Walden Announces Shareholder Advocacy Plan for 2002

Walden Announces Shareholder Advocacy Plan for 2002

Walden Asset Management announced its shareholder action agenda for 2002, covering a wide range of issues and shareholder resolutions at more than 30 companies. Walden filed or co-filed 34 resolutions on social, environmental, and corporate governance issues this year and is a lead proponent involved in dialogue and negotiations with 16 of those companies.

"Walden's expanded shareholder advocacy program demonstrates our commitment to our clients and the public to use the power of our voice as investors to urge corporations to act in a more environmentally and socially responsible manner," said Timothy Smith, Walden's senior vice president and director of socially responsive investing.

Walden manages approximately $1.2 billion in assets for clients with social and environmental concerns.

"Leadership in social investing is no longer simply avoiding investing in companies conflicting with one's social values. This leadership is defined increasingly by leveraging our ownership through the effective use of shareholder advocacy. Walden is making a difference in the marketplace and in corporate boardrooms both here and abroad," he said.

Walden's Shareholder Advocacy Program 2002 includes shareholder resolutions that were filed with the following companies and issues:

1. The Environment
  • Recycling: Coca-Cola, PepsiCo, Dell and IBM
  • Climate Change: Exxon-Mobil, Chevron-Texaco and Occidental Petroleum
  • Report reviewing the impact of drilling in environmentally sensitive areas including the Arctic National Wildlife Refuge: BP Amoco
  • Mercury Pollution: J.C. Penney and HCA
  • Genetically Modified Foods: Albertson's, Kroger and Tricon Global Restaurants
2. Diversity and Discrimination Issues
  • Report on Diversity: FleetBoston Financial and Bemis
  • Sexual Orientation in Non-Discrimination Policy: Teleflex, Alltel and Exxon Mobil
  • Board Diversity: EMC
  • Indigenous Peoples' Rights: Lehman Brothers
  • Predatory Lending: Conseco
3. Sweatshops/Human Rights Overseas
  • Sweatshop/Vendor Standards: TJX, Kohl's, Delphi Automotive, Hasbro, Sears and Lowes
4. Corporate Governance
  • Tie Executive Compensation to Social Performance: Unocal
  • Board Independence: EMC
  • Commit to Continuation of Annual In-Person Shareholder Meetings: EMC
5. Health
  • Health Risk Caused by Cigarette Filters: Eastman Chemical
  • Drug Accessibility: Abbott, Bristol-Myers Squibb
According to Smith, the sweatshop debate is a “front and center” public issue.

“Companies are being pressed by students, universities, consumers, unions, other stakeholders and investors to pay employees a living wage and end abuses in manufacturing facilities," said Smith. "We believe complementary pressure from investors underscores the importance of this issue to companies."

According to Smith, these resolutions send a message to management and become the basis for dialogue that leads to change. For example, in 2001 Walden withdrew more than a dozen resolutions from a number of companies when management pledged to disclose information or change policies or procedures, Smith said.

Among the companies responding positively in 2001, more than a dozen large retail chains pledged to phase out the sale of mercury thermometers because of the toxic pollution related to their disposal. FleetBoston agreed to strengthen reporting on its diversity record and release comprehensive data demonstrating where women and minorities are on the job ladder.

Coalition Presses for Responsibility

According to Smith, Walden is filing these resolutions as part of a much larger coalition of concerned investors dedicated to pushing corporations to conduct business responsibly. The lion's share of the leadership on shareholder advocacy once again comes from religious investors through the Interfaith Center on Corporate Responsibility (ICCR) who have been involved in shareholder advocacy for more than 30 years.

According to Heidi Soumerai, Walden’s director of social research, Walden in 2002 will work with numerous religious investors, New York City and State of Connecticut Pension Funds, foundations, socially responsive mutual funds and money managers, as well as United for a Fair Economy and others.

"These resolutions can and do have a distinct impact on corporate policy and practices. We are committed to meeting with management to discuss these important social issues. Our dialogues, which often lead to a change in policy or a commitment to increased transparency, may lead us to withdraw resolutions. We greatly value these win-win agreements," Soumerai said.

Walden Asset Management is the socially responsive investment division of United States Trust Company of Boston. Founded in 1975, Walden blends a disciplined investment style and investment performance with expertise in social screening and a commitment to using our leverage as investors to improve corporate social performance in the U.S. or abroad. Walden has an in-house team of six working on social research and shareholder advocacy.