MD Calvert, one of the nation’s largest family of socially responsible mutual funds, completed another successful year in shareholder advocacy in 2006, lead-filing ten separate shareholder resolutions and co-filing an additional six.
All 16 resolutions were either voted on by shareholders or withdrawn by Calvert and its partners, once companies committed to addressing the proposal. Shareholder resolutions were just one element of Calvert’s broader advocacy initiative. The firm also engaged in active dialogue with company management and other stakeholders on a number of issues, advocating positive change in areas including global climate change, human rights, corporate governance and board diversity.
We are encouraged that many companies are beginning to recognize the impact that their policies can have on the most important issues of the day," said Bennett Freeman, Calvert’s Senior Vice President for Social Research and Policy. "Forward-looking corporations have become part of the solution to many of the world’s problems—from addressing global warming and developing renewable energy sources to protecting human rights and promoting workplace equity. Calvert is committed to mobilizing companies in which we invest to contribute to those solutions.”
In 2006, Calvert set four major strategic prioritiesto guide its advocacy work, consistent with the signature issues with which the firm has long been identified. Recent progress in each of the four areas is outlined below.
Environment and Climate Change
This year, as in the past, Calvert made global climate change a major area of focus, working through shareholder resolutions, company dialogue and engagement with specific companies. One resolution, co-filed with the Nathan Cummings Foundation, asking homebuilder Standard Pacific (SPF) to begin reporting on energy efficiency, received an impressive 39% vote. Another at Bed Bath and Beyond (BBBY), which was co-filed with Sierra Club Mutual Funds, generated a very solid 28% approval.
In addition to two shareholder resolutions on energy efficiency, Calvert continued to advocate for change through the Carbon Disclosure Project (CDP). Together with its partner Ceres (Coalition for Environmentally Responsible Economies), Calvert expanded CDP’s annual survey for the first time to include all companies represented in the S&P 500 Index.
Human rights, labor rights and indigenous peoples’ rights
As China was clamping down on freedom of information and expression, several US technology companies came under scrutiny by Congress and independent human rights organizations like Amnesty International and Human Rights Watch. Calvert believes that such companies must minimize any complicity in human rights abuses and fully disclose the ways in which they are complying with government policy. In 2006, Calvert joined a multi-stakeholder process convened by the Center for Democracy and Technology that includes leading companies, human rights NGOs, academic experts and other investment firms. The group will draft a set of global principles to guide policies and actions addressing these sensitive issues. Calvert also entered into dialogue with several of the companies operating in China to express its concerns.
Diversity and women
Calvert remained committed to board diversity, filing five separate resolutions in 2006 and withdrawing all of them as companies either added women or minorities to their boards or changed their charter language to encourage diversity. The firm extended this effort to encompass greater corporate diversity, particularly at the executive level. Greater diversity among upper management provides many of the same benefits as board diversity—a greater understanding of women and minorities, sensitivity to their needs and more appreciation of the marketing opportunities they present—and it also develops a greater pool of potential board members. Moreover, we continue to advocate gender fairness at all levels of the corporation. One resolution co-filed with Walden Asset Management at Home Depot (HD) calling for EEO-1 data disclosure received a resounding 36%, the highest level of support yet achieved for this type of resolution, and up dramatically from last year’s 29% result.
Governance and disclosure
Calvert continued its dialogue with companies on stronger corporate governance, advocating, as in the past, for board diversity and improved reporting of environmental and social programs and reporting. The firm is currently urging software giant Microsoft (MSFT) to provide greater disclosure of its political spending as part of a broader effort to increase the transparency around corporate political influence. Microsoft has made encouraging progress on this front. Another resolution seeking political contributions disclosure filed with St. Paul Travelers met with a very solid vote of 28%, as more shareholders realize the need for greater transparency in this area.
Via: (MD Calvert)