Joan passed away in November, 2008. She was an avid gardener and environmentalist, and employees wanted to acknowledge the anniversary of her passing by planting flowering bulbs. Each spring when new growth sprouts along the banks of the river between the Weeks Footbridge and the Weld Boathouse, we’ll be reminded of Joan’s spirit and passion for helping to create a better world.

Trillium worked in partnership with the Charles River Conservancy, a nonprofit citizens’ advocacy group founded in 2000 and dedicated to the renewal and stewardship of the Charles River Parklands from the Boston Harbor to the Watertown Dam. The Conservancy works to make these parklands more attractive, active and accessible to all.

Investors are beginning to sit up and take notice of smart grid technologies, especially since the Obama Administration’s stimulus plan directed over $4 billion to the young industry. There’s been much talk about how a smart grid can reshape the utility industry, but smart grid technology also will bring about changes for you and me. This spring Google offered a glimpse with the introduction of PowerMeter, a web-based widget that displays and tracks information on home electricity use in near real-time. Turn on your heater and watch your energy use spike. Put on a sweater instead, flip the heater off and feel gratified watching your energy bill fall. Similar technologies are being developed by large players such as Microsoft and start-ups such as Tendril. Some companies are focusing on bringing this technology to smart phones, such as Trilliant’s Energy Valet, being developed for the iPhone.

Accessible to about one percent of U.S. households, Google’s PowerMeter isn’t yet ready for primetime. Fortunately, there are other tools already available for the rest of us. In July Microsoft released  Hohm, an application that offers customized tips for saving energy. I tested Hohm with my mother and she was relatively pleased. After surviving a fairly tedious survey that takes an hour to fully complete, she was given a personal energy profile including a dozen energy saving tips prioritized by costs and savings. Some suggestions were too generic, but others were very helpful. She got detailed advice on a water heater upgrade she’d been thinking about, plus a few simple fixes that can save her hundreds of dollars a year and reduce her carbon footprint by thousands of pounds.

While Microsoft’s Hohm offers good suggestions for one-time home improvements, Black & Decker’s Power Monitor is better suited to change everyday habits like forgetting to turn off the lights. The Power Monitor is a handheld display that wirelessly connects to a sensor attached to a regular meter.  The portable Power Monitor then displays the cost (per hour or month) of current energy use. You can also isolate the cost of running individual appliances like a TV or toaster. The Power Monitor reminds me of the Toyota Prius and its dashboard display of its engine and fuel mileage. Just by monitoring this display, many Prius drivers learn to drive differently and conserve fuel. For some, it has become a game of sorts.

It’s nice to see tools like PowerMeter, Hohm, and Power Monitor making it easier than ever to conserve electricity at home. While the rocky economy has delayed many wind and solar projects the advantages of energy efficiency remain strikingly clear – using less is cheaper and cleaner than using more.

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There are many people who surely throwing up their hands, saying: “Enough already. Why do we have to put up with this endless recitation of atrocities?” The best answer is probably Evans’s remarks at the end of his new book:

Most of us who lived through the Third Reich and fought in its wars are no longer with us. Within a few decades there will be no one left who remembers it at first hand. And yet its legacy is still alive in myriad ways.…The Third Reich raises in the most acute form the possibilities and consequences of the human hatred and destructiveness that exist, even if only in a small way, within all of us. It demonstrates with terrible clarity the ultimate potential consequences of racism, militarism and authoritarianism. It shows what can happen if some people are treated as less human than others. It poses in the most extreme possible form the moral dilemmas we all face at one time or another in our lives, of conformity or resistance, action or inaction in the particular situations with which we are confronted.

Evans’s history begins, “On September 1, 1939 the first of a grand total of sixty divisions of German troops crossed the Third Reich’s border with Poland.” I was 12 years old on that day and I remember looking at the headlines and recognizing that this was not good news for Jews. My father, his brother and his sister had made their way out of Eastern Europe to the United States in 1920. The rest of the family remained in a village that was alternately Hungarian, Czechoslovakian, Soviet, and is now Ukrainian. Very few Jews live there anymore. I have photographs of my grandfather, grandmother, uncle, aunt and two cousins – people I have never met. I don’t know whether they were exterminated at Auschwitz or shot on the spot.

The point Evans makes about the moral dilemmas faced by people confronted with evil actions has direct relevance to social responsibility initiatives in the business world. How does a company respond to sweat shops in China, genocide in Darfur, sexual and racial discrimination in America? European companies that kowtowed to Hitler and were complicit in his demonic programs faced a backlash after the end of the war. Companies like Bayer and Daimler-Benz were asked to compensate their slave laborers. The giant insurance companies, Generali in Italy and Allianz in Germany, and the Swiss bankers were hit by a bevy of lawsuits over assets appropriated from Jewish clients. When families filed claims to get the proceeds from life insurance policies, companies demanded proof of death. Is it possible that executives of these companies didn’t know that death certificates were not issued at Auschwitz?

The Final Solution was so large and brutal that even when the slaughter was revealed, it was discounted as being “beyond belief.” And while Jews were the primary victims, others were also persecuted: gypsies, homosexuals, the mentally retarded, Poles, Russians, Italians. The Russians fared worst; 3.3 million Red Army POWs died in German captivity.

As the war wound down, the Germans accelerated their killing machine. Up to half of the 700,000 inmates of concentration camps at the start of 1945 were dead four months later. One was the young Dutch diarist Anne Frank, who died of typhus. Another was Lou Ernst, the first wife of the surrealist painter Max Ernst, who was shipped to Auschwitz on the next to last train. And perhaps my grandparents and their children were caught in those final days of the war since the Hungarian Jews were the last to be rounded up for extinction.

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Trillium has been a leader in pushing the SEC on this issue, and Senior Social Research Analyst Jonas Kron is mentioned in the article.  More on Trillium’s involvement can be found here: http://trilliuminvest.com/news-articles-category/big-victory-for-shareholder-rights/

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http://www.nationaljewelernetwork.com/njn/content_display/fashion/jewelry-fashion-reports/e3i0a82a4070f2192ecae9600cdd36fd349

National Jeweler, October 29, 2009

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Trillium Asset Management Corporation (“Trillium”) has been a leader in pushing the SEC on this issue. In September, Jonas Kron, Esq. of Trillium spoke directly with the SEC about this issue in his capacity as a member of Social Investment Forum’s Advocacy & Public Policy Working Group. Trillium welcomes the expanded opportunities provided by this policy reversal to advocate for greater corporate transparency and responsible corporate behavior. We commend the SEC for continuing to empower shareholders and see this as an important step in its efforts to strengthen the proxy process. Trillium looks forward working with the SEC on further improvements to the process.

For further information, contact Jonas Kron at 503-592-0864.

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Shelley sits on the center’s board.

October 21, 2009

Boston, MA – The Board of Directors of Trillium Asset Management Corporation (“Trillium”) is pleased to announce that Matthew Patsky, CFA has joined the firm as its new Chief Executive Officer. Mr. Patsky has been actively involved in socially responsible investing (SRI) for his entire 25-year investment management career, and is a highly respected portfolio manager and business leader within the field.

His selection is the culmination of a comprehensive executive search, to help Trillium carry forward the vision and legacy established by Joan Bavaria, Trillium’s founder and an SRI pioneer, who passed away in 2008.

“One of the first people I met during my early exploration of SRI in the 1980s was Joan Bavaria,” commented Mr. Patsky.  “I am honored and humbled by the opportunity to lead such an important organization in the SRI industry as Trillium into the future.

“Trillium is Joan Bavaria’s legacy and I intend to build upon the foundation she created. Trillium has an excellent investment performance record, an incredibly influential role as a shareholder advocacy organization, and as I am rapidly learning, a truly outstanding team of professionals. I look forward to working with my new team to accomplish great things.”

Mr. Patsky has over 25 years of experience in investment research and investment management. He began his career at Lehman Brothers in 1984 as a technology analyst. In 1989, while covering emerging growth companies for Lehman, Mr. Patsky began to incorporate environmental, social and governance factors into his research, becoming the first sell side analyst in the United States to publish on the topic of socially responsible investing in 1994.

Mr. Patsky is widely considered as an expert in socially and environmentally responsible investing. As Director of Equity Research for Adams, Harkness & Hill, he built that firm’s powerful research capabilities in socially and environmentally responsible areas such as renewable energy, resource optimization, and organic and natural products. Mr. Patsky was most recently at Winslow Management Company in Boston, where he served as director of research, chairman of the investment committee and portfolio manager for the Green Solutions Strategy and the Winslow Green Solutions Fund. He has appeared on “Wall Street Week”, CNBC, ABC Evening News and Fox News, and been featured in Barron’s, the New York Times, the Wall Street Journal, the Associated Press, and other major media.

Mr. Patsky will be joining Trillium October 26th. He serves on the Board of Root Capital, which provides financing to sustainable businesses in the developing world, and is a member of the Social Venture Network (SVN). “I’ve admired Matt’s work for many years. His expertise in green investing is outstanding, and we look forward to having him lead our team,” said Stephanie Leighton, CFA,
Trillium’s Chief Investment Officer.

Trillium Asset Management Corporation, a pioneer and innovator in responsible and sustainable investing since 1982, manages approximately $900 million in assets for institutional and individual clients.

For more information contact Lisa MacKinnon, 617-423-6655

Matt joined Trillium in October, 2009, and is the CEO and a senior portfolio manager. He has over 25 years of experience in investment research and investment management.

Matt began his career at Lehman Brothers in 1984 as a technology analyst. In 1989, while covering emerging growth companies for Lehman, he began to incorporate environmental, social and governance factors into his research, becoming the first sell side analyst in the United States to publish on the topic of socially responsible investing in 1994.

Matt is widely considered as an expert in socially and environmentally responsible investing. As Director of Equity Research for Adams, Harkness & Hill, he built that firm’s powerful research capabilities in socially and environmentally responsible areas such as renewable energy, resource optimization, and organic and natural products. Matt was most recently at Winslow Management Company in Boston, where he served as director of research, chairman of the investment committee and portfolio manager for the Green Solutions Strategy and the Winslow Green Solutions Fund. He has appeared on “Wall Street Week”, CNBC, ABC Evening News and Fox News, and been featured in Barron’s, the New York Times, the Wall Street Journal, the Associated Press, and other major media.

Matt serves on the Board of Root Capital, which provides financing to sustainable businesses in the developing world, and is a member of the Social Venture Network (SVN). Matt is a Chartered Financial Analyst charterholder and a member of the CFA Institute. He holds a Bachelor of Science in Economics from Rensselaer Polytechnic Institute.

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Mackey, the founder of Whole Foods, has been a controversial leader. His pseudonymous internet postings denigrating the Wild Oats grocery chain, later acquired by Whole Foods, led the Federal Trade Commission to sue to block the acquisition of Wild Oats in 2007, and triggered an investigation by the Securities and Exchange Commission. He has antagonized many customers and shareholders with his outspoken anti-union views, and his August 2009 op-ed piece in the Wall Street Journal that attacked large-scale healthcare reform provoked a boycott of the chain. The resolution states that having the positions of CEO and Board Chair held by the same person “may not serve the best long-term interests of shareholders,” noting that one of the Board’s duties is to evaluate CEO performance.

The resolution also points out “an urgent need for objective and independent Board evaluation of our Company’s strategic plan, as Whole Foods trailed the S&P 500 and Dow Jones Food Retailers & Wholesalers Index for the three-, four- and five-year periods ending September 21, 2009,” and notes the critical role that Chair plays in shaping the Board’s work.

The entire resolution can be viewed here.

Tags: Corporate Governance, independent chair, John Mackey, Whole Foods

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That pursuant to Section 2.23 of the Texas Business Corporation Act and Article IX of the Amended and Restated Bylaws of Whole Foods Market, Inc., the stockholders of Whole Foods Market, Inc. hereby amend those Bylaws as follows:

• Article III, entitled “Directors”, is amended by adding the following section 13:

“Independent Chairman. The Chairman of the Board shall be a director who is independent from the Corporation. For purposes of this requirement, “independent” has the meaning set forth in New York Stock Exchange (“NYSE”) listing standards, unless the Corporation’s common stock ceases to be listed on the NYSE and is listed on another exchange, in which case such exchange’s definition of independence shall apply. If the Board determines that a Chairman who was independent when time he or she was selected is no longer independent, the Board shall select a new Chairman who satisfies this independence requirement within 60 days of such determination. Compliance with this independence requirement shall be excused if no director who qualifies as independent is elected by the stockholders or if no director who is independent is willing to serve as Chairman. This independence requirement shall apply prospectively so as not to violate any contractual obligation of the Corporation that may be in effect when this requirement was adopted. This section shall not be amended or repealed by the Board of Directors.”; and

• Article V, entitled “Officers”, is amended by deleting from section 2 thereof, entitled “Election”, the sentence “No officer need be a member of the Board of Directors except the Chairman of the Board, if one be elected.” and substituting therefor: “No officer need be a member of the Board of Directors.”

Supporting Statement

The Board of Directors is responsible for protecting shareholders’ interests through independent oversight of management, including the Chief Executive Officer’s (CEO) performance. Currently Mr. John Mackey is both Board Chairman and CEO. We believe that combining the two positions may not serve the best long-term interests of shareholders.

We see an urgent need for objective and independent Board evaluation of our Company’s strategic plan, as Whole Foods trailed the S&P 500 and Dow Jones Food Retailers & Wholesalers Index for the three-, four- and five-year periods ending September 21, 2009. By setting the agenda for, and leading discussions of, strategic issues at the Board level, the Chairman is critical in shaping the Board’s work.

We believe an independent Chairman will enhance Board leadership and protect shareholders from potentially harmful management decisions. Corporate governance experts agree. In a 2009 report the Milstein Center at Yale School of Management recommended splitting the two positions as the default provision for U.S. companies. In 2008 and 2009, proxy advisor RiskMetrics/ISS recommended voting FOR a shareholder proposal urging separation of the roles at our Company.

Given our Company’s performance in recent years, the uncertain competitive landscape, and the importance of independent scrutiny of management, we urge a vote FOR this resolution.

That shareholders urge the Board of Directors of Plum Creek (the “Company”) to adopt a policy allowing shareholders to vote on an advisory resolution at each annual shareholders meeting, proposed by Company’s management, to ratify the compensation of the named executive officers (“NEOs”) included in the proxy’s Summary Compensation Table and accompanying narrative disclosure of material factors. The proposal should make clear that the vote is non-binding and would not affect any compensation paid or awarded to any NEO.

 SUPPORTING STATEMENT

As long-term shareholders in Plum Creek, we feel that senior executive compensation at the Company has not always been structured in ways that best serve shareholders.

As the nation’s largest landowner in many communities, we have a particular interest in protecting and promoting our brand name and image. A reputation as anything less than a good neighbor or trustworthy partner can create unnecessary obstacles to success in community after community – risking long-term shareholder value.

Earlier, our Company was branded “the Darth Vader of the State of Washington” by Republican Congressman Rod Chandler (Wall Street Journal, June 1990). Substantial Company resources and executive focus were spent overcoming that reputational damage.

A July 5th 2008 front-page article in the Washington Post, headlined: “Closed-Door Deal Could Open Land In Montana.” The article focused squarely on our Company, stating: “The deal was struck behind closed doors between Mark E. Rey, the former timber lobbyist who oversees the U.S. Department of Agriculture’s Forest Service and Natural Resources Conservation Service, and Plum Creek Timber Co., a former logging company turned real estate investment trust … local [Montana] officials were stunned and outraged at the deal.”

There is concern that the Washington Post story describes a short-term strategy that may harm long-term prospects for our Company’s shareowners.

We believe existing U.S. corporate governance arrangements, including SEC rules and stock exchange listing standards, do not allow adequate shareholder input on senior executive compensation. In contrast to U.S. practices, shareholders of U.K. public companies cast advisory votes on the “directors’ remuneration report.” While not binding, the vote gives shareholders a clear advisory voice on senior executive compensation.

Current U.S. listing standards require shareholder approval of equity-based compensation plans. However, those plans only set general parameters and accord compensation committees substantial discretion in making awards and establishing performance thresholds year-by-year. Shareholders do not have any mechanism for providing feedback on how these apply to individual pay packages. (Bebchuk & Fried, Pay Without Performance, 2004.)

Similarly, performance criteria submitted for shareholder approval to allow a company to deduct compensation in excess of $1 million are broad and do not constrain compensation committees in dealing with particular senior executives. Withholding votes from compensation committee members who stand for re-election is insufficient for registering dissatisfaction with the way committees has administered prior-year compensation plans and policies.

Therefore, we urge the Board to allow shareholders a voice on senior executive compensation by establishing an annual referendum process. Such a referendum would provide important information about whether shareholders view senior executive compensation practices, year-by-year, to be in shareholders’ best interests.

Sigma Designs, Inc. (NASDAQ-SIGM) is a fabless provider of integrated system-on-chip solutions used to “power the digital media generation.” The stock is a play on the shift toward higher quality, consumer-centric, digital video technology. Several trends favors Sigma’s products including the shift from analog to digital TV, increasing demand for HDTV and Internet enabled television content, video conferencing, and centralized home energy management systems.

Sigma is a first mover and market share leader in the IPTV (Internet Protocol TV) market with 75 percent share. Telephone carriers such as Verizon and AT&T are adopting IPTV to compete with cable companies who have infringed on their fixed line phone business. IPTV delivers high quality video to customers’ homes via telephone lines or the Internet and is popular in European and Asian countries with low levels of cable TV. IPTV revenues are projected to scale from $780 million in 2006 to $26 billion in 2011, as it displaces cable and satellite TV. IPTV contributes 67 percent of Sigma’s revenue, while 26 percent is derived from sales of chips for Blu-ray DVD players, the market winner after the HD format war. Given the growth profiles of Sigma’s target markets, earnings are projected to increase 15 percent over the next three to five years.

Sigma’s recent acquisition of Zensys Holding Corp. gives the company access to the emerging smart device and energy management markets. Its Z-Wave product creates a wireless network of electronic devices in the home, allowing for Internet based access. These digital systems are used to monitor, control, and manage electricity use and are an important progression toward user-controlled energy efficiency. Sigma’s video conferencing chips also have an environmental benefit. Sigma sells chips to companies such as Cisco, who is revolutionizing the way corporations work through videoconferencing technologies that greatly reduce the need for travel.

Highlights of the 2009 Proxy Season

• Strong votes on nearly all Trillium Asset Management Corporation (”Trillium”) resolutions that went to a vote
• The greenhouse gas (GHG) reduction target resolution at Idacorp became the first proposal addressing climate change to receive a majority vote
• Dominion Resources agrees to a yearlong structured dialogue with Trillium on the feasibility of setting a GHG reduction target
• Discussions with Analog Devices led the company to join the Electronics Industry Code of Conduct, which addresses environmental and social performance
• Assurances received from Kellogg, PepsiCo and General Mills that they are not currently using nanomaterials
• Participated in diverse investor coalition to address use of labor in the cotton supply chain
• Successful engagement with Baxter Corporation led the company to agree to provide greater transparency around political contributions

Efficient power transmission is essential as we move toward a more sustainable energy economy. ABB Ltd (NYSE-ABB) is the global leader in electricity transmission, focused on greener, smarter, more cost-efficient power infrastructure. The potential for efficiency gains between power production and consumption is believed to be 80 percent, and ABB invests heavily in R&D to create next generation energy technologies. Innovative products and strong project execution position the company to benefit from several long term trends: renewable energy transmission, an aging infrastructure replacement cycle, and international growth. Revenues are expected to increase 10 to 12.5 percent annually over the next 5 years.

Large-scale renewable energy transmission is constrained by geographic and technological barriers. In the U.S., our most abundant renewable power resources are located in the center of the country and require a highly efficient transmission infrastructure to direct energy to population centers on the coasts. ABB will be a critical player in meeting this challenge, while also acting as the largest supplier of products and services to wind turbine manufacturers. Currently, ABB is linking an offshore wind farm to the German power grid using high-voltage direct current transmission technology.

Infrastructure stimulus spending and a much needed replacement cycle will benefit ABB in the short term. Seventy-five percent of transmission lines in the U.S. are 25 years old or older, and the National Electric Reliability Council and new energy efficiency requirements from the Department of Energy are driving systems replacement. In addition, China is planning heavy infrastructure spending to shore up its own economy. Infrastructure buildout in emerging markets accounts for over half of ABB’s revenues.

ABB’s growth will also be bolstered by its financial flexibility. The company has the strongest balance sheet in the industry due to a successful organic growth strategy focused on improving operational efficiency, disposing of non-core assets, paying off debt, and avoiding large mergers and acquisitions. With $4.6 billion in net cash and very low debt, the company is poised to benefit from low acquisition target valuations and industry consolidation.

Since 1995, Calvert Foundation has provided social investors with the Community Investment Notes, which help to lift people out of poverty while providing a modest financial return back to the investor.

Calvert Foundation works to maximize the flow of capital through more than 250 community development organizations globally, to benefit underserved communities and individuals, and to achieve a more equitable and sustainable society. Through Calvert Foundation’s different programs, individuals and institutions place capital to finance affordable homes, fund small and micro-businesses, and make available essential community services.

Program

Community Investment Notes offer individuals and institutions the chance to invest in dozens of microlending, low-income housing, and community development loan funds. The Notes offer flexible terms and target geographic and social interest. Targeted sectors include:

Full Portfolio: Place your investment where funds are needed most in Calvert Foundation’s portfolio, helping to create jobs, homes and hope for communities in the U.S. and abroad.
United States: Select from eight domestic regions to direct your investment geographically.
International/Microcredit: Support microfinance projects and other international efforts to help end poverty in more than 100 countries around the world.
Gulf Coast Recovery: Channel funds toward rebuilding efforts in the Gulf Coast and other regions devastated by hurricanes.
Social Enterprise: Finance business ventures that produce tangible social or environmental benefits for local economies and communities.
Independent Media: Invest directly in public radio stations to promote independent, plural and local public media ownership.

Impact/Client Population

Calvert Community Investments have put capital more than 250 community development organizations. Investments have been made into community development financial institutions, social enterprises, microfinance institutions, community development banks and credit unions serving lower income communities.

Investing in Community Investment Notes

On behalf of our clients, Trillium Asset Management Corporation will purchase Calvert Community Investment Notes of at least $5,000. Term and rate of return will vary. Notes can be bought electronically in some brokerage accounts in a manner similar to buying conventional investment products.

Upon purchasing a Community Investment Note, the full value of your principal is lent out to help underserved communities. As loans are repaid, the capital is lent out again, multiplying the social impact that your investment has created. At maturity, your capital is returned to you with interest.

Calvert Community Investments is administered by the Calvert Social Investment Foundation, a 501(c)(3) non-profit organization. Calvert Community Investments should not be confused with any Calvert Group sponsored investment product, is not a mutual fund, nor is it FDIC insured.

Visit www.calvertfoundation.org for more information.

Last September, as housing prices fell and the value of billions of dollars of mortgage-related securities plummeted, the U.S. was at the brink of worldwide financial disaster. This is not hyperbole. Consumers, manufacturers, company executives, bankers, stock traders, bond traders and pension funds were all paralyzed. Our financial system, previously bloated on an excess of credit, suddenly teetered on the precipice of no credit. The purpose of the financial rescues and bailouts was to prevent the implosion of the worldwide economic system, as an increasing number of small defaults on mortgages led to escalating losses on all types of bonds, stocks and financial instruments.

Much of the excessive expansion in mortgage credit happened in the “shadow” or unregulated banking system of mortgage brokers, but we have no doubt that many, if not most, of the major banks also contributed to the immoderate expansion of credit. After watching highly leveraged hedge funds reap outsize returns and fat fees, the major banks and investment banks greatly expanded their leverage, without considering the potential for systemic risk. Banks encouraged their employees and traders to take on additional risk with pay incentives that heavily rewarded successful bets and only lightly penalized unsuccessful ones. We agree that there is more than sufficient blame to go around. We don’t like having had to use public resources to save private companies in order to ward off worldwide financial collapse.

In an advanced financial economy, both big and small banks serve essential functions. When all is functioning well, banks gather smaller sums of money as deposits and use them to fund loans critical for business expansion and growth. Without loans and without credit, economic growth is severely constrained. We actively invest in small community development financial institutions (CDFIs) that direct credit to the most underserved communities, helping to build small businesses and neighborhoods. These small CDFIs cannot put together the scale of loans and credit necessary for bigger borrowers in the way that big banks can do.

We now see an amazing opportunity for advocacy. In the past, opportunities to influence public policy were limited, and we focused on advocacy at the company level. Over the years, shareholder advocacy helped pave the way for the Equator Principles, a set of voluntary standards adopted by major banks to ensure that environmental reviews precede the financing of large infrastructure projects. We’ve filed “say on pay” resolutions at major banks. At this point, Congress and the Obama Administration are drafting the regulations and creating the governing bodies to strengthen the oversight applied to the banking sector and to other financial institutions. As a start, the Troubled Asset Relief Program contained a restriction on executive pay, limiting it to $500,000 as long as a bank still has those funds outstanding. We have joined with the Social Investment Forum on a range of policy initiatives in financial regulation. Our goals are to increase transparency, safeguard the financial system, strengthen say on pay initiatives on executive compensation, mandate corporate disclosure on environmental, social and governance issues, and to reduce conflicts of interest. Now is the time and the opportunity to change the system; we choose to do it as involved and active investors.

Without a doubt, BPA is attracting a great deal of attention these days. What is bisphenol A (pronounced “BIS-fe-noll A”)? BPA is a chemical used in a wide variety of very common products including CDs, DVDs, electrical and electronic equipment, automobiles, sports safety equipment, reusable food and drink containers, and dental sealants. It is also used as a protective liner in metal cans to maintain the quality of canned foods and beverages.

However, the chemical mimics estrogen in the body and studies have found links between BPA and a wide variety of health impacts such as developmental toxicity in children, cancer, infertility, neurotoxicity, obesity, heart disease and diabetes. Some researchers have found a relationship with behavioral disorders including hyperactivity, aggressiveness and impaired learning. As an editorial in the Journal of the American Medical Association summarized in January, BPA is linked to “some of the most significant and economically burdensome human diseases.”

This is particularly disturbing when you also consider that approximately 90 percent of Americans have at least some measurable level of BPA in their bodies. In May, researchers from the Harvard School of Public Health found study subjects who drank for a week from hard clear plastic water bottles increased the BPA concentration in their urine by 69 percent. Add to these facts the 100 experiments demonstrating that BPA causes permanent harm to lab animals even at the low exposure levels currently found in humans, and the concerns grow even larger.

Cause for Investor Concern

Fortunately, there are alternatives for plastic products and in some cases, for can linings. However, a recent report by As You Sow and Green Century Capital Management, Seeking Safer Packaging: Ranking Packaged Food Companies, found that companies are taking insufficient steps to move toward alternatives. Companies surveyed in the report included Hain Celestial, Heinz, Nestlé, Kellogg, ConAgra, General Mills, PepsiCo, Campbell Soup Company, Coca-Cola, McCormick & Company, Kraft, Hershey, J. M. Smucker, Del Monte, Chiquita, Dean Foods, Hormel, Sara Lee, SYSCO, and Unilever. As investors who incorporate environmental and social issues into our investment and management decisions, we question what this means for our portfolios and what it says about the practices of some of the companies we invest in. Are the companies that produce and use BPA acting in an ethical manner or in a sustainable fashion? In the United States only five companies produce BPA – Bayer, Dow, Hexion Specialty Chemicals, SABIC Innovative Plastics (formerly GE Plastics), and Sunoco. But beyond the producers of BPA, we also need to look at the companies using BPA in their own products. These include, to varying degrees, the companies in the Green Century report, but also companies like Kroger, Del Monte, Alcoa Inc., and Crown Holdings Inc. For that reason we seek to assess the risks that BPA presents to these companies.

One of the biggest concerns is the specter of regulation. In March, Representative Edward Markey (D-MA), Senator Dianne Feinstein (D-CA), and Senator Chuck Schumer (D-NY) announced they would introduce companion legislation to establish a federal ban on BPA in all food and beverage containers. Senator Schumer explained, “There have been enough warning signs about the dangers of BPA that we cannot wait to act. It’s better to be safe than sorry. Many manufacturers and retailers have already recognized the danger and have taken steps to get kids’ products containing BPA off store shelves.” Clearly, the companies are on notice that Congress is very interested in this issue.

Interest is not limited to Congress. Most recently, the Wall Street Journal reported that Food and Drug Administration (FDA) Commissioner Margaret Hamburg agreed to reconsider a decision that BPA was safe at levels currently found in products such as baby bottles. Specifically, the FDA has assigned the agency’s acting chief scientist to be in charge of the review and expects the review to be complete by the end of the summer or early fall.

BPA presents a litigation risk to companies as consumers of products like baby bottles and water bottles become the first plaintiffs to go to court. During the spring of 2008, at least six separate class action lawsuits were filed against manufacturers and distributors of plastic products containing BPA. As more is discovered about the health impacts of BPA in other products, additional lawsuits are considered likely. Possible defendants include companies that produce, use or sell BPA-containing products that come into contact with food or beverages.

Another concern, particularly for companies with valuable name brands that depend on the trust and goodwill of consumers, is rising public awareness of this issue. On the positive side, a recent report by the Investor Environmental Health Network noted, “Companies with the savvy to take advantage of this rise in awareness about bisphenol A in products are making BPA-free products that are flying off the shelves.”* Likewise, a failure to confront the challenges presented by public awareness of BPA has potential consequences for the bottom line.

Signs of Progress

Nalgene, the hard plastic water bottle maker, took a proactive approach and announced in 2008 that it was going to phase out its use of BPA. A spokesman for Nalgene explained, “Because we listened to our customers and were able to rapidly respond to these concerns, the market recognized that we were ahead of the curve on this issue and we were able to maintain our industry leading position.”

Sunoco will no longer sell the chemical to companies for use in food and water containers designed for children under three. By requiring its customers to guarantee that BPA will not be used in children’s food products, Sunoco has indicated it cannot be certain of the compound’s safety.

Shareholder Activism on BPA

In light of these growing risks, Trillium Asset Management Corporation (”Trillium”) is taking a number of actions. As an active member of the Investor Environmental Health Network, we joined in coordinated efforts to bring BPA concerns to a number of companies such as Kroger and Whole Foods Market. This year we co-filed a shareholder proposal at Macy’s that asked the company to address concerns related to a number of toxic chemicals present in consumer products including BPA. We also co-signed a letter of inquiry that was sent to Sara Lee seeking greater disclosure on BPA. Most recently, we joined Green Century Capital Management and shareholders representing approximately $26 billion in assets in writing to the Food and Drug Administration to support for its decision to reconsider its previous assessment of the safety of BPA. Our letter discusses how “the FDA’s current assessment that BPA is safe is the fact most often cited by companies as the reason for the lack of market movement towards substitute materials.” We point out that “Some of us have heard from companies that they would prefer to move towards BPA alternatives, but they state that the lack of regulation by the federal government creates disincentives for companies to invest in the research, development and deployment of alternatives.”

One area that has not received much attention from the SRI community is the use of BPA in dental products. It is unclear how many dental products use BPA or its derivatives. To help plug that gap, we have written to Dentsply, the dental products company, inquiring about its past and present use of BPA. We also asked about its plans for potential future use of BPA, where they get information about BPA, and if they are directly or indirectly dedicating resources toward lobbying on the issue.

On this last point, there is a particularly interesting story. In late May, an article in the Milwaukee Journal Sentinel described a meeting of food packaging executives and chemical makers lobbyists in which they discussed a strategy to “protect industries that use BPA [and] prolong the life of BPA.” A memo of the meeting obtained by the paper included discussions about the use of fear tactics and a so-called “holy grail” spokesperson – a pregnant woman. According to the article, companies and organizations attending the meeting included the Coca Cola, Alcoa, Crown Holdings, the North American Metal Packaging Alliance, the Grocery Manufacturers Association, Del Monte and the American Chemistry Council.

Socially concerned investors provide an important voice in this public debate that helps to focus policy makers and companies to solve this problem. If companies act, they can help to eliminate a threat to public health and better position themselves for long term value creation, not only for shareholders, but for our entire economy.

* Public Awareness Drives Market for Safer Alternatives: Bisphenol A Market Analysis Report, September 2008.

Mossville was once rich in biodiversity and natural resources. The country town was thriving when Jim Moss, a former slave, arrived in the 1790s and opened a post office. Settlers fished the swamps, raised livestock and raised families free from racial hostility.

In the 1920s and 1930s, oil and chemical companies were lured south by cheap labor and tax exemptions that endured for decades. By the 1970s, Mossville was home to the largest concentration of polyvinyl chloride (PVC) facilities anywhere in the U.S. In all, 14 industrial facilities won permits to operate in and around Mossville.

The community’s health declined as it was gradually poisoned by industrial flares, groundwater contamination, PVC emissions and other potent chemical hazards. ConocoPhillips, PPG Industries and Georgia Gulf are among the companies responsible for the most toxic and flammable substances processed and stored in Mossville.*

By 1998, Mossville residents began exhibiting recurring illnesses – cancers, rashes, and chronic respiratory and reproductive diseases — compelling the federal Agency for Toxic Substance and Disease Registry (ATSDR) to test residents’ blood.  Blood levels of dioxin were an alarming three times higher than the general population. The Environmental Protection Agency (EPA) recorded vinyl chloride emissions at 120 times greater than the ambient air standard. University of Texas researchers found that 91 percent of the residents suffered from at least one disease related to toxic chemical exposure. Despite these findings, government agencies failed to respond to the community’s need for medical services, relocation assistance, and pollution reduction.

Faced with a dying community, residents mobilized to create Mossville Environmental Action Now (M.E.A.N.), and collaborate with AEHR and Wilma Subra, a chemist who received a MacArthur “genius” grant for her environmental health advocacy. Their analysis of government data found clear matches between the specific dioxins and dioxin compounds in emissions and waste transfers, and those found in residents’ blood, attic dust, yard soil and vegetables. A comparison of EPA and ATSDR data found an astounding 77 percent of the dioxin compounds emitted by one Georgia Gulf facility, for example, matching 77 percent of the dioxins detected in blood samples in 2001.*

In 2008, Mossville residents brought their story to ConocoPhillips’ (ticker symbol: COP) annual meeting. ConocoPhillips’ Lake Charles refinery sits on the edge of Mossville and has a history of ignoring community concerns. At the meeting, CEO Jim Mulva promised them a thorough and careful investigation of their concerns. A year passed. Residents returned to the 2009 annual meeting, and again heard promises – this time Mulva’s personal assurance he’d travel to Mossville within sixty days.

In support of the community, members of the ICCR (including Trillium Asset Management Corporation) wrote to Mulva, urging him to keep his promise.

Mulva agreed to meet in Mossville in July, stipulating that only three residents could attend. The community agreed to this unreasonable condition hoping that a first meeting could plant the seeds for future dialogues. One day before the scheduled meeting, local plant manager Willie Tempton emailed M.E.A.N. saying Mulva would not attend because “significant changes in the external environment” would make it difficult if not impossible to meet the objectives of the meeting. Tempton attributed Mulva’s no-show on outside interference “from the media and the investors”.

A respectful letter from investors and vague indications of media interest either frightened off the chief executive of one of the nation’s largest companies or merely brought to the surface the arrogance that allowed it to pollute Mossville. If ConocoPhillips intends to proceed from a place of respect and integrity, Jim Mulva should have nothing to fear from media interest or concerned shareholders. The invitation is still open to visit Mossville. It would be a wiser move to accept it than to underestimate the persistence and determination of Mossville residents and their allies.

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