3p Contributor: Dale Wannen
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Shareholder Resolutions Break Records in 2011
Corporations and governments around the world took notice of the power of the masses in 2011 with the Occupy movement taking center stage. But behind the scene, investors used the power of their proxy and sent strong messages to executives and board members in record numbers to advocate for change at the companies they invest in.
The Records
- The average shareholder support level rose above 20%
- 21 resolutions received more than 40% support
- 5 resolutions received more than 50% support
The Issues
How Shareholders are Battling Excessive Executive Compensation
In case you didn’t get the memo, excessive executive compensation was supposed to become a thing of the past after their actions played a major role in the recent financial meltdown. For the past year, shareholders have been able to fight for change due to the recently implemented Dodd-Frank bill. Dodd-Frank is the most sweeping financial reform the US has seen since the great depression and includes a number of sweeping changes, including the right for shareholders to weigh in on executive compensation and corporate affairs with a non-binding vote. Allowing owners of publicly traded companies to vote on such an important matter would seem to shift things in a positive direction. Right? Wrong.
Surprisingly, shareholders voted to reject executives’ (excessive) paychecks at less than 2% of almost 2000 publicly traded companies. This is a dismal number considering the current median pay of CEOs sits at $8.4 million, a 35% increase from 2009. In a recent Bloomberg Businessweek report Investor Say on Pay is a Bust, there are two strong parties advocating head to head, for and against this legislation.
Socially Responsible Investment Firm Divests Chesapeake Energy
In times when oil prices are on the brink of huge increases and radiation leaks from Japanese nuclear reactors seem out of control, natural gas is the latest panacea of energy companies looking for cheap, quick solutions. While energy providers are jumping on the natural gas bandwagon, impact investors are jumping off just as quickly due to environmental concerns like fracking.
Harrington Investments, Inc., an investment advisory firm specializing in socially responsible investing (and my employer), announced today that it is divesting its entire holding in Chesapeake Energy Corporation (CHK) due to the corporation’s poor environmental record and its lack of accountability to shareholders.
Sustainability Shareholder Proposal Turned Down at Microsoft Meeting
On a typical cold and rainy morning in Seattle this week, Microsoft shareholders, board members and executives gathered for the annual shareholders meeting to discuss the trials of the previous year, along with prospects of the future.
This is the shareholders’ only time to speak their minds directly to Bill Gates, and only one shareholder resolution was on the ballot, introduced by shareholder activist John Harrington (full disclosure, he’s my boss), addressing Microsoft’s commitment to sustainability.
Kiva Jumps into the Student Loan Business
Despite the fact that many would-be students cannot afford the cost of college in the US, at least there are loans for the determined. The Obama Administration pours loads of cash into the hands of those eager enough to pursue a degree and all the Dominos pizza that comes with it. In fact, a recent overhaul of the student loan program in the states makes it even more accessible for young Americans to enter college. In countries less fortunate, your options are very limited as far as attending university. Imagine a vehicle in which people from all over the world would be able to donate as little as $25 towards individuals wishing to pursue higher learning. Imagine no further. Kiva, the pioneer in micro-lending for entrepreneurs in less fortunate countries that has loaned more than $150 million to 408,000 entrepreneurs in 53 countries, has entered the student lending business.
Twizzler Manufacturer Campaigning For American Nutrition?
Companies across the globe are beginning to address their sustainability principles and criteria. By making tangible positive changes, greenwashing may finally be fading away. Enter Hershey’s. The Hershey Company is the most recognized chocolate brand throughout the world and produces very well-known sugar-laden snacks such as Milk Duds and Jolly Ranchers. Recently, this chocolate confectioner became a sponsor with the American Dietetic Association, the largest organization of food and nutrition professionals. The press release regarding the partnership states:
The Hershey Center for Health & Nutrition develops and supports cutting-edge scientific research for products and technologies to provide consumers with a range of snacking choices, and will collaborate with ADA on consumer and health professional initiatives including an innovative, national consumer-focused nutrition education campaign. The campaign will spotlight the expertise and experience of registered dietitians, the nation’s front-line food and nutrition professionals, in helping people achieve a healthy, personalized, balanced eating plan.”
New Resource Bank Goes “B Corp”
San Francisco-based New Resource Bank has always maintained a triple bottom line approach to its operations dating back to the opening in 2005. In fact, the bank has offset 100 percent of its electricity usage and company travel by purchasing renewable energy certificates and also partners with iReuse to track and reduce waste and consumption. To complement this already green initiative, New Resource Bank has now become the first publicly traded Certified B Corporation.
Honest Tea Trying to Stay Honest
Just as we do in our personal lives, companies go through growing pains. One organic beverage company, Honest Tea, now faces its own growing pains. From brewing batches of tea in his kitchen in 1998, Seth Goldman and his colleagues have now created one of the best-selling organic teas in the country. The business model was so successful that in early 2008, Coke purchased a minority stake in the company for a tea-tipping $43 million.
The dilemma rests in the fact that Honest Tea is trying to maintain its status as a truly organic, ecologically aware and low-calorie beverage company. Coca-Cola sees cost cutting measures and expansion of product portfolio as primary drivers. To add to this drama, Coke has the option to buy the whole company, come 2011.
Conglomerate Kraft Foods Sets New Standard in Waste Reduction
As the largest packaged food company in America, Kraft Foods has put their trademark on everything from Cool Whip to Shake’N Bake to Nutter Butters. Most recently though, Kraft has surprisingly marked itself as a pioneer in the reduction of manufacturing waste. This $50 billion dollar conglomerate has slashed its waste stream by 30 percent (double their original estimate), recycles or reuses 90 percent of its waste and sends zero waste to landfills from 9 of its major facilities.
How’d They Do It? Kraft’s main challenge according to GreenBiz, was simply to find other uses for their garbage. In their Melbourne, Australia plant the company eliminated over 100 tons of filler and label waste by making its assembly line on their peanut butter more efficient. In China, they determined that they could send excess sugar from its Tang plant to another facility that makes Halls cough drops. Even here in the states, they sent over 5 million pounds of mustard seed hulls from its production of Grey Poupon to a local farm to be used as cow feed, hence diverting this from the landfills it usually ends up at.
Want a Bonus for Greening Your Company?
Well, it’s about time. Bonuses strictly related to quarterly profits may become a thing of the past as the corporate image of BP and its dubious sustainability measures have wreaked havoc on their stock price; rather, rewards based on a deeper measurement of sustainability may start to pay off.
In fact, the recently published Roadmap to Sustainability developed by Ceres, a Boston based network of institutional investors, shows that increased attention by upper level management on sustainability is forcing companies to change. It’s important to note that Ceres also directs the Investor Network on Climate Risk (INCR), a group of more than 70 leading institutional investors with collective assets of more than $7 trillion.
Does the Cream in Your Coffee Lead to Environmental Detriment?
Every morning I pour myself a beautifully crafted, french-pressed cup of coffee. After it neatly descends into my cup, I pour a fair amount of milk into it. Apparently, hot beverages comprise quite a bit of our collective carbon footprints. It’s recently been noted that before you even head out into the car to commute to work, you’re increasing your carbon footprint considerably by adding cream to your coffee.
According to a recent article in The Guardian, the carbon footprint of the milk in a cup of coffee creates more CO2 than boiling the water and farming the beans combined. In fact, if you drink three large lattes each day for a year, you’ve used as much energy as flying half way across the continent of Europe. Now, sipping on three milk-infused lattes per day may be extreme, but the point is that a latte puts out about 16 times more grams of carbon than a simple black cup of coffee. The reason behind all of this is the large amount of methane being released by the cows who produce the milk.
Coulomb Technologies to Bring 5000 Electric Car Charging Stations to US
Mad Max, meet the Jetsons. Imagine pulling your electric car into a charging station not worrying about the dozen or so gallons of gas being poured into the back of your car. Imagine there being enough of these charging stations that you need not worry about losing your charge while cruising down an interstate, miles beyond your car’s range.
Well, imagine no more. Northern California-based Coulomb Technologies has announced its plan to install almost 5,000 stations across the U.S. by next year. Yes, 5,000! Being partly supported by the US Department of Energy and Ford Motor Company, these stations will be placed in nine metropolitan areas throughout the country. The company’s branded Smartlet stations are targeted to parking lot owners and municipalities and can be installed in numerous areas like apartment and workplace parking lots and along public streets. The stations are linked together on a network and are tied into municipal electrical grids; drivers pay for access to this power through memberships and by simply swiping a card.
Lawsuits Start to Surface From Unclear Green Labeling
My conscious weighs on me as I stare at the selection of colorful shampoos in aisle five of Whole Foods. Should I pay the extra $1.49 for the one made from organic lavender or save some cash and opt for the one containing the ever-so healthy sodium lauryl sulfite? According to a recent Wall Street Journal article, Green Goods, Red Flags, 17% of American consumers agree with me and are willing to pay more for environmentally friendly products, which is up from 10% last year. But are these products as “environmentally friendly” as labeled?
Consumers are becoming more hip to the fact that some of these labels are actually created by the marketing department of the company, not a third party regulator. SC Johnson’s Greenlist label on their Shout and Windex bottles were actually created by the company itself, similar to when mom used to make her delicious “homemade” macaroni and cheese, while you later open the trash can you see boxes of Stouffers tucked below. Just as it’s upsetting to me, this false labeling is upsetting consumers. In fact, the Federal Trade Commission (FTC) has recently stepped in as four consumer lawsuits have been filed since 2007 due to a failure to follow the well documented FTC Green Guide.
Accounting for the Next Debt Crisis
It wasn’t so long ago that the Enron scandal emerged and “cooking the books” became a common expression. Some corporations did almost anything to beat their competitors and as big banks were caught being leveraged more than 30 to 1, we witnessed another failed regulatory accounting method which has led to the current debt crisis. As we claw our way out of this recession, numerous variations of how to account for such downfalls are emerging. And this time the game is changing.
This past week over 1200 people from almost 80 countries and organizations, from Hess to Harvard, merged at the Amsterdam Global Conference on Sustainability and Transparency of the Global Reporting Initiative (GRI) to brainstorm on the issues of sustainable reporting and disclosure. At a time when corporate greed seems to still waft in the air, full-cost accounting was the topic of choice. Mark Gunther’s recent article The Next Debt Crisis Will Be Ecological seamlessly explains how we are living beyond our means. Speakers at the GRI conference reported we are currently using, on an annual basis, 130% to 140% of the earth’s biocapacity or basically an additional 40% on top of what the atmosphere is capable of chewing up and spitting back out all cleaned up.
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