February 28, 2012
Zevin Asset Management Grows into a Corporate Engagement Powerhouse
by Robert Kropp
The Boston-based investment manager, with $335 million in assets under management, has co-filed 14
shareowner resolutions for the 2012 proxy season.
Shareowner engagement is enshrined as one of the six Principles for Responsible Investment (PRI), and most
sustainable investors consider the practice to be central to their investment strategies.
The forms shareowner engagement can take are various. The number of resolutions
coordinated by Ceres has increased dramatically
in the past three years, and 111 resolutions were filed by members in 2011. At the Interfaith Center on Corporate Responsibility
(ICCR), the decrease in the number of resolutions filed by members has been equally dramatic,
from 308 in 2010 to 160 thus far in 2012.
The 2012 Proxy Preview of As You Sow
counts 349 resolutions filed thus far for this year's proxy season, down slightly from the 360
filed by the same time last year.
But ICCR also reports that its members are currently
engaged in 170 ongoing dialogues with corporations. Laura Berry, ICCR's Executive Director, told
SocialFunds.com recently, "There are a bunch of people working on shareholder proposals, and we're
excited about all the work being done in the space."
And Ceres noted that 110 of the 230
sustainability-focused resolutions filed in the last three years were withdrawn after companies
agreed to address investors' concerns.
As Sonia Kowal, the Director of Socially
Responsible Investing for Zevin Asset
Management, told SocialFunds.com, "We're not filing for the resolution's sake, we're trying to
get companies to change their practices."
The Boston-based Zevin, with $335 million in
assets under management, has increased its activism since Kowal joined the firm in 2009. That first
year, Zevin co-filed two shareowner resolutions. This year, the number stood at 14 until two were
Kowal was one of the signatories to a letter made public yesterday, in which
the filers of a resolution requesting that Chevron disclose it payments to the military regime in
Burma expressed their frustration at the unproductive dialogue that occurred. Kowal said, "The call
seemed at cross-purposes. They really weren't interested in answering our questions, and basically
took no responsibility for the money they were pouring into the country."
on country selection criteria was but one of five co-filed by Zevin with Chevron this year. The
others request that the company separate the positions of Chair and CEO, appoint a board member
with environmental expertise, allow shareowners to call special meetings, and report on risks
associated with hydraulic fracturing.
Zevin has also filed two resolutions with Exxon this
year, requesting increased disclosure on its hydraulic fracturing and oil sands operations.
"We normally would not hold companies like Exxon and Chevron," Kowal said. "We have limited
holdings in the oil and gas space. We do have a large number of private clients with legacy
holdings, and those holdings often include the companies that we co-file with."
resolution, co-filed by Zevin along with Walden Asset Management, has already come to a vote this
year. A request that Emerson Electric publish a sustainability report gained 35.3% of shareowner
support in its second year.
"We met with the company last year, and they were clearly
unhappy with the resolution and didn't see the need for sustainability reporting," Kowal said. "I
think it has to do with embedded personalities within the company that don't see the value of
"We like the company as a whole and feel they are actually a responsible company,
but we definitely see a risk over the longer term of them not being aware of their footprint," she
One of the two withdrawals thus far this year appears to be an unqualified
success, as Colgate-Palmolive agreed to publish a sustainability report that includes a policy on
sourcing sustainable palm oil. The company also agreed to report to the Roundtable on Sustainable Palm Oil (RSPO).
engagement, Kowal noted, was spearheaded by Calvert Investments.
"Colgate-Palmolive is taking
active steps to meet the spirit and intent of the request outlined in our resolution," Ellen
Kennedy of Calvert wrote in the withdrawal letter. "We believe that greater sustainability
disclosure will further strengthen the company's reputation, ensure a more predictable supply
chain, and provide long-term value."
The second withdrawal, a request that Pfizer disclose
its political lobbying expenditures, occurred because the resolution effectively duplicated an
earlier one submitted by noted shareowner activist Evelyn Davis.
As You Sow's Proxy Preview states, "Political spending proposals continue to increase in both
number and focus, now making up nearly a third of the 349 social and environmental proposals filed
so far," a not surprising development considering that 2012 features the first Presidential
election since the Supreme Court's Citizens United decision in 2010. Most of the resolutions
co-filed by Zevin, Kowal noted, address lobbying expenditures.
"We differ from most SRIs
in that we are in favor of shareholder voting on political contributions," she said. "There are
good arguments against it, but we feel it's a responsibility that shareholders have to bear."
Demonstrating that effective corporate engagement does not always require the filing of
shareowner resolutions, Kowal described Zevin's work on criminal background checks in hiring by
"We did a letter-writing campaign and wrote to about 100 companies that have
significant operations in Massachusetts, asking them about details of their criminal background
check policies," she said. "We had about 50 responses from companies, which was a lot higher than
we expected. We benchmarked the responses against best practice and wrote a report
Kowal noted that Pensions & Investments recently ranked Zevin among the top
ten investment managers over one- and five-year periods.
"It's long-term outperformance,
which is the important thing, and our focus on ESG (environmental, social, and corporate
governance) helps us outperform," Kowal said. "It reduces risk for our clients. In our top-down
analysis of sectors and regions, we're looking for skeletons in the closet, and some of those
skeletons can be comprised of ESG factors."