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January 23, 2010
Apple Tells Shareowners to Reject Proposal for Annual Sustainability Report
by Robert Kropp
Asserting that industry peers HP and Dell issue such reports and are far more transparent on
sustainability issues, shareowner proposal filed by As You Sow requests that Apple produce a report
that includes greenhouse gas reduction targets.
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For the second year in a row, a shareowner resolution requesting the publication by Apple of an
annual sustainability report has been filed, and for the second year in a row Apple’s Board of
Directors has recommended that shareowners vote down the proposal.
Last year’s
resolution was filed by As You Sow, whose
Corporate Social Responsibility (CSR) Program has used shareowner advocacy to encourage positive
change within publicly held companies since 1997. This year, Calvert and the New York City Comptroller’s Office joined As You
Sow as co-filers.
A second shareowner resolution, requesting the establishment by Apple of
a Board Committee on Sustainability, was filed this year by John Harrington of Harrington Investments. In its proxy statement, Apple recommended that shareowners vote down that proposal as well.
Last year’s resolution from As You Sow won 8% of shareowners’ votes. Following that vote,
SocialFunds.com spoke with Conrad MacKerron, the Director of As You Sow’s CSR Program, who said,
“Apple's emissions data is very poor. Even with Al Gore sitting on its Board of Directors, Apple is
not doing world-class reporting on greenhouse gas (GHG) emissions, while its peers seem to have no
trouble doing so.”
Since then, MacKerron acknowledged in a recent conversation with
SocialFunds.com, Apple has improved aspects of its emissions reporting.
“Following our
resolution last year, Apple improved that part of their performance by reporting aggregate
emissions levels to the Carbon Disclosure
Project (CDP), instead of just product-to-product,” he said.
“We did acknowledge some
of Apple’s improvements in the text of our resolution,” MacKerron continued.
Noting that
over 2,700 companies issued sustainability reports in 2007, As You Sow’s resolution states, “Among
our industry peers, Dell, IBM, and Hewlett-Packard have taken leadership roles in these areas
through publication of comprehensive sustainability reports that address their company’s impacts
with regards to issues such as greenhouse gas emissions reduction, toxics, and supply chain working
conditions. These companies have provided detailed assessments of greenhouse gas emission exposure
and made reduction commitments.”
“Apple, however, lags behind global industry peers on
sustainability reporting,” the resolution continued. “Apple has not made public greenhouse gas
reduction commitments.”
Since a key strategy of shareowner activists is to engage in
meaningful dialogue with companies, SocialFunds.com asked MacKerron about the quality of the
conversations that As You Sow has had with Apple.
“Last year, we had a couple of phone
conversations with Apple to discuss its thinking, but there wasn’t much give-and-take, only the
reading of prepared remarks,” MacKerron said. “But Apple did report aggregate emissions levels to
the CDP, which was one of our primary concerns.”
“A culture of secrecy may be fine on the
marketing side, but not on the stakeholder side,” MacKerron added. “Almost everything on
sustainability reporting that Apple does is reactive, which is not something you want to see from a
company of its stature.”
“There hasn’t been a robust dialogue such as we enjoy at HP and
Dell,” he continued, “And they haven’t responded to this year’s resolution yet.”
Both HP
and Dell issue annual sustainability reports, which include disclosure of ambitious goals for GHG
emissions reduction. Both companies have been recognized within the electronics industry and beyond
for their efforts. HP, for instance, was ranked first in Newsweek’s Green Rankings of America’s 500
Largest Corporations.
Apple, on the other hand, has not made public emissions reduction
goals. While it has released aggregate GHG emissions to the CDP, such information has not been
published on its website.
While Apple and its industry peers have published information
about GHG emissions throughout the life cycles of their products, MacKerron expressed concern over
the lack of comparability in such data.
“In their assessments of emissions throughout the
life cycles of their products, Apple and other companies do not report in comparable ways,”
MacKerron said. “Until we know what their assessments are based on, we don’t have a clear idea of
their implications.”
“This is becoming an important issue for social investors,” MacKerron
continued. “The social investment community is going to have to get more sophisticated in their
analysis of the reduction targets released by companies. Right now, you’ve got quite a jumble. And
with carbon such an important issue, trade associations are going to have to develop common
reporting standards.”
MacKerron pointed out other areas in which Apple’s transparency is
lacking. “On social issues, Apple does not release information on OSHA safety numbers,” he said.
“Neither does it release any information on philanthropy, which many companies consider a key area
of their social responsibility.”
In its recommendation that shareowners vote against As
You Sow’s proposal, Apple stated, “The Company also provides its customers and shareholders with an
unmatched level of detail on its environmental performance.”
“The Company is already
substantially fulfilling—and in many respects exceeding—the request for information” in the As You
Sow proposal, the company’s statement continued.
MacKerron said, “Clearly, in terms of
emissions reductions targets, Apple is not doing so.” He noted the presence of former Vice
President Gore on Apple’s Board of Directors, and said, “Gore has the opportunity to make this a
world-class reporting company, but Apple is not out there in a way that supports Gore’s standards.”
Apple’s Annual General Meeting will be held on February 26.
“Anything a company
can do to reduce risk helps its reputation,” MacKerron concluded. “Good CSR reporting addresses
such risk. It’s frustrating to see that Apple does not choose to share such information.”
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