New Report on Hydraulic Fracturing

March 8, 2012

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


Proxy Preview 2012: Energy and Politics

February 28, 2012

FEB. 28, 2012: Si2 released today Proxy Preview 2012, a comprehensive look at all the shareholder resolutions filed for the spring corporate annual meeting season, in collaboration with As You Sow and Proxy Impact. The report includes a collection of viewpoints from investor proponents of the resolutions and profiles of key players. It finds that political spending proposals now account for one-third of all social and environmental filings, about even with environmental and sustainability proposals. Key environmental issues raised include coal risks and the community impacts of hydraulic fracturing.

The full report is available for free download on the As You Sow website.

Executive Director Heidi Welsh was interviewed by NPR’s political money reporter, Peter Overby, on Morning Edition, in a story that also featured SEC Commissioner Luis Aguilar, Allen Dickerson of the Center for Competitive Politics, New York State Comptroller Thomas DiNapoli and Bruce Freed of the Center for Political Accountability. Listen to the story here.

New Corporate Political Spending Governance Benchmarking Report

November 10, 2011

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:

Corporate Governance and Politics – Policy and Spending in the SP500

Si2 Proxy Season Analysis 2011 on Harvard Governance Blog

October 14, 2011

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.

Update on P&G and political spending policy

October 7, 2011

On Oct. 6, 2011 Procter & Gamble filed an amendment to its 2011 proxy statement . According to the update, Proctor & Gamble reiterates its stance that the company “has not used, and has no plans to use, corporate funds to support direct political expenditures to influence federal elections for office, nor to make contributions to trade association or other groups for that purpose.” Procter & Gamble goes on to state that “While this is our general policy even at the state or local level, we have occasionally permitted, based on exceptions approved by our Public Policy Team, contributions to groups that may use the funds to influence state or local elections for office.” In that vein, the company’s Public Policy Team approved a $40,000 contribution to Partnership for Ohio’s Future – a group that “provided educational materials regarding Ohio’s judicial elections and expressed support for two judicial contests.”

According to documents filed with the Ohio Secretary of State, the group spent $1.57 million on independent expenditures for two candidates on the ballot for the Ohio Supreme Court. Under Ohio law, the Partnership for Ohio’s Future was not required to disclose the contributions, but did so voluntarily. In addition, the group is not required to disclose its donors, since independent expenditures are exempted from the donor reporting requirements to which most electioneering communications are subject.

Procter & Gamble discloses the contribution in its 2010 Corporate Contributions to Ballot Initiative or Issue Advocacy. However, in the disclosures, the Partnership for Ohio’s Future is described as a 501(c)(4) group that was formed by the Ohio Chamber of Commerce whose purpose is “to push for public policies that lead to greater opportunities and a higher quality of life for Ohio citizens. The Partnership encourages the public to learn about the issues and elections that impact Ohio’s economy.” No mention is made by Procter & Gamble of any candidate support or candidate advocacy provided by the group.

Since the Partnership for Ohio’s Future is a 501(c)(4) group, the contribution is technically not in conflict with stated company policy to “not use corporate funds to support 527 organizations or candidates in states where it is legally permissible to do so.” However, shareholders will need to decide if contributions to 501(c)(4) groups like the Partnership of Ohio’s Future are violating the spirit, if not the letter, of company policy since the money donated to certain groups is being used to support candidates at the state and local level while the company’s public policy position generally forbids any such involvement.

May 25 is ExxonMobil and Chevron’s meeting day

May 20, 2011

Investors at ExxonMobil and Chevron will consider the usual broad range of shareholder proposals on social and environmental issues, voting on seven resolutions at each company. Si2 has prepared reports on all the proposals, available here:


2011 Si2 Special Report – Chevron – Sustainability

  • Proposal 5 – 2011 SI2 Action Report – Chevron – Environment (Board Oversight)
  • Proposal 6 – 2011 SI2 Action Report – Chevron – Human Rights (Board Oversight)
  • Proposal 7 – 2011 SI2 Action Report – Chevron – Sustainability (Pay Links)
  • Proposal 8 – 2011 SI2 Action Report – Chevron – Human Rights (Country Selection)
  • Proposal 9 – 2011 SI2 Action Report – Chevron – Environment – Climate Change
  • Proposal 10 – 2011 SI2 Action Report – Chevron – Environment (Hydraulic Fracturing)


    2011 Si2 Special Report – ExxonMobil Environmental Policies

  • Proposal 6 – 2011 SI2 Action Report – ExxonMobil – Corporate Political Activity
  • Proposal 7 – 2011 SI2 Action Report – ExxonMobil – Diversity (LGBT Rights)
  • Proposal 8 – 2011 SI2 Action Report – ExxonMobil – Human Rights (Water)
  • Proposal 9 – 2011 SI2 Action Report – ExxonMobil – Natural Resource Mgt (Oil Sands)
  • Proposal 10 – 2011 SI2 Action Report – ExxonMobil – Natural Resources Mgt (Hydraulic Fracturing)
  • Proposals 11 & 12 – 2011 Si2 Action Report – ExxonMobil – Climate Change

  • Majority Vote at Ameren

    April 28, 2011

    The first majority vote of the season is in. Investors at Ameren cast 52.7 percent of their shares in support of a resolution that asked the company to report, “above and beyond current compliance, to identify and reduce environmental and health hazards associated with past and present handling of coal combustion waste, and how those efforts may reduce legal, reputational and other risks to the company’s finances and operations.” The company reported the resolution did not pass, since it counted abstentions in its voting calculation (figured that way, it was 46 percent). However it’s figured, it is clear that investors want the company to tell them more about how it plans to cope with regulations that are putting increasing restrictions on coal-burning–a major source of U.S. greenhouse gas emissions. Preliminary results from Energen, which received a proposal asking for a report on hydraulic fracturing, show that about half of the investors there also are not sanguine about fracking’s risks and want more information, as well.

    Here’s Si2’s Action Report on Ameren for more on the company and its exposure to coal risks:2011 Si2 Action Report – Ameren – Natural Resource Management (Coal)

    Proxy Preview Webinar

    February 17, 2011

    PROXY SEASON FORECAST: Si2’s comprehensive 2011 Proxy Season Forecast became available to members on February 15, with information on all the new issues, SEC developments, and predictions for this spring. In a new collaboration this year, a version of the impartial Si2 Forecast will be included in Proxy Preview 2011, published by the As You Sow Foundation, alongside a collection of 14 advocacy group viewpoints. The report will be launched with a free webinar on February 23.

    See more information and sign up for the webinar at

    New Action Report on Microsoft

    October 29, 2010

    We recently published an Action Report on the pending shareholder resolution about sustainability at Microsoft, which investors will vote on at the company’s annual meeting on November 16. The report is one of the last to be issued for the 2010 proxy season year. Here’s the report: 2010 Si2 Action Report – Microsoft – Sustainability

    Corporate Political Spending Governance Study Release Today

    October 14, 2010


    First Comprehensive Political Spending Governance Analysis Finds Few Boards Engaged in Oversight Despite Potential Corporate Risks

    NEW YORK, NY, October 14, 2010 – A new study finds that while nearly 80 percent of S&P 500 companies have disclosed direct political campaign spending policies, 86 percent have no disclosed policies regarding indirect political expenditures. Additionally, only 20 percent of corporations disclose to investors how much is actually spent and which organizations or causes receive the funds.

    These findings are contained in a report issued today by the Investor Responsibility Research Center (IRRC) Institute and the Sustainable Investments Institute (Si2) entitled, “How Companies Influence Elections: Political Campaign Spending Patterns and Oversight at America’s Largest Companies.” It is the first comprehensive report to benchmark the governance of corporate political spending, which has proven contentious for companies as varied as News Corp. and Target Corp. The study comes against the backdrop of the landmark Citizens United vs. the Federal Election Supreme Court decision that lifted key restrictions on corporate political spending and opened up an unprecedented flow of millions of dollars – increasingly from indirect spending – into elections.

    “Shareholders are demanding increased political spending disclosure to inject greater oversight, accountability and transparency into campaign spending to protect their investments,” said Heidi Welsh, report co-author and executive director of Si2. “The recent controversy and boycotts surrounding Target’s indirect political expenditures are a vivid illustration of the serious reputational and financial risks companies and investors can face when there is not rigorous oversight and disclosure of contributions. A company that doesn’t pay attention can find itself supporting groups or paying trade associations that work against its stated public policy positions, raising many questions for shareholders and the public. In the wake of the Supreme Court ruling, companies have even more latitude and fewer restrictions, which should be a wake up call to investors,” Welsh stated.

    “The findings indicate that corporations are falling short on political expenditure governance,” said Jon Lukomnik, IRRC Institute program director. “It’s encouraging that 80 percent of the S&P 500 have disclosed political campaign policies. But that’s where the good news stops. Political expenditures of corporate assets typically lack board oversight, and lack transparency with regard to the expenditure processes and gatekeepers to that corporate money. More importantly, few companies typically have policies disclosing the amounts and recipients of indirect expenditures — such as to trade groups and other organizations — which have become increasingly controversial. In practice, the existing disclosures may be of less use than they would appear because investors cannot determine how much of their money is actually being spent, or where it is going,” Lukomnik said.

    The IRRC Institute commissioned this study to take a comprehensive look at the governance of political spending. It was conducted as a non-partisan and non-advocacy manner, favoring no political party and with no position as to the legitimacy of corporate political spending. Rather, the study is intended to provide investors, policy makers, corporate decision makers, and thought leaders with baseline data on corporate political expenditure governance.

    The key research findings include:

    • Nearly 80 percent of the S&P 500 companies have disclosed political campaign spending policies. However, only a distinct minority has stand-alone policies that are easily accessible and with clear descriptions of spending decision making and oversight. The publicly available language that companies use to describe their political spending is usually not precise, and rarely includes all types of political spending.

    • 86 percent of the S&P 500 does not have stated policies on indirect political spending via contributions to trade associations and non-profit interest groups that have become a key area of concern. Financials firms are notably less likely than other sectors to have any policies on indirect spending.

    • Less than one-quarter of S&P 500 companies require their boards to oversee political spending. Nearly all of those are the largest companies in America. Least likely to have oversight are smaller companies and companies in the Consumer Discretionary sector. Board oversight is more prevalent in the Health Care sector, which has been in the spotlight in recent elections and the subject of sweeping and controversial reform enacted in March 2010.

    • More than 80 percent of the S&P 500 companies do not provide information on actual contributions, as opposed to the policies that ostensibly control that spending. Almost all companies that do report are at the top end of the revenue scale. One-third of Health Care companies disclose spending but only about 10 percent do in three other sectors—Financials, Telecoms and Consumer Discretionary.

    • Only 52 companies indicated they do not use “independent expenditures” to advocate for or against the election of candidates.

    • About half of all S&P 500 companies provide some information on which company officers make spending decisions. This management transparency is most common among Consumer Staples companies. In contrast, Financials companies provide the least amount of information, even though Congress enacted significant and contentious reforms for the industry in July 2010.

    • Nearly 60 percent of S&P 500 companies spend shareholder money from the corporate treasury on political campaigns, while two-thirds have political action committees that spend money contributed by corporate executives. Utilities – amongst the most highly regulated industries – are more likely than any other sector to support candidates, parties and interest groups’ political committees, while Information Technology companies are the least likely to spend in these categories.

    • Board oversight encourages disclosure of what companies do spend, but there is no evidence that such oversight affects spending.

    This study was conducted through an examination of S&P 500 companies’ federal and state campaign contribution data and other publicly available information, combined with the results of a Si2 survey sent to each company. The report also includes two case studies and a short primer on the various types of political spending. The full study is available at and and is included in the IRRC sponsored Social Science Research Network Corporate Governance Network at

    About IRRC Institute
    The IRRC Institute is a not-for-profit organization headquartered in New York, N.Y. Its mission is to provide thought leadership at the intersection of corporate responsibility and the informational needs of investors. More information is available at

    About Sustainable Investments Institute
    The Sustainable Investments Institute provides online tools and in-depth reports that enable investors to make informed, independent decisions on social and environmental shareholder proposals. More information is available at

    Download the report here:
    How Companies Influence Elections – Campaign Spending Patterns and Oversight at the S&P 500