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April 12, 2001
Environmental Groups Endorse Shareholder Resolutions
    by Mark Thomsen

Environmental advocates ask for support for pro-environmental resolutions at a wide range of companies.

More and more, activist groups are viewing shareholder activism as a means of achieving changes in corporate behavior. As the 2000 corporate proxy season shifts into high gear, a coalition of five environmental groups recently announced their support of over 75 pro-environment shareholder resolutions. The coalition, led by Friends of the Earth, will encourage their supporters to back the resolutions.

"Claiming one's power as a shareholder and supporting environment-friendly proposals at corporations is an important way people can push for more responsible corporate behavior and exercise environmental responsibility in their everyday lives," said Michelle Chan-Fishel, coordinator of Friends of the Earth's Green Investments program.

Friends of the Earth divided the resolutions in to six major categories: environmental codes, climate change and energy, threatened people and places, genetically engineered food, toxics and waste, and governance and environmental disclosure. These major categories were broken into sub-categories; for example, toxics and wastes included adopting a non-toxic chemical policy, disclosing costs of PCB cleanup delay, PVC phaseout, adopting a comprehensive recycling strategy and phasing out chlorine bleached paper.

Endorsement from the coalition required that the resolutions advocate improving environmental policies, performance or disclosure, or eliminating environmentally harmful practices or projects. Resolutions that did not have a clear environment-related request had to include explicit environmental language in supporting statements or be filed at companies where environmental issues play a role in the shareholder dialogue.

Along with Friends of the Earth, the coalition includes well-known environmental advocates Greenpeace, U.S. Public Interest Research Group, International Rivers Network and Project Underground. Some of these groups are somewhat new to shareholder activism, but are taking to it quickly. Last year, for example, Greenpeace filed a shareholder resolution with Royal Dutch/Shell after acquiring 4,400 shares of the oil giant's stock.

Friends of the Earth has been involved in shareholder activism for over ten years, and is busy co-filing resolutions and providing technical assistance to other organizations. For example, it is working with religious investors on Campaign ExxonMobil, which aims to hold ExxonMobil (XOM) accountable for its role in climate change and climate change policy. This year Friends of the Earth is co-filing a resolution that asks the company to invest in clean and renewable energy.

Friends of the Earth also also actively talks one-to-one with companies on specific issues. It is on the team holding dialogues with Morgan Stanley Dean Witter (MS), Citigroup (C) and Merrill Lynch (MER) on the Three Gorges dam project and environmental management systems governing credit, lending and underwriting.

Shareholder activism successes on the environmental front often have come after repeated resolutions and incremental support from diverse stakeholders. General Motors (GM), for example, finally left the Global Climate Coalition after years of shareholder resolutions on climate change.

The five environmental groups endorsing these resolutions are leading the way for other similar groups to follow. Persistence and wide support are two key elements of shareholder activism success. The more groups that show their support for pro-environmental shareholder resolutions, the better chance there is that companies will finally see the light and change their policy.

For a list of the resolutions categorized by topic, please click here.


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