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Third Quarter 2009
Domini
Urges Mandatory Corporate Sustainability Reporting
Companies cannot be held
accountable without data. The Securities
and Exchange Commission (SEC) was founded on the idea that consistent,
comparable disclosure to investors can help to mitigate risks and reform
behavior. For more than ten years, we have promoted the concept that this idea
encompasses social and environmental risks as well. Companies, therefore,
should be required to publicly disclose more information about their impact on
their employees, our communities, and the environment. Today, we may be closer
than ever to our goal.
During the quarter, Domini worked
with the Social Investment Forum on
a proposal asking the SEC to require companies to produce an annual
sustainability report using the Global
Reporting Initiative (GRI) guidelines, the world’s leading format for
corporate sustainability reporting. The SIF proposal also asks the SEC to
clarify that companies are already required to disclose certain long-term
social and environmental risks they face. The proposal, submitted in July, is
currently endorsed by more than 80 institutional investors.
Investors also file shareholder
proposals to obtain information on the social and environmental risks faced by
corporations. Beginning in 2003, however, the SEC began allowing companies to
exclude from their proxy statements proposals that ask companies to conduct a
“risk evaluation” of a social or environmental issue. Shareholders may ask how
the company is affecting climate change, for example, but may not ask how
climate change — or exposure to subprime lending — will affect the company.
In September, Domini participated
in an invitation-only meeting with SEC staff. We joined other shareholders in
opposing this line of decisions, arguing that the SEC has, in effect, been
asking us to pretend that we are not investors when we raise these issues.
This meeting produced rapid
results. In late October, SEC staff issued a new legal bulletin ending this
“risk evaluation” approach. We look forward to continuing this dialogue to
ensure that our right to file proposals on social and environmental issues
continues to be protected and strengthened.
In late July and early October,
Domini’s Managing Director and General Counsel took part in the first two
meetings of the SEC’s new Investor Advisory Committee. The 18-member committee
was established to provide the SEC with the views of a broad spectrum of
investors on the Commission’s regulatory agenda.
Kimberly-Clark Takes Leadership on Sustainable Forestry
For several years, Domini has led
a shareholder group urging Kimberly-Clark
— a major producer of tissue products — to improve its forestry practices and
to engage in dialogue with environmental groups such as Greenpeace. In June, Kimberly-Clark and Greenpeace jointly announced new
company policies including sustainable forestry and human rights commitments
that are very much in line with our requests. We congratulate Kimberly-Clark
and Greenpeace on this important achievement.
Domini Joins Call for Strong
Climate Change Treaty
Domini joined a group of 181
investment institutions, representing $13 trillion, in calling for a strong
global climate change treaty. The statement is purportedly the largest investor
statement on climate change ever issued. The investors warn of “catastrophic
economic and social consequences” if serious action is not taken at the
December global summit in Copenhagen.
The statement was produced by the
Institutional Investors Group on Climate Change, the Investor Network on
Climate Risk, the Investor Group on Climate Change/Australia and New Zealand,
and the UNEP Financial Initiative.
Human Rights
During
the quarter, Domini continued its work with the Global Network Initiative, a multi-stakeholder initiative opposing
censorship and surveillance on the Internet (corporate members are Google, Microsoft, and Yahoo).
For the fifth year in a row, Domini filed a shareholder proposal asking Cisco Systems to address its impact on
human rights. The proposal will come to a vote in November.
Domini Helps Launch Conflict Risk
Network
Domini
is pleased to be a founding member of the Conflict
Risk Network (CRN). CRN seeks to leverage the more than $500 billion in
combined assets of its institutional investor members to address mass
atrocities and avoid genocide in conflict zones around the world through
in-depth research on corporate activity in these regions and direct engagement with
companies. CRN is a project of the Genocide
Intervention Network, which began addressing the genocide in Sudan’s Darfur
region in 2006. As a founding member, Domini has a seat on CRN’s advisory board.
*The
press release and full proposal are available at http://www.socialinvest.org/news/releases/pressrelease.cfm?id=143
and www.socialinvest.org/documents/ESG_Letter_to_SEC.pdf.
Domini’s General Counsel is a member of the Securities and
Exchange Commission’s Investor Advisory Committee. This document represents
Domini’s views and does not necessarily reflect either the views of the
committee, or the views or regulatory agenda of the Commission, the
Commissioners, or Commission staff.