by Claude Solnik
Published: October 3, 2011

It looks like a few firms have agreed to open the books on their political donations, a year after the Supreme Court unceremoniously closed the door on once strict limits to contributions.

A trio of Fortune 500 companies whose stock is held by the New York State Common Retirement Fund have agreed to disclose their political campaign contributions and procedures, after requests from New York State Comptroller Thomas P. DiNapoli.

DiNapoli said Marriott International, Yum Brands (parent of Pizza Hut and Taco Bell) and Limited Brands(parent of Henri Bendel and Victoria’s Secret), whose stock is held by the state’s $146.9 billion retirement fund, agreed to disclose contributions to political campaigns and advocacy groups and outline their approval process for political contributions.

The comptroller and the Center for Political Accountability began a push last year for greater disclosure after the Supreme Court’s Citizens United decision opened the doors to big corporate contributions.

“There’s cause for concern when corporations make it their business to finance campaigns,” DiNapoli said. “Now we’re asking corporations to do the responsible thing for their shareholders and for the public. These three companies have heeded the call.”

After finding that about 70 of the S&P 500 companies had public policies regarding disclosing political donations, the comptroller and the center sent out letters requesting information from the remaining firms.

“We engaged with these companies. Some came forward and said we’ll work with you,” said Eric Sumberg, a spokesman for the comptroller. “We proposed shareholder resolutions at some.”

The retirement fund filed nine shareholder resolutions, leading to agreements with these three firms during the proxy season.

The New York State Common Retirement Fund as of Sept. 16 owned nearly $150 million combined in these firms’ shares including 1.6 million shares of Yum Brands worth $86.2 million; 873,292 shares of Limited Brands worth $35.2 million and 938,109 shares of Marriott International worth $27.4 million.

DiNapoli said he’s continuing to push for disclosure of corporate contributions as a way of monitoring spending of firms whose shares are held by the state an their interaction with the political process.

“Proxy season is in the spring,” Sumberg said. “Over the next couple of months, we’ll look at which companies to engage with the next season. Hopefully, we’ll have more successful engagements.”

 

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.

Nestlé Waters North America, PepsiCo and the Coca-Cola Company have all received a “B-” letter grade for their recycling efforts in a new report, which criticized the beverage industry’s pace in improving recycling.

“Waste & Opportunity: U.S. Beverage Container Recycling Scorecard and Report” by As You Sow is the shareholder advocacy group’s third review of the beverage industry since 2006.

The report gave Nestlé Waters North America the highest rank out of the major companies. In particular, the firm received the highest score on container recovery for establishing better recovery goals than its peers and having stated tactical strategies for attaining those goals, the report said.

As You Sow said the beverage industry has made slow progress on recycling since the last edition of the report in 2008. But the 2011 report does contain some signs that the industry may increase its commitments to recycling soon.

The Coca-Cola Company, which As You Says has been historically opposed to container deposit systems, indicated it is now “neutral” on a deposit system administered by an independent third party, an apparent softening of its position, according to the advocacy group.

Several survey respondents also said that in developing a recycling program, they are most likely to support programs that set recycling fees that are paid by producers or importers, included in the price of the product and administered by industry.

However, brewing companies were largely absent from the survey participants, with Anheuser Busch refusing to participate. As You Grow says this suggests the company’s transparency policies are getting worse. The firm received the second highest score in the report’s 2008 edition.

As You Sow, a group that seeks corporate accountability through shareholder advocacy, has announced the results of some its recent campaigns.

Among the large companies AYS filed resolutions with was Target. The resolution requested that the retail giant expand electronics recycling for its customers and disclose information on its disposal policies, including whether or not it exports e-waste to developing countries. The resolution failed, but mustered an impressive 30.8 percent of the company's investors.

AYS also filed a resolution calling on McDonald's to stop using polystyrene coffee cups, which got 29.3 percent support. A third resolution asking Starbucks to develop a more comprehensive recycling scheme for its beverage containers got 8.1 percent. Specifically, the resolution urged Starbucks to set more concrete goals for the use of recycled content in its containers and to better track how many customers bring reusable mugs into its stores.

In the past, AYS has persuaded Coca-Cola and PepsiCo to recycle 50 percent of their bottles and cans by 2015 and 2018 respectively. It's also gotten Nestle Waters NA to agree to an industry recycling goal of 60 percent of PET bottles by 2018.

AYS also filed a resolution with Proctor & Gamble and General Mills in support of extended producer responsibility, which will be voted on in October.

 

A new report by As You Sow lays out the financial risks of continued reliance on coal for electricity generation.

The online case studies demonstrate how the financial risks highlighted in the white paper are manifested in individual electric utilities.

CMS Energy Dominion Duke Energy Corp FirstEnergy Corp

As You Sow has identified three primary risks for investors who have utility and mining companies in their portfolios:

The unprecedented level of regulatory uncertainty. Existing regulations are being more strictly enforced as a result of litigation and the change of administration in Washington. New regulations in the pipeline will impart significant, unpredictable individual and cumulative costs on coal-reliant industries. Commodity risk due to volatile and rising coal prices and low natural gas prices. The changing nature of domestic coal markets and the prospect of future increases in the price of coal make its uncertainty as an inexpensive fuel for electricity production a new piece of the energy calculus in the U.S. Abundant supply and rapid price decline of natural gas in the U.S. has driven down power prices nationwide. This market condition is expected to persist for the foreseeable future. Increasing construction costs. Global price increases for construction materials due to new power plant construction in China and India have established a new floor for coal price construction. Domestic regulatory mandates, the age of the nation's coal fleet, and low power prices are driving decisions to replace the existing fleet of coal plants with other sources of power generation.

The clearest signal that the utility industry acknowledges these risks is the cancellation by public utility commissions and utilities of 153 new coal plants.i The plant cancellations amounted to $243 billion in investment decisions being reversed, or disinvested, from coal in the past four years.ii In 2010, a growing list of utility announcements carrying the message of existing coal plant closures and plans for new natural gas plants and alternative energy projects continued the trend.

This white paper demonstrates that these risks combine to make current and future investments in coal-dependent utilities and coal mining companies exceedingly precarious.