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January 27, 2016
After a Successful Proxy Season, Walden Asset Management Sets Sights on 2016
    by Robert Kropp

The sustainable investment firm reports on its shareowner action during the 2015 proxy season, and begins 2016 with resolutions addressing corporate climate change lobbying and emissions reporting.


The shareowner engagement division of Walden Asset Management, led by Timothy Smith, has long been a leading sustainable investment firm in advocating for improved corporate performance on environmental, social, and corporate governance (ESG) factors. As evidenced by the firm's recently published Research & Engagement Brief, 2015—the 40th anniversary of Walden's existence—brought its successes to an even higher level.

The report reveals that during the year, Walden engaged with 127 companies—38% of its investment portfolio—a number which does not even include its collaborations with other sustainable investors. “The topics most frequently addressed in the year, in order, were climate change, board diversity, LGBT equal employment opportunity, lobbying disclosure, and sustainability reporting,” Walden stated.

“We consider engagement to be effective when we observe progress toward one or more of three potential outcomes,” the report continued. “Better corporate policies (e.g., amending board nominating charters to include explicit consideration of gender and race), more sustainable business practices (e.g., adoption of science-based greenhouse gas [GHG] goals), and increased transparency (e.g., implementing comprehensive lobbying disclosure or significantly improved sustainability reporting).”

On the basis of the above mentioned criteria, Walden recorded an impressive impact rate of 45%. More than half of its engagements on climate change led to improved corporate performance; almost half of those relating to LGBT equal employment opportunity did, as well.

Acknowledging that no industry standard for measuring the success of corporate engagement yet exists (a development that Walden strongly supports), the firm's refinement of its own process continues to evolve; “we hope (it) can serve as a model,” the firm stated.

The new year shows no sign of slacking in Walden's corporate engagement. As reported previously at SocialFunds.com, a new shareowner coalition coordinated by Walden and others seeks to shine a light on the practice of energy companies to fund, through direct lobbying and/or trade association membership, efforts to derail regulatory efforts to mitigate the worst effects of climate change.

“Investors have filed shareholder resolutions at 11 oil and gas companies,” a Walden press release states. “The resolutions urge the companies to fully disclose their lobbying activities and expenses (direct and indirect through trade associations) and to review their public policy advocacy on energy policy and climate change.”

More recently,
Walden announced the continuation of its engagement with Emerson Electric, requesting via a shareowner resolution that the company “adopt time‐bound, company wide goals for reducing total GHG emissions—taking into consideration the most recent guidance from the Intergovernmental Panel on Climate Change.”

While Emerson has reported a 45% reduction in emissions over the last ten years, other companies in the industrials sector have set time-bound, company wide emissions reduction goals, Walden pointed out.

“Emerson Electric’s underperformance relative to peers represents a missed opportunity to both increase operational efficiency and drive growth,” Walden stated. “Furthermore, Emerson Electric stands to experience reputational benefits by setting a strong GHG reduction goal.”

Emerson Electric's annual general meeting will be held on February 2nd.

 

 
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