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

Published, March 2003

2002 may well be remembered as the year when corporate scandals caused investor confidence to plummet and the stock market to roil. 2003 is shaping up to be the year that investors are stepping up and being counted - using their voices and votes to call for strengthened governance and corporate responsibility. According to the Investor Responsibility Research Center, as of February 1, more than 860 shareholder proposals had been filed, compared to about 800 in all of 2002, ExxonMobil alone received 23 proxy resolutions on global warming, human rights and corporate governance issues. Moreover, proponents of corporate governance and social issue resolutions are increasingly finding common ground in recognizing both areas as fundamental to good management and good performance.

Among these shareholder proponents are Walden clients - whose collective voice is a formidable force for change. Twenty-seven shareholder resolutions have been filed at 25 companies on a breadth of issues, and Walden is a lead proponent in negotiations with 17. (See Walden’s 2003 Shareholder Resolutions, below.) Many more companies are actively engaged in dialogues with us. Even before the 2003 annual general meetings occur and the shareholder votes are tabulated, Walden has seen positive movement.

Colgate-Palmolive (CL) has agreed to include a section on the HIV/AIDS pandemic in Africa in its 2003 global sustainability report. The section will describe CL’s policy and some of its initiatives to address the devastating human suffering and loss in Africa.

SUPERVALU provided public confirmation that sales of mercury thermometers have been phased out at all of its retail and distribution companies. Walden estimates that 89 percent of all pharmacy chain stores have now phased out such sales.

BJ’s Wholesale Club has committed to a Board-level review of its policy to have shareholders elect directors in classes for multiple year terms (a staggered board), rather than the preferred annual election of all directors. Annual election provides for greater accountability to investors.

Illinois Tool Works agreed to develop an employee relations section on its Web site and to provide comprehensive equal employment opportunity (EEO) information to investors upon request. Transparency on diversity goals and statistics is key to continued progress toward eliminating employment barriers faced by women and minorities.

Dell Computer, in response to a dialogue led by the Calvert Group, has agreed to set up a system to measure the recycling rate of computer equipment it sells, and to establish equipment recycling goals by March 2004. Dell will be the first computer company to establish quantitative recycling goals.

These changes in policies and practices resulted directly from shareholder input. But many of the most important company initiatives never enter the shareholder realm. Such is the case for approximately five dozen major corporations filing an amicus brief to the U.S. Supreme Court in support of the University of Michigan’s fight to maintain race as a factor in the admission process. Standing against the Bush Administration decision to oppose the university, these companies argue that affirmative action in higher education is critical to building a high quality and diverse workforce. Some of the companies offering strong support include Coca-Cola, Fannie Mae, General Motors, Intel, Lucent, Microsoft, Pfizer, Procter & Gamble, Merck, and Johnson & Johnson. Concerned investors can celebrate this positive and significant initiative championed by so many companies. –H. Soumerai