Si2 published for its clients a mid-year report on the record-breaking results from the spring corporate annual meeting season in mid-August, with a detailed analysis of the social and environmental proposals filed during proxy season. An excerpt from this report that includes information on trends over the last five years and a complete description of all the corporate political activity proposals is now available for download:
Archive for the ‘Uncategorized’ Category
Si2 has compiled a report summarizing the number of shareholder proposals filed in the five-year period 2010-14, and how investors voted on them. The report covers all proposals on corporate political activity, including direct and indirect lobbying and electoral spending and related issues, at all U.S. companies.
The report may be of interest to those debating the petition before the SEC that requests a rulemaking on mandatory corporate political spending disclosure in securities filings by U.S. companies.
View the report here:
In September, The Government Accountability Office issued a report requested by the U.S. Congress about hydraulic fracturing, Oil and Gas: Information on Shale Resources, Development, and Environmental and Public Health Risks. The report cites Si2’s report on the subject several times as it takes a look at the size of U.S. shale gas resources and the range of environmental and public health risks associated with their development.
Report Points to Uncertain and Significant Liabilities for Companies and Shareholders Related to Oil Spills in the Niger Delta; Liabilities Could Exceed $50 Billion; Shell and other Operators at RiskJuly 24, 2012
Oil and gas operators in the Niger Delta and their shareholders have significant liabilities that due to poor disclosure and inadequate regulatory oversight to date have gone underreported finds a new report released today by the Sustainable Investments Institute (Si2), an independent, impartial proxy and sustainability risk research provider to investors. The special report, Investor Risks Looming in the Niger Delta, says that Shell, the largest multinational oil and gas operator in the region, and other significant players, including ExxonMobil, Total, Chevron and Eni, are exposed to unclear and substantial costs related to ongoing cleanup and remediation activities, as well as compensation and legal expenses connected to a legacy of spills spanning 50 years.
“A confluence of events has occurred over the past year to make it an especially prudent time for investors to review these risks,” says Peter DeSimone, cofounder of Si2 and author of the report. “One is the release of a much anticipated study from the United Nations Environment Program (UNEP) on Ogoniland, which recommended the creation of an initial $1 billion clean-up reserve to be funded by the government and oil operators to cover the first five years of what UNEP projects will be a 25- to 30-year effort. The other is a lawsuit filed in London by approximately 11,000 villagers from the Bodo community in the Niger Delta against Royal Dutch Shell, alleging that oil spills in the region devastated local fisheries and livelihoods of community members.” DeSimone adds, “At the same time, the catastrophic BP Deepwater Horizon spill in the U.S. Gulf of Mexico has helped to highlight companies’ spill responses in other cases and shed light on long years of neglect in the Niger Delta.”
Spotty reporting, continued violence and the long-term legacy of the spills in the Niger Delta, with some ignored or inadequately remediated for more than 40 years, pose major challenges to conducting assessments, but existing reporting from companies, government agencies, multilateral institutions and civil society organizations have helped confirm several realities and needs going forward. These major findings, further developed in the report, include:
– Companies should determine the need for cleanup, remediation, compensation and related costs for outstanding spill damage attributable to their operations.
-Total liabilities are unknown but all indicators point to significant costs for the companies and their shareholders in the range of anywhere from $16 to more than $50 billion.
-Companies are using short-term strategies that are creating much larger long-term liabilities for their financial statements and shareholders.
-Communities are becoming more empowered to act not only in the arenas of public protest but also, and perhaps more importantly, in the courts.
-The BP spill has drawn attention to the consequences of spill damage elsewhere in the world including the Niger Delta.
-Poverty and inequality are underlying issues fueling the cycles of violence, sabotage and theft.
-Investors should take action to protect their long-term interests, while also helping to promote more sustainable and responsible practices going forward.
The report reviews options for investors as they attempt to grapple with assessing these risks, including:
-Demanding good governance of these issues, including robust board and senior management oversight.
-Calling for appropriate policies that are properly implemented, both requiring and empowering operations staff to devise solutions for clean-up and remediation efforts, and to guide ongoing responses to spills.
-Requesting better reporting of spill cases found, clean-up and remediation efforts and potential liabilities arising.
-Seeking improved metrics for ongoing reporting and measurement of resulting practices, with third party validation.
-Encouraging cooperation with the Nigerian government, local authorities and affected communities. This includes cooperating with UNEP and other multilateral institutions in following recommendations for redressing oil pollution problems.
-Urging greater efforts to promote constructive corporate social investment in affected communities to minimize incentives for violence and theft through the promotion of economic development and job creation.
The full report is available for download here. Contact Peter DeSimone at firstname.lastname@example.org for more information.
Si2 has just published for its members a report on the pending shareholder resolution that will be considered by investors at The Gap at the company’s annual meeting on May 15th. The proponent asks the company to leave Sri Lanka because of the government’s human rights violations, but Gap says it is carefully monitoring its presence in the country and believes it is helping to rebuild the war-torn country, where a 30-year civil war ended in 2009. Si2’s Action Report on the proposal is available here: 2012 SI2 Action Report – Gap – Social (Human Rights).
In collaboration with the IRRC Institute, Si2 submitted a statement for the record to the U.S. Senate Committee on Rules and Administration, regarding the committee’s consideration of the DISCLOSE Act of 2012. The statement begins:
In the wake of the landmark Citizens United Supreme Court decision, numerous organizations are providing input on the highly contentious policy debate regarding the disclosure of political expenditures. As the Committee examines each side of the debate and potential legislation, we believe an important element of the decision making process is a careful examination of neutral, nonpartisan data on what companies actually are doing with regard to disclosure of political expenditures. The full statement is attached here: FINAL Statement to S Rules March 2012
Attached to the statement is the November 2011 Si2/IRRC study, Corporate Governance of Political Expenditures – 2011 Benchmark for SP500.
In a new post on the Harvard Law School Forum on Corporate Governance and Financial Reform , Si2’s board chair, Julie Gorte of Pax World Funds, and Si2 executive director Heidi Welsh explain what’s behind the rash of lobbying shareholder proposals that investors will consider this spring at corporate annual meetings. The post notes that companies usually don’t discuss lobbying when they talk about “political spending,” although the reach of corporate influence in government is precisely what prompted the Occupy movement and underlies this year’s big new crop of political spending shareholder resolutions. Investor proponents want disclosure of all kinds of spending, and they are particularly interested in spending through intermediaries such as trade associations and “social welfare” organizations that currently need not make public who gives them money.
MARCH 8, 2012: Si2 and the IRRC Institute today released “Discovering Shale Gas: An Investor Guide to Hydraulic Fracturing.” The report provides an in-depth look at the environmental and social impacts of shale gas development, identifies key questions for investors and includes 10 company profiles. An expert panel representing industry, environmental groups and investor activists provided input to the report.
An audio copy of the webinar, featuring report author Susan Williams, IRRCI executive director Jon Lukomnik and Si2 executive director Heidi Welsh, will be available soon.
A copy of the report is available here: Discovering Shale Gas – An Investor Guide to Hydraulic Fracturing
A press release about the report is available here: Hydraulic Fracturing Press Release, March 8, 2012
Slides from the webinar are available here: Discovering Shale Gas – Webinar Slides, 3-8-12
NEW CORPORATE POLITICAL SPENDING REPORT RELEASED: On November 10, Si2 and the IRRC Institute released ”Corporate Governance of Political Expenditures: 2011 Benchmark Report on S&P 500 Companies.” The report finds that corporate accountability and disclosure of political expenditures is on the upswing, with the boards of 31 percent of S&P 500 companies now explicitly overseeing such spending, compared to 23 percent in 2010. However, this increased oversight and transparency does not necessarily translate into less spending, as companies with board oversight of political expenditures spent about 30 percent more in 2010 than those without such explicit policies.
The full report is available here:
In collaboration with Tim Smith of Walden Asset Management, the Harvard Law School Forum on Corporate Governance and Financial Regulation recently published Si2’s analysis of the 2011 proxy season. The article was adapted from the executive summary of our in-depth Mid-Year Report on the results of proxy season, published in August for our members.