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

Published, Summer 2003

Companies, Progress, Results

Climate Change

As a part of the Carbon Disclosure Project, Walden, along with 34 other institutional investors, asked the FT500 Global Index companies to discuss their response to climate change and its associated risks. The resulting data indicates that companies without response plans are increasingly falling behind industry standards. Walden withdrew its resolution at Occidental Petroleum Corporation based on the understanding that climate change impact and carbon disclosure would be discussed more fully in its 2002 annual Health, Environment and Safety report.

A known neurotoxin, mercury can disrupt fetal and child-brain development and permanently impair mental abilities.

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.

As computers, which have relatively short life spans, become more ubiquitous, the disposal of computer equipment will have an increasingly large impact on the waste stream.

Walden was involved in a dialogue led by Calvert Group and As You Sow Foundation, through which Dell Computer agreed to measure the recycling rate of the computer equipment it sells, and to establish equipment recycling goals by March 2004. Dell will be the first computer company to establish this type of recycling goal.

Despite progress in hiring and promoting women and people of color, senior management teams remain largely white and male. Lesbians and gay men also continue to face significant discrimination at work. Increased inclusiveness and transparency on policies, practices and results will help break glass ceilings and foster a workplace free of discrimination.

Illinois Tool Works agreed to develop an employee relations/diversity section on its Web site and provide EEO information on request. Positive dialogue, led by the Sisters of the Blessed Sacrament, highlighted Merck’s commitment to foster corporate diversity and ensure accountability. FedEx is amending its policies and guidelines to explicitly include a prohibition against discrimination based on sexual orientation. 42.8 percent of shares voted in favor of a proposal at Dover for an inclusive non-discrimination policy on April 22. This is among the largest positive votes ever on a social issue when management recommended voting against the proposal.

Retailers face growing pressure to take responsibility for ensuring that their factories or suppliers do not manufacture products under sweatshop conditions, and do not use child or slave labor. Companies are urged to adopt International Labor Organization principles and to implement independent monitoring and reporting.

Unocal Corporation announced that it would adopt new principles addressing a wide range of labor and employee practices. Walden and our clients were involved in filing both this year’s resolution and the 2002 resolution, which received 32.8 percent support. Federated Department Stores committed to writing its suppliers of handmade carpets manufactured in India, Nepal, and Pakistan, urging them to become members of RUGMARK, an independent monitoring organization. Federated will also begin to educate its sales staff about RUGMARK.

The health pandemic in Africa is devastating entire communities. Lowered employee productivity also creates a financial incentive for companies to put in place strong health and preventative plans.

In response to our resolution, Colgate-Palmolive has agreed to include a section on the HIV/AIDS pandemic in Africa in its 2003 global sustainability report. The section will describe Colgate’s policy and some of its initiatives to address the terrible human suffering and loss in Africa due to HIV/AIDS.

Staggering director terms over multiple years prevents shareholders from annually registering their views on the performance of the board collectively and each director individually. Voting for each director every year assures accountability to shareholders.

BJ’s Wholesale Club has committed to a Board-level review of its classified board and McDonald’s Corporation agreed that the Nominating and Corporate Governance Committee will undertake an analysis of the issues relating to a staggered board. Walden’s resolution at Gillette calling for the annual election of Directors received 64 percent of the vote and at Avon Products, an overwhelming 80.5 percent.

Transparency & Disclosure

Increased transparency and accountability are important prerequisites for investors to make prudent investment decisions about the companies that they own.

Walden participated in a resolution at YUM Brands calling for a transparent review of policies, programs, and practices related to social, environmental, and economic sustainability throughout the company’s supply chain that received 35.2 percent of the vote.