We believe investors can play an important role in raising awareness of environmental concerns through direct dialogue with companies as well as government and community stakeholders. Following is a list of communications recently undertaken.
In February 2013 Oxfam published a report on labor rights in Unilever’s supply chain, focusing on a factory in Vietnam. The results showed labor rights violations, low pay, and hazardous working conditions. We support Unilever’s decision to partner with Oxfam to evaluate its factory conditions and have the results be made public. However, Portfolio 21 has written Unilever to inquire about what specific next steps will be taken to improve the working conditions in its factories globally.
Portfolio 21 and other institutional investors representing over $1.3 trillion in assets, in addition to many of the nation’s leading women’s organizations, joined together to send a letter to the 41 companies within the S & P 500 that have no women on their boards. Together we urged these companies to take steps to embrace gender diversity.
The S&P 500 Index is a broad-based unmanaged index of 500 stocks, which is widely recognized as representative of the U.S. equity market. It is not possible to invest directly in an index.
Portfolio 21 wrote to the state legislators and Governor Kitzhaber to express our support for the Oregon Clean Fuels Program (CFP) and to advocate lifting the existing 2015 sunset provision. As an Oregon-based investment company and active member in the business community, we view the CFP as a significant opportunity for statewide economic growth. The CFP advances Oregon’s economic and environmental interests by encouraging investment in clean fuel technology. We view this program as an important tool in minimizing the risks of climate change.
On January 21, 2013 President Obama was inaugurated for his second term. During his address, the President noted that climate change is a top priority. To encourage the President to move quickly on this pressing matter, Portfolio 21 supports the Climate Summit 2013 Coalition.
Portfolio 21 Investments joins other business leaders, religious groups, non profits, and foundations in encouraging President Obama to host a national summit on climate disruption within the first 100 days of his new administration. As signatories, we believe that the President’s commitment to create “a conversation across the county” is essential and timely. The goal of the summit would be to prepare for and build resilience to climate impacts.
Friends of the Earth (FOE) recently launched a “Make It Better” campaign targeting Apple and Samsung. The goal of this campaign is to bring transparency to the sourcing of tin and to protect the remaining natural resources of Bangka, which is primarily responsible for making Indonesia the world’s largest exporter of tin. According to FOE’s report, there is about two grams of tin in every phone. Although Apple is not solely responsible for the environmental degradation in Bangka caused by tin mining, as the world’s largest company in terms of market cap Apple has the ability to move the sector forward. Portfolio 21 has requested Apple provide information on how it is working to bring transparency to all of its procurement practices, and Indonesian tin in particular.
United Natural Foods has an established set of six core values that include integrity and respect in all of its actions, trust and accountability in all relationships, and open and honest communication with its employees. However, the does not appear to be abiding by its core values. Unlawful and unfair labor practices, specifically at the company’s Auburn, WA plant have resulted in a worker’s strike. This strike commenced on Tuesday, December 11, 2012. In response, Teamsters Local 117 organized a conference call, in which Portfolio 21 took part, to educate stakeholders on myriad workers’ rights abuses. Portfolio 21 wrote the company to share our discontent and urge the company to engage in correspondence with the labor unions.
UPDATE: On December 13, 2012 Teamsters Local 117 voted to end its strike. However, when 72 warehouse workers who were prepared to return to work after the three day strike were permanently replaced, the strike resumed.
As a signatory of the United Nations Principles for Responsible Investment, Portfolio 21 Investments joined with other institutional investors to encourage companies with exposure to five key commodities (palm oil, beef, soy, timber, and biofuels) to disclose their current forest footprint to the Forest Footprint Disclosure project.
Portfolio 21 Investments encourages the Environmental Protection Agency (EPA) to initiate a Clean Water Act Section 404(c) review process for Alaska’s Bristol Bay region. The Bristol Bay watershed is the center of a $2.2 billion regional fishing industry and is an essential part of many companies’ supply chains. Large scale mining is placing this watershed at risk. Section 404(c) of the Clean Water Act provides a scientifically sound way to address these concerns. Under established precedents, practices and policies within the Clean Water Act 404(c) program, the EPA may prohibit or restrict the disposal of mine waste if it determines that it will have an “unacceptable adverse effect” on municipal water supplies, shellfish beds and fishery areas, wildlife, and recreational areas.
Portfolio 21 Investments joined other citizens and organizations across the country in signing a petition asking President Obama and Governor Romney to tell the American people what their positions are on climate change. The petition seeks to make climate disruption a central issue in this year’s Presidential election. Moreover, the signatories have requested that the next president hold a national summit on climate disruption within their first 100 days in office.
Portfolio 21 Investments supports As You Sow’s campaign and shareholder proposal urging Proctor & Gamble to expand its packaging initiatives to include Extended Producer Responsibility (EPR). EPR is a corporate and public policy that shifts accountability for financing the collection and recycling of materials from taxpayers and governments to producers. EPR increases the volume of collected materials so that closed loop recycling is more commercially feasible. EPR systems can create new markets for post-consumer packaging.
Portfolio 21 engaged with four of its small cap holdings, Generac, Tennant, Ameresco, and Ormat, to encourage action on initiating environmental reporting,. Portfolio 21 has found that many smaller companies do not track environmental key performance indicators, or they may track some data but not make it publicly available. By engaging with the companies and demonstrating interest in this information we expect that as companies grow they will more readily develop sustainability programs and adopt guidelines to report on progress.
Update, 9/30/12 – Tennant responded that the company is utilizing Global Reporting Initiative guidelines for its upcoming corporate sustainability report. It will also be reporting on its LEED (Leadership in Energy and Environmental Design) initiatives and how it is reducing its environmental footprint across its product portfolio.
The U.S. Alien Tort Statute (ATS) was part of the Judiciary Act of 1789; ATS was revived in 1980 and has become an essential statute in protecting human rights committed by both individuals and corporations. ATS currently allows foreign individuals to bring civil suits in U.S. courts for violations of the law of nations and U.S. treaty obligations; however, this law is being contested before the U.S. Supreme Court in Kiobel v. Royal Dutch Petroleum (Shell). The plaintiffs are suing Shell for allegedly aiding and abetting the rape, torture, and extrajudicial killings of Nigerian environmental activists. Shell’s expected response is that it should not be liable under the ATS because the U.S. is not its country of domicile. Portfolio 21 joins with other investors to demonstrate our support for international legal frameworks, such as ATS, as it is an important tool in encouraging standardized expectations for corporate behavior related to human rights.
Portfolio 21 joined with other industry leaders including business executives, elected officials, labor unions, and board members in a new initiative called the Thirty Percent Coalition. The coalition was founded to urge companies to increase the gender diversity of their boards of directors to 30% of board seats across public companies by the end of 2015. According to Catalyst’s 2011 census of Fortune 500 companies, women held just 16.1% of board seats in 2011 compared with 15.7% in 2010. Portfolio 21 believes that diversity will contribute to more positive public image and improved corporate reputation.
Siemens is reported to have sold internet and telephone surveillance technology to the Syrian government. Through this business activity, Portfolio 21 believes Siemens is supporting human rights violations perpetrated by the Syrian government. We have asked the company to confirm this report, and if so, if the company plans to discontinue the activity.
A recent Greenpeace report claims that clothing brands, including Nike and H&M, release a substantial amount of hazardous chemicals like nonylphenol ethoxylates (NPE) during washing, which ultimately end up in water systems. NPE has been identified as a toxic hormone-disrupter that can then build up in the food chain, in fish, and in other wildlife. Although the use of such chemicals in clothing manufacturing has been banned within the EU and restricted in the U.S. and Canada, Nike and H&M’s use of these chemicals continue to cause environmental harm, both in the country of manufacture and in the country of sale. Portfolio 21 wrote to the companies to gain additional understanding of the company’s commitments to limit the use of NPEs and to inquire if they would support legislation banning the use of NPEs during production.
Update, 4/17/12: H&M responded: Since 2009, H&M has required all its suppliers to suspend use of NPEs. The company says it audits all applicable suppliers’ chemical handling and requests all suppliers to hold certificates indicating their products are NPE-free. The company explains that the low quantities of NPE that are detected are a result of contaminations with other chemical products like dyes. In addition the company has partnered with others in its industry, including Nike, to launch the “Joint Roadmap” aimed at achieving zero discharge of hazardous chemicals by 2020.
Update, 4/18/12: Nike responded: The company has partnered with others in its industry, including H&M, to launch the “Joint Roadmap” aimed at achieving zero discharge of hazardous chemicals by 2020. In January 2011 the company wrote a letter to its suppliers informing them about the Roadmap and its specific attention to address the discharge of NPEs. While recognizing that the goal is complex, Nike provides a list of recommendations to achieve zero discharge of NPEs. In addition, due to the potential environmental impact of NPEs, Nike has placed these chemicals on its most recent update of the Nike Restricted Substances List and the Manufacturing Restricted Substances List.
In 2012, governments from around the world will distribute billions of dollars in government subsidies to the coal, gas, and oil industries. Portfolio 21 and other concerned citizens are encouraging the leaders at the Rio Earth Summit to end taxpayer subsidies of fossil fuels. In 2009, the Group of Twenty Finance Ministers and Central Bank Governors (G20) agreed to phase out fossil fuel subsidies in the “medium term.” Unfortunately, this proposal was not adopted at the Rio + 20.
In December 2011, Portfolio 21Investments wrote U.S. Senate Majority Leader Reid and Minority Leader McConnell to urge the support of the Clean Air Act. Since then, Senator James Inhofe (R-OK) introduced a resolution that would prevent the Environmental Protection Agency from implementing the Mercury and Air Toxics Standards (MATS) for power plants. According to the Economic Policy Institute, capital investments in order to comply with MATS are estimated to generate roughly 117,000 jobs by 2015. Furthermore, these investments will improve the air quality, which will prevent approximately 130,000 childhood asthma attacks, 5,700 hospital visits, and up to 11,000 premature deaths. To encourage the implementation of MATS, we joined with other concerned investors to send a letter to the Senate voicing our disapproval of this resolution.
In April, Portfolio 21 Investments applauded the Environmental Protection Agency for the issuance of its first-ever rules on carbon dioxide emissions from new power plants. In an effort to further our support for the proposed Carbon Pollution Standard for New Power Plants we have submitted comments to the EPA. We believe that the emissions from power plants should be regulated. Moreover, we feel that this new rule will reduce risks for investors and businesses by providing clarity and will also encourage smart investments in lower carbon energy solutions.
Clean Energy Victory Bonds (CEVB) would allow anyone with an investment of as little as $100 to help create energy efficiency and renewable energy projects around the country. CEVBs are not yet available in the United States, however, Portfolio 21 is supporting Green America’s campaign to encourage the White House and Congress to create CEVB legislation.
In conjunction with 20 other institutional investors, Portfolio 21 added its voice and urged Congress to extend the Production Tax Credit (PTC) for wind as part of the payroll tax holiday extension. We supported the extension of the PTC because we believe that it is critical to driving the cost of wind power towards parity with traditional energy generation. Unfortunately, the PTC was not extended.
Portfolio 21 wrote to Apple in response to an article in the New York Times titled “In China, Human Costs Built into an iPad.” As the article revealed, unethical practices have been discovered by Apple during audits yet suppliers are not always forced to make changes. While supply chains are complex, we expect Apple to ensure corrective actions when violations take place. Apple appears to prioritize profit over worker safety. As investors, Portfolio 21 finds this behavior reprehensible and it poses a long term reputational threat to the company’s image. We ask that Apple follow its Supplier Code of Conduct by strictly enforcing change when labor violations are known.
In conjunction with other concerned investors we addressed several oil companies regarding the financial risks associated with the flaring of natural gas that accompanies shale oil production in several states across the U.S. In addition to the negative environmental impacts we feel that the flaring of this valued natural resource is not financially prudent. We seek to gain additional information on how these companies plan to reduce flaring at current and future wells.
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