By Carly Greenberg
From the Summer 2013 Edition of Values
In the past several months, Walden representatives have attended numerous company annual shareholder meetings to engage corporate management and board members in person on environmental, social, and governance (ESG) concerns. Annual meetings represent an opportunity to put important ESG issues on the corporate and public record as well as move shareholder resolutions to a vote. This year, Walden led or co-led 19 resolutions. Eight were withdrawn after successful negotiation with the company.
Political Spending and Lobbying
Walden’s efforts to pursue greater transparency in corporate political spending and lobbying activities have not abated since the November 2012 election. We filed supportive comments to the Securities Exchange Commission (SEC) as it considers adopting a new rule requiring disclosure of corporate political spending by all companies.
Resolutions at 3M and PepsiCo were withdrawn after the companies agreed to add significant disclosure to their websites on lobbying activities, including information on how trade association dues are allocated for lobbying purposes. Although ConocoPhillips, JP Morgan Chase, Time Warner Cable, and UPS improved their reporting of lobbying expenditures and policies, resolutions at these companies were not withdrawn due to inadequate disclosure of trade association affiliations and indirect lobbying activities.
To leverage our partnership with the Thirty Percent Coalition, an association seeking to increase gender diversity on corporate boards (see page 3), Walden sent letters to six portfolio companies that lacked female board members. Since the initial outreach, American Science and Engineering, Riverbed Technology, and Sapient Corporation have added a woman director to their boards. Additionally, Walden withdrew its resolution with NetApp after the company agreed to expand disclosure in its proxy statement on the value of racial and gender diversity on the board. The company also identified steps to help build a more diverse candidate pool for new board nominations.
Supply Chain Management
The April 24 collapse of Rana Plaza in Dhaka, Bangladesh—the worst disaster in garment industry history—plus fires at other garment factories in the country have killed more than 1,500 garment workers (most of them women) and injured countless others. These tragic events spotlight the glaring lack of worker health and safety standards in Bangladesh and the challenge to global apparel companies to ensure humane working conditions in their supply chains. Walden joined 120 other investors with more than $1.5 trillion in combined assets calling on retailers, such as Wal-Mart and Target, to sign and join the new Bangladesh accord for better safety measures at garment factories. The signatories to this treaty agree to finance and implement a fire and building safety program in Bangladesh for a period of five years and permit the International Labor Organization (ILO) to monitor progress. Walden also sent separate correspondence to TJX Companies, inquiring how the Bangladeshi accord will affect their vendor compliance program.
In recent years, Walden has been a part of a broader investor group led by Domini Social Investments to encourage accountability and transparency in Apple’s supply chain. The group periodically holds calls with Apple on its progress toward ameliorating unacceptable labor practices at its largest supplier in China, Foxconn. Recently, we were pleased to see progress in support of independent union representation, especially since credible collective bargaining could be the most effective path to sustainable changes in corporate practices. Ongoing debate regarding Foxconn’s progress leads us to continue to monitor the situation.
Walden co-led a group of nine other investors with over $30 billion in combined assets under management in encouraging small and mid-sized companies to embrace sustainable business practices and begin sustainability reporting. To date, 96 companies have been contacted. Among Walden client holdings, Calgon Carbon, Coherent, Select Comfort, and Wabtec have agreed to initiate ESG reporting, and productive dialogues with Men’s Wearhouse and Commercial Metals are underway.