April 29, 2004
First-Year Resolution on HIV/AIDS Garners Significant Support at Pharmaceuticals
by William Baue
The HIV/AIDS pandemic threatens human life and shareowner value, according to a shareowner
resolution filed at companies in the pharmaceutical, oil, and beverage sectors.
"There are more than 42 million people worldwide currently living with HIV/AIDS, over 95 percent of
whom live in the developing world. Effective treatments for HIV/AIDS exist, but only 4 percent of
those who need treatment have access to it. According to UNAIDS, the HIV/AIDS pandemic is 'creating or
aggravating poverty among millions of people, eroding human capital, weakening government
institutions, and threatening business activities and investment.' The World Bank reports that in southern Africa and other affected
regions 'a complete economic collapse will occur' unless there is a response to the HIV/AIDS
pandemic. Even 'a delay in responding to the outbreak of the epidemic, however, can lead to
These sobering facts and opinions are taken from a shareowner
resolution filed at four major pharmaceutical companies asking them to report on the effects of
the pandemic on their businesses, focusing on emerging markets. The resolution also asks them to
disclose what measures they are taking to mitigate the risks and take advantage of opportunities
presented by the HIV/AIDS as well as the tuberculosis and malaria pandemics. The resolution
targets these major pharmaceutical companies because they have been faulted for not doing enough to
make HIV/AIDS medications more readily available to the most needy in developing regions, people
who can least afford them.
Within the past week, the resolution, which is being filed for
the first time at these companies, received 13.9 percent support from Merck (ticker: MRK) shareowners,
9.8 percent at Pfizer (PFE), and 8 percent at Abbott
Laboratories (ABT). Bristol-Myers Squibb (BMY) shareowners
will vote on the resolution at its May 4 annual meeting.
These results significantly
surpass the US Securities and Exchange (SEC)
threshold that requires first-year resolutions to receive support from more than 3 percent of
voting shareowners in order to be refiled the next year. The resolutions are part of a larger
campaign coordinated by the Interfaith Center on Corporate Responsibility (ICCR), a coalition of 275 faith-based institutional investors
managing an estimated $110 billion in assets.
ICCR members filed the resolution at many
other companies across multiple diverse sectors.
"HIV/AIDS is an economic, security, and
humanitarian issue which cuts across industry lines--every company with a global footprint needs to
be prepared to face the consequences of the global HIV/AIDS pandemic," said Dan Rosan, ICCR's
program director for public health, who is coordinating this campaign. "Oil companies are
particularly vulnerable because they have to go where the oil is, so if an oil-producing region is
hard-hit by HIV/AIDS--and Angola and Nigeria certainly qualify--the oil majors have to deal with
ICCR members have filed the resolution with ChevronTexaco (CVX), where it received 8 percent
support from shareowners yesterday. Interestingly, filers withdrew the resolution at ExxonMobil
(XOM), which has
a history of staunchly opposing resolutions, in favor of collaborating with the company on the
"Exxon-Mobil doesn't have a good track record of being receptive to shareowner
dialogue and resolutions, though they do have a good track record on dealing with malaria," Mr.
Rosan told SocialFunds.com. "ExxonMobil responded very differently to the HIV/AIDS resolution than
they do to most resolutions--they produced top-level executives, who discussed the company's
policies and practices candidly."
"We're dealing with the company as good-faith partners
based on their actions around this particular issue, and we're hoping to use this HIV/AIDS
resolution to help build a constructive relationship that can impact discussions on other issues
and other resolutions," he added.
The resolution was similarly withdrawn at Ford (F), Johnson &
and Eli Lilly (LLY). The SEC allowed American
International Group (AIG) to omit the resolution from its
proxy under the "ordinary business" rule, reasoning that insurers' actuarial activities address
such risks as a matter of course.
"I strongly disagree with the SEC's interpretation, but
it was a very narrow decision that does not affect the status of the resolution at other
companies," said Mr. Rosan.
The resolution received a remarkable 97 percent support from
shareowners, who were clearly influenced by the company's unusual recommendation of a "yes" vote.
Competitor PepsiCo (PEP), has not followed suit. Last
year, 7.5 percent of PepsiCo shareowners supported this resolution, which will go to vote again at
the company's May 5 annual meeting.
"The numbers have just been terrific," said Mr. Rosan,
indicating "the unusual degree to which ICCR has successfully moved corporate policy on HIV/AIDS in
such a short time--at company after company, ICCR's HIV/AIDS program has changed policy and saved