Divested Companies
Following are companies that have been removed from Portfolio 21 because they no longer meet our investment criteria.
Securities mentioned are not recommendations to buy or sell any security.
| DIVESTED COMPANIES | ||
|---|---|---|
| Date | Company | Comments |
| 3/08 | Energy Conversion Devices | Energy Conversion Devices was previously removed from the fund for corporate governance reasons in September 2003; however, due to internal restructuring Energy Conversion Devices was repurchased in August 2005. The company's primary commercial products are its proprietary thin-film solar modules, used for converting sunlight into electricity. Although Portfolio 21 supports this technology, we have sold our shares in Energy Conversion Devices based on our strong positions in SunPower, Suntech Power, and Sharp. |
| 3/08 | AMD | In June 2003, Portfolio 21 bought shares of AMD. AMD is a provider of processing solutions in the computing, graphics, and consumer electronics markets. Moreover, the company is a leader in energy-efficient processing. AMD is committed to reducing its carbon footprint and is among several Portfolio 21 companies lobbying for legislation that promotes energy-efficient servers. AMD has not been removed from the fund for sustainability reasons; rather Portfolio 21 has decided to participate in the microprocessor market through our holdings in Intel. |
| 3/08 | Verigy | In October 2006, Portfolio 21 acquired a position in U.S.-based Verigy, when Agilent Technologies spun it off. Verigy designs, develops, and manufactures test systems and solutions for the semiconductor industry. When we acquired Verigy shares, Portfolio 21 noted that the challenge for Verigy would be to establish its own culture and organizational priorities, and we hoped that the company would capture Agilent's sustainability legacy. To date, Verigy has shown little progress in its environmental leadership and initiatives. Portfolio 21 has sold shares of Verigy in favor of exposure to the semiconductor equipment industry through our holdings in Applied Materials. |
| 3/08 | Plug Power | Headquartered in the United States, Plug Power was added to the fund in 2001. The company designs and develops fuel cells for residential and small business. Fuel cells emit no particulates, negligible levels of nitrogen oxides (NOx) and sulfur oxides (SOx), and less than half the carbon dioxide generated by coal or oil fired plants on a per kilowatt-hour basis. Unfortunately, large scale commercialization of Plug Power's fuel cells is not on the horizon and therefore Portfolio 21 is not confident in the long-term prospects for the company. |
| 3/08 | Ballard Power Systems | Portfolio 21 acquired Ballard Power Systems in 1999. The company, headquartered in Canada, designs, develops, and manufactures hydrogen fuel cells. Hydrogen fuel cells work through an electrochemical reaction, which results in a no-noise, no-particulate-emission power source. Whether hydrogen fuel cells are truly pollution free is dependent on the source of hydrogen. Portfolio 21 expects that small-scale development will continue in the near future; however, we do not foresee Ballard's fuel cells becoming commercially viable. For this reason, Portfolio 21 has removed Ballard Power Systems from the fund. |
| 3/08 | Biffa | In 2006, Portfolio 21 acquired its position in Biffa, an integrated waste management company based in the UK, when the company was spun off from Severn Trent. Biffa recognizes the significance of the greenhouse gas emissions that result from landfill decomposition and promotes sustainable waste management practices by reducing waste and increasing recycling, composting, and reuse. Biffa has also been recognized for its efforts to capture methane gas emissions, which are then utilized as a source of electricity. Portfolio 21 sold its shares of Biffa as the company agreed to be sold to Montagu Private Equity for £1.2 billion, which equates to 350 pence per share. The stock climbed to 370 pence on speculation of a bidding war. We chose to sell our shares at a premium to the original offer, as we believe a higher bid may not transpire. |
| 3/08 | Fuel Systems Solutions | Portfolio 21 purchased shares of Fuel Systems Solutions in 2000. Headquartered in the United States, Fuel Systems Solutions designs, manufacturers, and supplies fuel storage, fuel delivery, and electronic control systems for automobile engines that are compatible with alternative fuels. Despite the clear environmental benefits of the company's products, Fuel System Solutions has not met our expectations for improving business fundamentals. |
| 2/08 | Ricoh | In June 2005, Ricoh, a Japanese manufacturer of office and electronic automation devices, was added to Portfolio 21. Ricoh understands the environmental impacts of its products during their entire lifecycle. Strengths include the company's efforts to source plant-based raw materials for its digital multifunctional copiers, progress toward eliminating PVC and lead, increased use of reusable parts and recycled plastics, and new eco-packaging options. While Ricoh demonstrates environmental leadership in its product design and manufacturing operations, Portfolio 21 has become less optimistic about its competitive positions in light of a slowing global economy and a stronger yen. |
| 2/08 | NEC | NEC, a Japanese manufacturer of electronic devices, semiconductors, and software, was added to Portfolio 21 in the first quarter of 2005. NEC communicates its concern for the environment, and the potential uses of its information technology products to reduce travel and associated greenhouse gas emissions. Despite the company's highly transparent reporting about its direct and indirect environmental impacts, due to a lagging global economy and a stronger yen, Portfolio 21 removed NEC from the fund. |
| 12/07 | Nortel Networks | Nortel Networks, a telecommunications company, was added to Portfolio 21 in 2001 due to its products' and services' potential to decrease travel and subsequently reduce greenhouse gas emissions. In recent years, Nortel's commitment to transparent environmental reporting about its products and manufacturing processes has diminished, and we believe the company has lost its way in terms of innovation, profitability and environmental strategies. |
| 8/07 | Quantum | Quantum was added to Portfolio 21 in 2002 when it was spun off from IMPCO Technologies, now Fuel System Solutions, which remains a Portfolio 21 holding. Quantum is an automotive supplier of advanced propulsion systems, alternative fuel systems, powertrain engineering and system integration, and specialty vehicle design. The company's two main product divisions are represented by Quantum Fuel Systems and Tecstar Automotive Group (formerly known as Starcraft, which was acquired by Quantum in 2005). Quantum Fuel Systems' core fuel and drive systems include the categories of: Fuel Storage Products, Fuel Delivery Products, Electronic Vehicle Control Systems and Software, and Lithium Ion and Advanced Battery Control Systems; products all related to alternative fuel vehicles. However, Tecstar Automotive Group's products have no link to alternative fuels or environmental benefits; they consist primarily of specialty and performance equipment for pick-up trucks and sport utility vehicles (SUVs), engineering and design capabilities for concept vehicles, and distribution of automotive accessories. While Portfolio 21's original interest was in Quantum's alternative fuel systems (specifically for fuel cells), with the acquisition of the much larger Starcraft Corporation (now Tecstar Automotive Group) the sales and contract revenues for the Quantum Fuel Systems portion of the business accounted for only 10.3% of revenues in 2006. Additionally, Quantum/Tecstar has shown no indication that environmental constraints are shaping any part of Tecstar's business strategy or product design. As a result, Quantum no longer meets Portfolio 21's sustainability criteria and was removed from the fund during the third quarter of 2007. |
| 4/06 | Toshiba | Toshiba was added to Portfolio 21 in 2003 as a result of the company's recognition of its responsibility on issues such as global climate change and end-of-life product management and its work to minimize the life cycle impacts of its products. As a very large and diversified company, Toshiba has products with environmental considerations in many areas, including refrigerators, TVs, vacuums and air conditioning units, among many others. However, the company also has a power systems unit, which provides products and services for the nuclear power industry. While the company's revenues in this area have not exceeded our low threshold, the acquisition of Westinghouse in early 2006 indicated the company is devoting significant resources to expanding nuclear power-related revenues. As Portfolio 21 has a clear anti-nuclear power position and our revenue threshold will be crossed as a result of this acquisition, we have removed Toshiba from Portfolio 21 and have sent a letter to Toshiba explaining our approach and reasoning. |
| 2/06 | O2 | In February 2006, O2, a Portfolio 21 holding, was acquired by Telefonica. This acquisition resulted in Portfolio 21 divesting of O2 because Telefonica does not yet meet Portfolio 21's rigorous screening criteria. Telefonica does not demonstrate a true understanding of sustainability issues, does not have a significant mobile phone take-back program (mobile phones account for a significant proportion of revenues), and lacks quality environmental reporting. Telefonica is beginning to study its group-wide environmental impacts, and this process will perhaps be benefited by the integration of O2. We will review Telefonica for improvement in the future. |
| 10/04 | Wainwright Bank | Wainwright Bank has been in Portfolio 21 since 1999 and is a clear leader in socially responsible banking. As a signatory to CERES and a developer of green banking products, the company was a good Portfolio 21 candidate. Over the years, while Wainwright has maintained its leadership position on social issues, the company has not maintained a focus on environmental sustainability. For example, although Wainwright offers several financial products that seek to enhance the environment, these represent a very small amount of the company's business. Additionally, despite Wainwright's commitment to the CERES principles, which require an annual environmental report, Wainwright has not published an environmental report since 1999 and has had limited internal initiatives to reduce the company's direct environmental impact. As a result, we removed the company from the fund in July 2004. |
| 8/04 | Axfood | Hemkop, a Swedish food retailer with an environmental focus, was an original holding in Portfolio 21 when the fund was launched in 1999. Over the years Hemkop merged with other companies and became Axfood. We had high hopes for this new company but unfortunately, after a face to face meeting in Stockholm this past June, we determined that the company no longer meets Portfolio 21's strict screening criteria. Specifically we found that while the company has a non-GMO policy for its own brand products, Axfood does not have a clear anti-GMO position and looks at GMO food safety issues from a consumer reluctance standpoint, but doesn't put much weight on the greater environmental risks and implications. As a result, Axfood does not pass our non-GMO criteria. Additionally, Axfood's business has shifted to have a greater emphasis on discount food retailers, and the environmental focus previously demonstrated by Hempkop has faded. The proportion of Axfood's group revenues that are represented by certified organic or environmentally preferable products is less than 5%. As a result Axfood does not fit our model of a food retailer positioned for a sustainable future and was removed from the fund in July 2004. |
| 12/03 | Energy Conversion Devices | Due to concerns about the company's ability to operate as a going concern and disappointment with the firm's degree of corporate governance relating to accounting methods, we sold our stake in Energy Conversion Devices in September 2003. The company delayed reporting yearly results, is reviewing its accounting, and is said to be in discussions to raise cash. |
| 7/03 | Horizon Organic | Due to Horizon Organic's agreement to merge with Dean Foods Portfolio 21 divested of HCOW in July of 2003. Essentially, while Dean Foods is committed to HCOW's mission and commitment to organic, this mission does not permeate all of Dean's operations and the portion of Dean's revenues from organic products is insignificant. Due to these two points, Dean Foods is not a candidate for Portfolio 21. |
| 7/03 | Zimmer Holdings | Zimmer Holdings was originally added to Portfolio 21 as it was spun off from Bristol Myers Squibb, a Portfolio 21 company, in August of 2001. Since that time we have been monitoring Zimmer to see if the company would carry on with Bristol 's well established environmental programs and commitment in this area. Unfortunately, Zimmer has not devoted significant resources toward developing its own environmental programs and does not exhibit a commitment to environmental sustainability. As a result, we removed the company from the fund. |
| 4/03 | AstroPower | In April 2003 AstroPower failed to meet its filing deadline with the SEC for its 10K report. The company stated that it needed to account for some government contracts. It is likely the company will have to restate earnings. Portfolio 21 decided to remove AstroPower from the fund due to the company's misleading actions and lack of transparency. We feel that AstroPower has acted dishonestly and breached the public's trust and thus have removed the company from the fund based on social and corporate governance concerns. |
| 11/02 | AT&T | AT&T was originally included in Portfolio 21 in February 2000. At that time we felt that the company demonstrated leadership on environmental sustainability issues and was a financially attractive investment. Since that time the company has changed structure significantly through acquisitions, mergers and spinoffs. Additionally, the company's reporting of and attention to environmental and sustainability issues are considerably less than they were at the time the company was originally accepted. As AT&T no longer meets our portfolio criteria, we removed the company from the fund in November 2002. |
| 8/01 | Scandic Hotels | When Scandic Hotels was acquired by Hilton Group PLC, Portfolio 21 removed the company from the fund. The Hilton Group does not meet our sustainability criteria, and, while the company publicly announced the continuation of Scandic's commitment to environmental sustainability (within Scandic branded hotels), the proportion of hotel rooms and revenues generated by Scandic is not significant enough to mitigate the lack of focus in the remainder of the Group's operations. |
| 5/01 | Church & Dwight | Church & Dwight was initially included in Portfolio 21 based primarily on the environmental benefits of the company's products and the company's early recognition of environmental priorities. However, over time the company's commitment to environmental issues has faded. In recent years Church & Dwight has exhibited no leadership in promoting the environmental benefits associated with its products. Additionally, the company has made a number of investments in products and brands that do not provide environmental advantages. |