 186 billion tons of carbon — equivalent to 913 years’ worth of Canada’s greenhouse gas emissions. More than 30% of North America’s bird population rely on the boreal for breeding.
Industrial logging and oil sands have reduced the boreal to less than 40% of its original size; the remaining forest is fragmented, with harmful impacts on many species. According to the Canadian Parks and Wildness Association, it will take over 300 years before reclaimed areas become functioning forest again. The UN Environmental Program has identified the boreal as one of the world’s top 100 “hot spots” of environmental change.
Processing oil sands is highly resource intensive and requires the draining of wetlands, diversion of rivers and the removal of trees and vegetation. Tailing ponds cover almost 20 square miles. Their pollutants are acutely toxic to aquatic life and threaten to leak into the groundwater system and surrounding soil and surface water.
Extracting one barrel of bitumen requires 2-5 barrels of fresh water. Less than 10% of the water withdrawn from the Athabasca River is returned, threatening the survival of numerous fish and bird species. Current withdrawals from the river for oil sands are twice the amount used annually by the population of Calgary. The Pembina Institute predicts that withdrawals may increase by 50% within 6 years. Future demand for groundwater is expected to increase exponentially.
An average barrel’s extraction requires enough natural gas to heat a Canadian home for 1.5-5.5 days, and the removal of four tons of earth. While processed sand must be replaced and the site reclaimed, in 40+ years of oil sands operations, not a single acre has received a reclamation certificate from the Canadian government.
Oil sands have made Alberta the largest emitter of industrial pollutants in Canada. They are the fastest growing source of Canada’s greenhouse gas emissions, generating 3x more during production than conventional oil. These emissions will be responsible for 50% of the growth in Canada’s emissions between 2000 and 2012.
RESOLVED
Shareholders request that an independent committee of the Board prepare a report (at reasonable cost and omitting proprietary information) on the environmental damage that would result from the company’s expanding oil sands operations in the Canadian boreal forest. The report should consider the implications of a policy of discontinuing these expansions and should be available to investors by May 2010.
SUPPORTING STATEMENT
The requested report should discuss the intense environmental and social impacts of oils sands operations that occur despite best efforts at mitigation, including: greenhouse gas emissions, water resources, biodiversity, and social impacts upon Albertans, including indigenous populations.
2008 Advocacy Priorities
For the 2007-2008 shareholder resolution season (which roughly parallels an academic year), Trillium Asset Management Corporation (“Trillium”) has filed 18 shareholder proposals addressing a wide range of environmental and social justice concerns. Thirteen resolutions on which we are acting as lead* filer are highlighted in this article. All the proposals we are involved in are posted on our web site.
Among its Wall Street peers, Bank of America (BAC)‘s internal greenhouse gas (GHG) reduction goals look good upon a first read: the bank has pledged that emissions from its own offices by will decline 7 percent from 2004 levels by 2008. Yet the bank finances GHG-intensive coal power plants and mountain top removal (MTR) coal mining projects that feed them. MTR destroys rivers, streams and habitats as well as the tops of mountains. We are asking BAC to observe a moratorium on all financing of MTR coal mining and the construction of new coal-burning power plants that emit carbon dioxide.
Trillium and Green Century Capital Management[1] are pioneering the first oil sands resolutions at ConocoPhillips and Chevron, respectively. Oil sands are large tracts of sand and rock material beneath Canada’s dense boreal forests that reportedly hold over a trillion barrels of crude oil. The extraction process requires volumes greater water and energy than ordinary oil drilling, endangering the regions ecology and preventing Canada from meeting its Kyoto Protocol commitments. Our resolutions press the two companies to report on the extensive environmental damage that will result from their expanding oil sands operations, and the ensuing impacts on greenhouse gas (GHG) emissions, water resources, biodiversity and indigenous populations.
In the utility sector, we are pressing Alliant Energy to adopt incentives that will enable it to profit by reducing greenhouse gas emissions by improving its customers’ energy efficiency. Alliant is set to build a new 630-megawatt coal-fired power plant that will emit several million tons of carbon dioxide per year.
For the fifth consecutive year, we are continuing to press Chevron on its pollution legacy in the Ecuadorian rainforest and elsewhere. This year, the New York City pension funds became the lead filer of the resolution we filed last year that asks Chevron’s Board to report on the policies that guide how the company assesses host country laws and regulations, and their ability to adequately protect human health and the environment.
On the topic of environmental health, we are again asking Dow Chemical to establish an independent scientific panel to research and report on the links between Dow pesticides and asthma, in collaboration with the Pesticide Action Network North America.
Working with a shareholder-NGO coalition that formed in response to the massacres in Darfur, Trillium has filed resolutions at JPMorgan Chase, Morgan Stanley and Merrill Lynch, which are among the largest shareholders in foreign oil companies whose business with Sudan finances the government’s mass atrocities in Darfur. We’ve also been in discussion with Citigroup. We’re asking these Wall Street firms to press the foreign oil companies to persuade the Sudanese government to stop obstructing the deployment of UN peacekeeping forces in accordance with UN Resolution 1769. We are also in dialogue with Schlumberger, an oil services firm with operations in Sudan.
Closer to home, Trillium is leading a large coalition of shareholders in a long-running effort to get Home Depot to disclose its Equal Employment Opportunity data (a detail of workforce composition by race, sex and rank). This data disclosure is viewed as an effective incentive to spur companies to develop programs to break glass-ceiling barriers.
Since 1995, Trillium has been a leader in promoting corporate sexual orientation nondiscrimination policies. We have filed resolutions at Expeditors International and Pentair, the only two transportation stocks in our universe who lack such policies, to amend their written equal employment opportunity statement to explicitly prohibit discrimination based on sexual orientation. We are also joining the New York City pension funds in re-filing a sexual orientation policy resolution at ExxonMobil – for the 11th year, but who’s counting? — that asks the company to adopt nondiscrimination protections for “gender identity” as well.**
Shareholders campaigns over the past three years have spurred corporations to adopt a critical piece of governance reform in the form of detailed disclosure of political donations. Relying on publicly available data does not provide a complete picture of political expenditures. Shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Ford Motor and General Motors have yet to improve their transparency, prompting our shareholder resolutions asking each company to disclose its political contributions and payments to trade associations and other tax-exempt organizations (We are the lead filer at Ford and are co-filing with Catholic Healthcare West at GM). We are also in dialogue with Dominion Resources and several other companies in this area.
* We often file in coalition with other social investors, and as the word implies, the “lead” filer takes on the organizing role.
[1]Trillium is the sub-advisor for Green Century Capital Management’s Balanced Fund.
** Statutes usually define gender identity as “having or being perceived as having a gender related identity or expression whether or not stereotypically associated with a person’s assigned sex at birth.” Persons in need of such protections often include (but are not limited to) those who are physically transitioning to, or choose to present themselves as, the opposite of their sex at birth.
Bank of America – Moritorium on Coal Financing
WHEREAS
Bank of America (BOA) is a diversified financial services company providing banking,investment, investment banking, credit card and consumer finance services.BOA recognizes that its ability to attract and retain customers and employees could be adversely affected “to the extent our reputation is damaged” and that “failure to address, or to appear to fail to address various issues” could damage the Corporation and its business prospects. (2005 Annual Report)BOA also recognizes that:
- The health of our company is dependent on the health of communities and our society;
- Climate change and atmospheric pollution represent a risk to the ultimate stability and sustainability of our way of life; and
- Every part of our business has a potential impact on our environment.
http://www.bankofamerica.com/environment/index.cfm?template=env_clichangepos
BOA’s greatest impact on climate change and the environment arises from its financing of businesses and activities, such as electric power generated from coal-burning plants, that emit substantial greenhouse gases (e.g., carbon dioxide) and other pollutants.
As a leading financial institution, BOA has adopted a goal of reducing direct greenhouse gas (GHG) emissions from its facilities by 9% and indirect GHGs within its energy & utility portfolio by 7%.
However, BOA continues to provide financing for companies engaged in mountain top removal (MTR) coal mining and for coal-fired electric power, which, in addition to having serious adverse impacts on communities, the environment, and public health, may also increase the long-term indirect GHG emissions within BOA’s portfolio.
MTR devastates the environment. Forests are clear-cut, the top of mountains blasted away to reveal coal seams and the rubble dumped in the valleys below, filling streams and destroying water resources. Between 1992 and 2012, the US Environmental Protection Agency estimates MTR will have destroyed approximately 7% of Appalachian forests in coal mining regions studied. (http://www.epa.gov/Region3/mtntop/pdf/mtm-vf_fpeis_full-document.pdf)
Deforestation is the second leading source of GHG emissions worldwide. (http://www.gsfc.nasa.gov/gsfc/service/gallery/fact_sheets/earthsci/green.htm)
The carbon in forests destroyed by MTR each year roughly equals the annual emissions from two 800 megawatt coal-fired power plants.
Coal-burning plants, which supply nearly half of U.S. electric power, are responsible for 80% of the nation’s GHG emissions from this sector. Technology for capturing and sequestering carbon from coal-burning plants is in the pilot stage and not widely available. Uncertainties remain regarding leakage and impact on underground water sources.
Coal plants also release most of the sulfur dioxide, nitrogen oxide, particulate matter and mercury, which harms reproductive health and mental development in children. (http://www.ucsusa.org/clean_energy/coalvswind/c02c.html)
Dr. James Hansen, a leading climate scientist at NASA’s Goddard Space Center, has urged an immediate moratorium on the construction of new coal fired power plants in the U.S. as a priority to avoid triggering dangerous destabilization of the Earth’s climate systems. (http://www.columbia.edu/~jeh1/dots_feb2007.ppt)
RESOLVED
Shareholders request that BOA’s board of directors amend its GHG emissions policies to observe a moratorium on all financing, investment and further involvement in activities that support MTR coal mining or the construction of new coal-burning power plants that emit carbon dioxide.
