SOCIAL TOPICS (Archive): HISTORY OF WALDEN ASSET MANAGEMENT/SRI

Published, Summer 2001

ISSUE COMPANY RESULT Mercury Pollution: A dangerous neurotoxin, mercury pollution impairs fetal and child brain development through fish consumption. Improper disposal and breakage of mercury thermometers is a major pollution source. CVS Longs Drug Stores Companies agreed to phase out sale of mercury thermometers through dialogue. Genetically Engineered (GE) Food: Scientific conclusions about the risks versus benefits of GE foods are uncertain. Long term safety testing of GE products is inadequate and consumers overwhelmingly want to know if GE ingredients are in their food. Tricon Global Restaurants Committed to explore this issue through a series of meetings with senior corporate staff knowledgeable about procurement and product development. Recycling of Plastic Beverage Containers: Technology exists to reduce significantly plastic waste by using at least 25% recycled content in plastic containers. And overall beverage container recovery rates have declined from 50% in 1994 to 35% in 1999. In “bottle bill” states, rates are 80%, but companies oppose. Coca-Cola PepsiCo Coca-Cola has begun using 10% recycled content in about one-third of its containers, and has engaged stakeholders on a variety of recycling issues. In contrast, PepsiCo is largely unresponsive. Drilling in the Arctic National Wildlife Refuge: Walden is co-leading an international shareholder effort to protect this environmentally sensitive national treasure. The initiative led to a challenge to shareholder rights under UK law when BP omitted our resolution from the ballot. BP Walden addressed concerns with BP Amoco at the annual meeting in the UK and is coordinating company follow-up with additional stakeholders on the rights of foreign (U.S.) shareholders to participate in the proxy process. Equal Employment Opportunity (EEO): Despite recent progress in hiring and promoting women and people of color, senior management teams remain largely the domain of white men. Increased transparency on EEO policies, practices and results will help break glass-ceiling barriers. Bank of America EMC Home Depot WorldCom Bank of America, Home Depot and WorldCom committed to disclosure of EEO information. EMC is beginning a dialogue with Walden after mistakenly omitting our resolution in its proxy, a violation of securities law. Predatory Lending: Higher rate “subprime” loans can be a legitimate option for individuals with higher credit risk. These lending practices become predatory when they exploit vulnerable populations, such as deliberately lending to borrowers with inadequate income who will subsequently default. Lehman Brothers Company shared its internal policies to avoid underwriting predatory loans. Walden is urging Lehman to make the standards public to encourage other underwriters to improve their own practices. Executive Compensation: Investors are pressing companies to link senior executive compensation to financial and social performance indicators, thus committing managers to meet specific social goals. Kohl’s Department Stores Led by religious investors, dialogue resulted in a commitment to include compliance with labor standards as a factor in determining executive compensation Sexual Orientation Non-discrimination: Studies reveal that gay men and lesbians continue to face significant harassment and discrimination at work. About half of major U.S. companies explicitly bar discrimination based on sexual orientation, a policy that leads to competitive advantages in recruitment and employee retention. American International Group (AIG) Successfully encouraged AIG to amend its policy to explicitly bar sexual orientation discrimination. AIG had been the largest U.S. financial services company not to have such a policy. Human Rights and Global Labor Standards: Apparel retailers face growing pressure to take responsibility for ensuring that suppliers do not manufacture products under “sweatshop” conditions. Companies are urged to adopt International Labour Organization (ILO) principles and to implement independent monitoring. Jones Apparel Walden was an active participant in discussions led by New York City pension funds in which Jones Apparel pledged to respect ILO principles, expand monitoring and continue dialogue.