By: Alan Petrillo | Monday, June 15th, 2009
Executive pay practices have recently drawn scrutiny from both Congress and the Obama Administration. Last week, Nell Minow of The Corporate Library testified before the US Committee on Financial Services on “Compensation Structure and Systemic Risk.”
In her June 11 testimony, as in her previous work, Ms. Minow emphasized that boards of directors bear ultimate responsibility for corporate pay practices. While many sustainable/socially responsible investors (SRI) welcome “say-on-pay,” she spoke frankly about the limits of this and other tactical reforms:
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By: Alan Petrillo | Friday, May 8th, 2009
As noted by Robert Kropp at Social Funds, 2009 is witnessing a dramatic increase in “say on pay” shareholder resolutions. He gives some credit for this to “public outrage” over executive compensation levels during a worldwide recession. Shareholder engagement is also driven by sustainable and socially responsible investment (SRI) advocates, who help investors work together to achieve common goals.
Green America (formerly Co-op America) recently launched a “proxy education center” for shareholders. With support from Ceres, the AFL-CIO, and the Interfaith Center for Corporate Responsibility, the site offers guidance on proposed resolutions in four topic areas at 23 major companies.
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By: Alan Petrillo | Thursday, March 26th, 2009
Executive compensation practices have recently drawn attention from both the public and the government. Bailed-out insurer AIG depends on taxpayers for its survival, yet it has chosen to spend millions on retention bonuses.
Why are struggling companies – including the bailed-out, and even the bankrupt – rewarding some employees? “Greed” is a popular answer, but an insufficient explanation. In a March 20 column at CNN.com, The Corporate Library’s Nell Minow argues that compensation practices are symptoms of a broader corporate governance crisis.
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By: Alan Petrillo | Tuesday, March 24th, 2009
The Social Investment Forum has posted a list of thoughtful answers to the “Top 10 Questions about SRI.” I especially like SIF’s responses to some skeptical questions about our industry, such as:
Is the performance of SRI funds competitive with mainstream funds and with their benchmarks?
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By: Alan Petrillo | Thursday, March 19th, 2009
Last week, Investors Against Genocide (IAG) announced that Vanguard will now screen its funds’ constituents for human rights practices – including companies’ involvement with the government of Sudan. Vanguard says that its new policy, which applies to all 157 of its funds, is “substantially identical” to IAG’s shareholder proxy proposals.
“While the SRI mutual fund industry has had policies like this in place for decades, I know of few mainstream firms which have such a clear and explicit human rights policy,” Walden Asset Management’s Tim Smith told the Social Investment Forum.
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By: Alan Petrillo | Tuesday, March 17th, 2009
Ceres, the Boston-based activist investor group, has joined governments, trade organizations and global investors in calling for automakers to measure and disclose their products’ greenhouse gas (GHG) output. Autos account for 10% of global carbon emissions, according to International Energy Agency figures cited by Ceres. Despite this, “it is extremely difficult for investors to assess properly the risks and opportunities posed by climate change policy to individual companies,” according to Ceres’ new report.
Shareholder and environmental advocacy groups have long called for better transparency and more disclosure of environmental, social, and governance (ESG) performance. Now state and federal governments are poised to require automakers and other industries to report their GHG emissions. Environmental Leader reports that a new EPA rule will affect 13,000 industrial facilities, including chemical plants, utilities and the paper industry, as well as automakers. According to the EPA, these sources account for as much as 90 percent of greenhouse gases emitted nationwide.
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By: Alan Petrillo | Tuesday, February 10th, 2009
Last week, the KLD Blog considered efforts by both shareholders and the Obama Administration to curb executive pay. Investors such as Walden Asset Management have actively sought management support for non-binding advisory votes on executive compensation.
For a closer look at investors’ thinking on “say on pay,” Walden Executive Vice President Tim Smith has shared the text of his February 5 letter to “Colleagues in the Business Community.”
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By: Alan Petrillo | Friday, January 23rd, 2009
The day after the Inauguration, the Wall Street Journal marshaled an impressive array of leaders – from Newt Gingrich to Al Sharpton to The Nation’s Katrina vanden Heuvel – to give advice to the new President. The sustainable and socially responsible investing (SRI) community has also recently offered its counsel on investing, corporate governance, and health care policy.
The Social Investment Forum called for “New American Leadership” on many of these issues in a comprehensive January 14 letter to the incoming Administration. For a concise summary of the six-page letter, see this article in Financial Advisor.
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By: Alan Petrillo | Wednesday, January 14th, 2009
Sustainable Investing: The Art of Long-Term Performance, a collection of articles from 22 contributors including co-editors Cary Krosinsky and Nick Robins, was released in the fall of 2008. SI challenges investors to look beyond what contributor Steven Lydenberg calls “the fast-paced speculative nature of today’s financial markets.” Socially responsible investors (SRI) have been striving to meet this challenge for decades, and now current events have exposed the financial system’s myopia as an urgent global crisis.
If it had been released last year, this book would have been a valuable primer on how some investors integrate environmental, social and governance (ESG) factors into their strategies. In the winter of 2009, however, Sustainable Investing now offers answers to questions the whole world is asking. Consider this diagnosis from a January 3 New York Times article by Michael Lewis and David Einhorn:
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By: Alan Petrillo | Monday, January 12th, 2009
At BusinessGreen, Danny Bradbury reports that even as Apple launches new “green” products, the company is resisting shareholder requests for better sustainability reporting. Apple’s board has asked its shareholders to vote against a resolution calling for the company to measure and disclose its environmental impact in a formal corporate social responsibility (CSR) report. The resolution is proposed by environmental advocacy group As You Sow, who also called on Apple to design its computers for end-of-use recycling in 2007. Mr. Bradbury writes:
“The [current] resolution would require the company to publish a CSR report detailing its approach to greenhouse gas emissions, toxics and recycling by July this year. The report would also require Apple to define ‘sustainability,’ and would include a company-wide review of policies contributing to sustainable operations.
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