ENVIRONMENT: Environmental Code Gains Support, July 1993
SOCIAL TOPICS (Archive): ENVIRONMENT
Environmental Code Gains Support
Published, July 1993
A campaign to enlist corporate America in a commitment to increased environmental accountability picked up steam this year when Sun Company became the first Fortune 500 company to endorse the CERES Principles. A corporate code of environmental conduct, the principles challenge endorsers to report annually on their progress toward 10 goals.
Sun Co., the 12th largest oil company in the U.S., joined over 50 smaller companies that had already endorsed the principles. United States Trust Company and two holdings in our Innovations Fund, Lec Tec Corp. and Ben & Jerry’s, are also endorsers.
Members of CERES, a coalition of major environmental groups and socially responsive investment managers, hailed Sun’s acceptance of the code as groundbreaking. CERES board members are currently negotiating with several other Fortune 500 companies that have expressed interest in following Sun’s example.
“The model that we developed between Sun and CERES,” said Sun’s Chairman and CEO Robert H. Campbell, “is really the bridge by which other significant manufacturing corporations can endorse the CERES Principles, which I fundamentally believe many of them want to do, and at the same time remain true to the realities of their own world.”
Sun and other companies adopting the CERES code fill out an annual questionnaire detailing their efforts in such areas as waste reduction and disposal, energy conservation, management responsibility, auditing and sustainable use of natural resources. Requirements to publicly report on performance have been a major stumbling block for many companies considering endorsement.
We have been active in CERES on behalf of clients since its inception four years ago. Twenty-one other social investment groups are now working in the coalition with an equal number of environmental activists such as Friends of the Earth, National Wildlife Federation, Sierra Club and Earth Island Institute.
Aside from hosting CERES coalition meetings at our headquarters in Boston and providing financial support, we have pressed companies in our environmentally screened portfolios to sign the principles. Our campaign has boosted interest in CERES over the last three years as companies become more attuned to the environmental concerns of shareholders.
We initiated CERES-based shareholder actions on behalf of clients at three companies. At Consolidated Papers, Gannett and Oregon Steel Mills, we requested that management augment its reporting about environmental matters using the CERES standardized report form. We withdrew shareholder resolutions at Consolidated Papers and Gannett when both companies agreed to issue reports to shareholders detailing their environmental performance.
Oregon Steel Balks
Oregon Steel declined to negotiate a reporting agreement and placed our resolution on its proxy ballot this year and last. For the second year, we argued at the Oregon Steel 's annual meeting in April that the firm needs to beef up its reporting to investors about the environmental impact of its operations.
Speaking on behalf of our shareholder resolution, Joanie Mayer of our West Coast affiliate Capital Values Inc. said that “public accountability is the wave of the future for companies concerned with environmental performance.” She challenged the company to report annually on its environmental operations using the CERES standardized report form. The resolution garnered 8% of shareholder votes, up from 6% last year.
Our resolution at Oregon Steel Mills this year was among some 50 others filed at companies like Georgia Pacific, Great Lakes Chemicals, Exxon, Waste Management and the Big Three U.S. automakers. Sun received a similar resolution from the New York City pension system in May 1992. Even though the resolution drew just 6% support, management met afterwards with CERES board members and worked out an agreement. Campbell said talks with CERES convinced him the principles were in line with Sun’s own efforts to reduce waste and pollution.
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