October 26, 2011

NEW YORK – Shareholders of AT&T Inc. have filed a proposal calling for the company “to publicly commit to operate its wireless broadband network consistent with network neutrality principles” that would maintain open access to the Internet on wireless networks.

The filing comes only weeks before implementation of new Federal Communications Commission rules on network neutrality that provide a broad exemption for wireless broadband networks – the fastest growing segment of the Internet.

AT&T has sought in the past to block shareholders from voting on network neutrality issues. A similar shareholder proposal on wireless networks was excluded from AT&T’s 2011 proxy ballot following a Securities and Exchange Commission staff ruling that net neutrality was not a “significant public policy issue.”

The latest AT&T proposal has been filed by institutional investors including the Nathan Cummings Foundation as well as individual investors including Mike D of the Beastie Boys. Unless the proposal is blocked again, it’s expected to be voted on at the company’s annual meeting in April 2012.

“Net neutrality is clearly a material issue of import for AT&T and for the whole country, which is why it’s critical that shareholders be heard,” said Farnum Brown, Chief Investment Strategist for Trillium Asset Management, LLC, an independent investment firm with more than $900 million under management, which represents some of the filers.

According to Laura Campos, director of shareholder activities at the Nathan Cummings Foundation, “This issue has important implications for both social and economic justice and long-term shareholder value. As a shareholder, the Foundation is concerned that over the longer-term, a failure to operate its wireless broadband network in accordance with the principles of network neutrality could negatively impact AT&T’s market share and damage its reputation with consumers.”

The AT&T shareholder proposal cites research by the Institute for Policy Integrity at New York University which concluded that an open Internet accounts for billions of dollars of economic value for Americans.”This economic and social value is an important factor in the growth of our economy and widely diversified investment portfolios,” the proposal states.

The proposal also notes that open Internet policies on wireless networks have particular importance for minority and economically disadvantaged communities. People of color access the Internet via cell phones at a much greater rate than their white counterparts, according to a report by the Pew Internet & American Life Project. “The digital freedoms at stake are a 21st century civil rights issue,” says Colorofchange.org, an organization representing African-Americans, which is cited by the shareholders.

The shareholder proposal calls on AT&T to proactively ensure that its wireless networks remain open and provide equal access and non-discriminatory treatment for all content.“

Maintaining the existing system of net neutrality for our mobile networks is a win-win – its good for economic growth and good for the principles of free expression that underpin our democracy – the greatest platform the world has known for sustainable economic growth,” said Jonas Kron, Deputy Director for Shareholder Advocacy at Trillium.

The shareholder initiative at AT&T was organized by Open MIC – the Open Media and Information Companies Initiative – a nonprofit organization that seeks to inform corporations’ responsible media management practices. “Net neutrality is necessary to insure competition, entrepreneurship, innovation, and free expression in the digital economy,” said Michael Connor, Open MIC’s Executive Director. “That’s why it is so important that the investor voice be heard.”

The complete text of the AT&T wireless network neutrality proposal is available on the Open MIC web site and can be downloaded here (PDF).

For more information about recent net neutrality issues, visit www.openmic.org.

The Open Media and Information Companies Initiative – Open MIC – is a non-profit organization working to promote a vibrant, diverse media ecosystem through market-based solutions. Founded in late 2006, Open MIC is a project of the Tides Center, a 501(c)(3) non-profit organization.

For more information, contact:Michael ConnorExecutive Director212-537-9401mconnor@openmic.orgwww.openmic.org

Jonas Kron, JD

In the Winter 2011 issue of Investing For A Better World, our colleague Farnum Brown described shareholder advocacy as version 2.0 on SRI’s (socially responsible investment’s) travels towards 3.0, and discussed the importance of directly pressing companies to improve their environmental and social impacts. Similarly, Amy Domini of Domini Social Investments recently wrote passionately in the Huffington Post about the importance of shareholder advocacy as a meaningful way for investors to have a positive impact on the world. Both pieces touched upon the ongoing debate about what to call our field. What was once “socially responsible” or “ethical” investing is now “ESG” (environmental, social and governance) investing or “sustainability” investing. We welcome the newest arrival, “impact investing” into the lexicon as a term that encompasses the new types of enterprises being started by social entrepreneurs as well as one that describes what labor plans, religious shareholders and socially concerned investors been doing for three decades.

Both Farnum’s and Amy’s pieces also noted some examples of successful shareholder advocacy that speak to the impact of SRI/ESG investing. We thought it might be a useful contribution to the nomenclature discussions to devote some space to reviewing some of the most recent “impactful” shareholder campaigns from SRI/ESG firms (with apologies to language purists).

Toxic Chemical Phaseouts. Some of shareholder activists’ “greatest hits” have been in persuading companies to reduce or eliminate their use of toxic chemicals. They are found in virtually every ecosystem in the world, and up to 300 toxic chemicals have been found in humans. The following are examples of company actions taken following shareholder dialogues and/or proposals:

1. General Mills announced that it would no longer use bisphenol A (BPA) in its Muir Glen brand tomatoes packaging (2010)

2. Apple announced it would stop using brominated flame retardants in its computers (2007)

3. Sears Holdings (Sears and K-Mart) began a multi-year process of phasing out PVC products and packaging (2007)

4. Whole Foods announced that it would remove baby bottles and other products that contain BPA from its shelves (2006).

Political Spending Disclosures. The Citizens United Supreme Court case of 2010 renewed attention to the role of the corporate sector in politics and the public policymaking process. Shareholders have been working to lift the veil on corporate political spending since 2004. Assisted by the nonprofit Center for Political Accountability, shareholders have persuaded 52 major corporations (including 35 in the S&P 100) to disclose and require board oversight of their political spending with corporate funds, beyond what is required to comply with the laws.

Corporate Sustainability Reporting. Before SRI investors founded Ceres and the Global Reporting Initiative, standardized corporate sustainability reporting was virtually nonexistent, and where it did exist it was guided by trade association criteria that lacked public credibility. Today, thanks to persistent and diligent shareholder advocacy, about 1,800 companies produce reports based on the GRI guidelines, and demonstrating that “what gets measured gets managed.”

Lesbian, Gay, Bisexual and Transgender nondiscrimination policies. Shareholder advocates can rightly claim credit for persuading many of the nation’s most prominent corporations to adopt inclusive nondiscrimination policies. Activists have filed well over 200 resolutions that have led to better policies at 150-plus corporations – affecting the lives of millions of workers around the world. Many additional companies have changed policies simply in response to inquiries from shareholders.

Home Depot Wood Purchasing Policy. In the late 1990s a broad coalition of shareholders added their voices to the campaign demanding that the world’s largest retailer of lumber products stop selling wood products from endangered forests. Using the vehicle of a shareholder resolution and outreach to large institutional investors, the shareholders generated twice as much support as was typical for a resolution in the 1990s. The campaign resulted in a commitment to phase out sales of wood products from endangered forest areas within three years, and the company’s commitment to give preference to Forest Stewardship Council certified lumber wherever possible.

 Read the original article here.

ORRVILLE, Ohio - The J.M. Smucker Co. perked up coffee-lovers by announcing that after four straight price hikes in little over a year, the company was cutting prices by an average of 6 percent.

The Orrville food company, which is holding its annual shareholders meeting today, said Tuesday's news applies to the prices on a majority of its coffee products sold in the U.S., including top-selling Folgers Coffee, Folgers Gourmet Selections and Dunkin' Donuts packaged coffee sold in supermarkets.

Smucker cut prices in response to declines in the price of raw green coffee futures, which slipped to $2.10 per pound in July, down 9 percent from a 34-year-high of $2.31 per pound in April.

That's still 65 percent higher than the $1.27-per-pound price in April 2010, but represents the third-straight monthly decline after more than a year of steadily climbing prices, according to the International Coffee Organization.

Those rising prices, on top of higher fuel and other production costs, prompted Smucker to increase its own coffee prices four times:

• 4 percent on May 18, 2010;

• 9 percent on Aug. 3, 2010;

• 10 percent on Feb. 8, 2011;

• and 11 percent on May 24.

Smucker's rivals, including Starbucks, Maxwell House, Peet's Coffee & Tea and Green Mountain Coffee have raised their coffee prices over the past year, too, but have not yet responded to Tuesday's announcement.

Dominic Caruso, vice president of Caruso's Coffee Inc., a specialty coffee roaster in Brecksville, said that while prices for some kinds of raw beans have fallen, they remain significantly higher than they were a year ago.

He said that while mass-produced coffee blends like Folgers and Dunkin' Donuts can compensate for more expensive beans by increasing the amount of cheaper robusta beans, coffee houses that specialize in premium beans or single-source coffees have less wiggle room to lower prices.

"On certain coffees, like breakfast blends and doughnut shop blends, we're going to try to pass along that savings to the customer," he said. "But on other coffees, like African coffees or Indonesian Sumatras and Javas, we're stuck" with higher prices.

Caruso doesn't expect many coffee house regulars to switch to brewing at home, however, because coffee is still an affordable indulgence. "The customer who's going to the coffee shop is going there for a lot of reasons besides price," he said.

The price cut news also came a day before Smucker's annual shareholders meeting, where two shareholder groups that advise investors on responsible and sustainable companies are seeking more information about the company's long-term coffee strategy.

Calvert Investment Management Inc. of Bethesda, Md., and Trillium Asset Management LLC of Boston want shareholders to approve their Proposal 5, requiring Smucker to provide a report to shareholders about how the company plans to deal with possible climate changes and threats to family coffee farms within six months of the annual meeting.

Because coffee makes up 40 percent of Smucker's net sales and 48.6 percent of its profit, the groups wrote a letter to shareholders saying that they want to know how the company plans to respond to climate changes like global warming, changes in rainfall patterns, and its "responsibility for its impact on the coffee farming families in its supply chain."

Rebecca Henson, Calvert's sustainability analyst, said: "The proposal is meant to encourage the company to take more meaningful steps" to protect shareholders, because so much of its business depends on coffee. "We just think there's more they can do to manage this risk."

Calvert, a mutual fund which offers advice to more than 400,000 individual and institutional investors, owns 4,269 shares of Smucker stock.

Trillium, the oldest and largest independent adviser devoted exclusively to sustainable and responsible investing, advises several hundred clients who own about 90,000 shares of Smucker.

Both groups say Smucker has provided "woefully inadequate" guidance on these topics and that it "lags significantly behind" its global peers Nestle, Sara Lee and Kraft in providing that information.

Sara Lee, for example, aims to have 20 percent of its coffee volume certified sustainable by 2015, while Nescafe will distribute 220 million disease-resistant coffee plantlets to coffee farmers around the world by 2020.

Smucker declined to answer questions Tuesday about the price cut or Proposal 5, saying that it was in its quiet period prior to Thursday's earnings conference call.

In an Aug. 9 letter to shareholders, however, Co-Chief Executives Tim and Richard Smucker responded that the company had already answered those requests.

They said that "in making the decision and expending time and resources to voluntarily publish a corporate responsibility report, it has taken appropriate action to address shareholder concerns" and that adopting Proposal 5 would be "unnecessary, duplicative and inappropriate."

Read the original article here.

Posted: 17 May 2011 08:06 AM PDT

Coalition of socially responsible investors seeks to protect the First Amendment rights of their investors

Trillium Asset Management announced today that it has signed on to an amicus curiae brief in Western Tradition Partnership v. Attorney General of the State of Montana, currently before the Supreme Court of the State of Montana.  Trillium is joined by a coalition of investors led by Domini Social Investments managing more than $100 billion. The coalition represents a wide range of institutional investors, including mutual fund managers, a private wealth manager, foundations, and healthcare systems. The investor brief supports the state of Montana’s defense of the Montana Corrupt Practices Act of 1912 (“the Act”).

The provision of the Act banning corporate political speech was held to be unconstitutional by the Montana District Court in light of the U.S. Supreme Court’s Citizens United v. Federal Elections Commission decision (“Citizens United”). The State of Montana is appealing the decision believing that its law is distinguishable from the federal law at issue in Citizens United . The coalition agrees, and believes that the large publicly traded corporations in which they are invested are distinguishable from the voluntary “associations of citizens” that were before the Court in Citizens United.

 The Investor Brief — “Compelled Speech Is Not Free Speech”

The Supreme Court’s decision in Citizens United was premised on the fact that the corporations at issue were voluntary “associations of citizens” and that the members and shareholders of those corporations could register their objections to the corporation’s political spending throug h the “procedures of corporate democracy.” Neither of these facts is true with respect to the large, publicly traded companies in which Trillium and the other investors own stock.

Publicly traded corporations are not voluntary “associations of citizens” and should not enjoy the same rights that citizens do. These companies do not consult their shareholders regarding what candidates they choose to support, and may only act in the best interests of the corporation — a legal entity. They are legally barred from using corporate funds to express the political views of any individual or group of human beings.

Over two-thirds of the stock in publicly traded companies is owned by institutional investors. Institutional investors include mutual funds, pension funds, insurance companies, sovereign wealth funds and foundations. If corpora tions did seek out the political views of their shareholders, significant legal and practical barriers would prevent institutional investors from responding. These include obligations created by corporate, securities, agency, pension, and trust law, as well as structural impediments built into the proxy voting system. These investors cannot represent the disparate political views of their shareholders, policy holders and beneficiaries. In addition, because institutional investors are fiduciaries, they may not use their investors’ money to promote their own political interests.

 The Supreme Court has recognized the First Amendment rights of non-assenting members of associations, requiring that they be provided the ability to “opt-out” to avoid underwriting offensive speech. An “opt-out,” however, that may allow a union member to have a portion of her dues refunded is not available to shareholders in widely held companies. The investors argue that the Montana ban, as applied to large publicly traded companies, is constitutional and narrowly drawn to protect the First Amendment interests of shareholders that would otherwise be compelled to speak on political matters. “Compelled speech,” the brief argues, “is not free speech.”

Karl Sandstrom of Perkins Coie LLP, who served as national counsel for the coalition, said “Investors should not be required to surrender a right protected under the First Amendment in order to invest in our nation’s premier businesses.”

The members of the investor coalition have all engaged corporations in their portfolios on a wide range of social, environmental and corporate governance issues.

Additional co-amici include Calvert Asset Management Co., The Christopher Reynolds Foundation, Inc., Domini Social Investments, Harrington Investments, Inc., the Interfaith Center on Corporate Responsibility, Newground Social Investment, The Sustainability Group of Loring, Wolcott & Coolidge, and Walden Asset Management, a Division of Boston Trust & Investment Management Company.

For more information:

Contact Shelley Alpern, Trillium’s Director of ESG Research and Shareholder Advocacy at 617-423-6655

by Robert Kropp

April 14, 2011

 Led by Calvert and Trillium Asset Management, the investor coalition joins local activists to warn of potential ecosystem degradation if permits for proposed mine are approved.

SocialFunds.com -- The Bristol Bay region in southwest Alaska is home to the richest commercial wild salmon fishery in the world. According to Our Bristol Bay, "everything - communities, jobs, and the health of the entire ecosystem from grizzlies on down the food chain," depends upon the continued health of the wild salmon population there.

Given the pristine nature of the extensive wilderness around Bristol Bay, and the dependence of the economy on the commercial fishing activities there, local organizations have risen up in protest over a pebble mine planned for the area by the UK-based Anglo American and Northern Dynasty, a Canadian mining company. The consortium, the Pebble Limited Partnership (PLP), plans to apply for federal and state permits in spring of 2011, according to Save Bristol Bay, one of the local organizations.

Now, a coalition of investors, led by Calvert Investments and Trillium Asset Management and representing over $170 billion in assets under management, have urged the US Environmental Protection Agency (EPA) "to initiate a review process under the Clean Water Act to evaluate the mine waste impacts of the proposed Pebble Mine," according to a press release.

"This proposed mine has potentially devastating consequences for the people and the ecosystem of Bristol Bay," stated Jonas Kron, vice president at Trillium, thereby necessitating an EPA review.

A report on the environmental performance of Anglo American, the world's second-largest mining company, raises further concern, stating, "Whether it is the poor safety record of its platinum and formerly owned gold mines, the failure to control acid mine drainage in Zimbabwe, the repeated spills of mine waste into communities in Ghana and South Africa, the mercury air pollution in the US, degraded rivers in Ireland, or the unfair treatment of subsistence villagers displaced from their land in places such as South Africa, Anglo American can hardly be considered a model of good corporate citizenship."

"Ecosystem degradation is of serious concern to investors," Stu Dalheim, director of shareholder advocacy at Calvert, stated. "A recent United Nations report showed environmental costs from global human activity equate to an estimated US$ 6.6 trillion – approximately 11% of global GDP in 2008."

By 2050, the report continued, "global environmental costs are projected to reach $28.6 trillion, equivalent to 18% of GDP," in a business-as-usual scenario.