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our latest Social Impact Updates (pdf).
Second Quarter 2010
Protecting
Consumers from Toxins in Products
Domini has addressed the issue of
toxins in consumer products for years, through our Global Investment Standards
and our direct engagement with companies. During the quarter, Domini’s
shareholder proposal addressing Coca-Cola’s use of bisphenol-A (BPA) in
the linings of its beverage cans received a strong 22% vote at the company’s
annual meeting, in addition to substantial press coverage. This was the first
shareholder proposal ever filed to focus on BPA.
BPA is a chemical used in the lining of
cans, where it can leach into foods and beverages. Canada has banned the use of
BPA in baby bottles, and a recent report by the President’s Cancer Panel noted
a “growing link between BPA and several diseases, including various cancers.”
We would like to see the company actively pursue safer alternatives, and
although we have not been satisfied to date, we look forward to continued
dialogue.
Shedding Light on Corporate Political Activity
The U.S. Supreme Court’s January decision
in Citizens United vs. Federal Election Commission removed limits on
corporate financing of election advertising targeted at specific candidates and
issues. We expect to see the majority of this spending flow through trade
associations and other tax-exempt entities that can serve as conduits for
corporate political spending.
Domini’s proposal asking Goldman
Sachs to reveal its contributions to politically active organizations,
including trade associations, received a very strong 37% vote at the company’s
annual meeting. The New York City Public Advocate issued a press release and
held a rally outside Goldman’s annual meeting in support of our proposal. Our
dialogue with Goldman continues.
Measuring the Impact of Companies on Forests
During the quarter, Domini endorsed the
Forest Footprint Disclosure Project, a new initiative supported by the
British government and modeled on the Carbon Disclosure Project. The Forest
Footprint Disclosure Project, which represents investors managing more than $4
trillion, surveys companies about their impact on forests through their
exposure to four key commodities: timber, beef, soy, palm oil, and biofuels.
We filed a shareholder proposal asking Procter
& Gamble to describe how it assesses the impact of its supply chain on
deforestation, and how it plans to mitigate this impact. P&G is a major
consumer of palm oil, and demand for palm oil has driven the conversion of
natural forests to palm oil plantations in Indonesia and Malaysia. We withdrew
our proposal when P&G agreed to continue dialogue and improve its reporting
on these issues.
Seeking Better Conditions for Electronics Workers
During the
quarter, global attention was drawn to a spate of suicides among factory
workers at a 400,000-worker Foxconn
factory in southern China. The factory makes iPhones, iPads, and other products
for Apple, in addition to products
for Dell, Hewlett-Packard and others.
Domini helped
lead a broad coalition of over 40 European, Australian and U.S. investors in
calling for better conditions for Chinese factory workers. In a public
statement, the coalition condemned abusive workplace conditions in the global
electronics supply chain and called for a renewed focus on working conditions
by both companies and investors.
Internet
Censorship and Surveillance
For the sixth
consecutive year, we refiled a shareholder proposal asking Cisco Systems to address its impact on human rights. The proposal
asks the company for an “Internet Fragmentation Report” that would document
Cisco’s efforts to protect the Internet from government censorship and
surveillance.
Current
Shareholder Proposals
- AT&Tand JPMorgan Chase
(political contributions, omitted at SEC)
- Cisco
Systems (Internet freedom, pending annual meeting in November)
- Coca-Cola(toxins in consumer products, 22%
vote)
- Goldman
Sachs(political
contributions, 37% vote)
- International
Paper(sustainable
forestry, withdrawn)
- Nucor(slavery in Brazil, withdrawn)
- Procter
& Gamble(sustainable
forestry and palm oil, withdrawn)
- RR
Donnelley(sustainable
forestry, 10% vote)
As of June 30,
2010, Apple, AT&T, Cisco Systems, Coca-Cola, Dell, Goldman Sachs,
Hewlett-Packard, International Paper, JPMorgan Chase, Nucor, Procter &
Gamble, and RR Donnelley represented 4.5%, 3.8%, <0.1%, 0.3%, <0.1%,
0.9%, <0.1%, 0.6%, 2.6%, 0.2%, 0.4%, and 1.6%, respectively, of the Domini
Social Equity Fund’s portfolio. Foxconn was not held by the Domini Funds. The
composition of the Funds’ portfolios is subject to change.
The Domini Funds are subject to market risks and are
not insured. You may lose money. This information is provided for educational
purposes only, and should not be considered investment advice with respect to
any of the holdings listed. The Funds’ portfolios are subject to change.
