On December 12, 2013, Reuters published a story about the response from Verizon Communications Inc. (NYSE: VZ) to a shareholder proposal that Trillium recently filed which asks the company to publish a semi-annual report detailing how often they have shared information with U.S. or foreign governments and what type of customer information has been shared.

Ross Kerber writes:

“Verizon Communications Inc told activist investors on Wednesday that it might skip a vote on a shareholder proposal that seeks details on the company’s cooperation with government surveillance efforts.

Verizon’s law firm Jones Day said in a Nov. 25 letter that the company would exclude the measure from its 2014 proxy statement unless the activists did more to verify their eligibility to file the proposal.

The company’s response appears to be more aggressive than the stance AT&T Inc took against a similar proposal, said Jonas Kron, senior vice president for Trillium Asset Management, a co-filer of the measures at both telecommunications companies.”

You can read the entire article here.

December 9, 2013: Trillium Asset Management is pleased to announce that it has withdrawn a shareholder proposal at Amgen, Inc. (NASDAQ:AMGN) following commitments from the company that will lead to greater transparency in their reporting of lobbying spending.

Trillium filed the resolution on behalf of our clients, including Social Justice Fund Northwest.

Beginning in 2014, Amgen will annually disclose its membership in trade associations along with the amounts the trade associations spend from its fees for non-deductible lobbying activities.

In addition, Amgen has committed to publish an annual list of all states where it files lobbying reports and provide links to the reports or state websites where the information can be found.

These significant and meaningful steps by Amgen are sound risk management and we commend the company for taking a leadership position in the pharmaceutical industry — and in corporate America more generally.

DECEMBER 5, 2013: New York State Comptroller Thomas P. DiNapoli announced today that the $160.7 billion New York State Common Retirement Fund, leading a coalition of investors with $327 billion of assets under management, has sent letters to ten major corporate sponsors of the upcoming Winter Olympic Games in Sochi, Russia urging the sponsors to use their influence to ensure the human rights of Russian citizens, as well as athletes and visitors to the Olympics.

The investors, including New York City Comptroller John C. Liu and a coalition of 19 investment firms, acted in response to Russia’s recently enacted laws restricting the rights of its lesbian, gay, bisexual and transgender (LGBT) citizens to free speech and freedom to assemble.

“The Russian government’s discriminatory laws have cast a shadow over the Olympics,” DiNapoli said. “We call upon these corporate sponsors to stand up for the respect and equality enshrined in the Olympic movement, advocate for human rights and confront abuses. Taking a stand against these prejudicial laws and policies is not just the right thing to do, it protects shareholder interests and corporate reputations.”

The letters, sent this week to AtoS, Coca-Cola, Dow Chemical, General Electric, Omega (Swatch), McDonalds, Panasonic, Proctor & Gamble, Samsung and Visa, cite the reputational risk to the Olympic sponsors if they fail to send a strong message that recently enacted laws that target LGBT people are not acceptable. The obligation for these companies to strive toward responsible and sustainable social policies and practices to protect shareholder value is at the heart of the recently promulgated United Nations Guiding Principles on Business and Human Rights.

The U.N. principles state that companies have an obligation to respect human rights and remedy abuses where they affect their business operations. The investors note that if these companies fail to speak out against these restrictive and intolerant laws, they threaten not only the return on their Olympic sponsorship dollars but also the value associated with the companies’ brands and reputations.

“Corporate sponsors of the Sochi Olympics have an opportunity to build their brands and their value, but they also have a responsibility to uphold the Olympics’ inclusive spirit,” said New York City Comptroller John C. Liu. “The onus is on these global corporations to use their influence, while the whole world is watching, to confront Russia’s hateful laws that target the LGBT community. If they fail to step up and speak out in support of equal rights for all, they risk damaging their reputations and their value to investors.”

“As sponsorship and broadcast revenues finance 92 percent of the costs of the Olympic games, there can be little doubt that corporate sponsors have influence over the International Olympic Committee and host countries. There is simply no justification for silence and inaction,” said Shelley Alpern, director of Social Research and Shareholder Advocacy at Clean Yield Management.

The investors urged the Olympic corporate sponsors to:

· Ensure their nondiscrimination policies are strong, inclusive and enforced globally, especially in regard to employees stationed or on location in Russia;

· Call on the leaders of the Russian Federation to rescind the laws that deprive members of Russia’s LGBT community of freedom of speech and freedom of assembly, and declare their commitment to equality irrespective of sexual orientation or gender identity; and

· Call on the International Olympic Committee to obtain firm and express commitments from the Russian government that ensure the safety and human rights of all athletes and attendees of the Winter Games and visitors to the Games’ venues.

Signatories to the letter include Clean Yield Asset Management, Zevin Asset Management, Arjuna Capital, Harrington Investments, Oneida Tribe of Wisconsin, Christopher Reynolds Foundation, Newground Social Investment, Pax World, First Affirmative Financial Network, Sisters of St. Francis of Philadelphia, Unitarian Universalist Association, Domini Social Investments, Trillium Asset Management, As You Sow Foundation, The Tides Foundation, Nathan Cummings Foundation, The Sustainability Group at Loring, Wolcott & Coolidge, Northstar Asset Management and Calvert Group.

“Comptroller DiNapoli, Comptroller Liu and these institutional investors deserve praise for this strong action against hate and intolerance,” said Assembly Member Daniel O’Donnell (D, Manhattan). “The state pension fund is leading the way by using its investment clout to tell the corporate sponsors of the Olympics that their brands and reputations are on the line if they do not speak out against Russia’s anti-LGBT laws. We must continue to raise awareness of how these laws will continue to affect investors, LGBT residents of Russia and visitors and participants in the Sochi Olympic Winter Games.”

“I commend Comptroller DiNapoli for his leadership in this important effort to pressure the Russian Federation to repeal its intolerable and unjust anti-LGBT laws,” said State Senator Brad Hoylman (D, Manhattan). “Comptroller DiNapoli, Comptroller Liu and the nineteen institutional investors joining them, are sending a strong message to major Olympic sponsors that they must take action against Russia’s discriminatory laws targeting the LGBT community. Anything less would be an abdication of their corporate social responsibility and threatens to severely damage the Olympic sponsors’ standing among consumers and shareholders.”

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For more information, contact: Eric Sumberg, 212-681-4840, esumberg@osc.state.ny.us

This release was originally published by the Office of the New York State Comptroller which is solely responsible for its content.

Managing and reporting environmental, social and governance (ESG) business practices help companies compete in a business environment characterized by finite natural resources, changing legislation, and heightened public expectations. Transparent, substantive reporting allows companies to gain strategic value from existing sustainability efforts and identify emerging risks and opportunities. ESG issues can pose significant risks to business. Without proper disclosure stakeholders and analysts cannot ascertain whether the company is managing its ESG exposure.

The link between strong sustainability management and value creation is increasingly evident. A 2012 Deutsche Bank review of 100 academic studies, 56 research papers, two literature reviews, and four meta-studies on sustainable investing found 89% of the studies demonstrated that companies with high ESG ratings also showed market-based outperformance.

More than 1,200 institutional investors managing more than $33 trillion have joined The Principles for Responsible Investment and publicly commit to seek comprehensive corporate ESG disclosure and incorporate it into investment decisions.

The majority of large corporations also recognize the value of sustainability reporting. As of December 2012, 53% of the S&P 500 and 57% of the Fortune 500 published a corporate sustainability report; 63% of S&P 500 reporters utilized the Global Reporting Initiative (GRI) Guidelines. According to a 2011 KPMG report, 80% of Fortune Global 250 companies produce GRI-based sustainability reports.

Industry peers like Darden Restaurants, Dunkin Brands, and Starbucks have identified relevant ESG factors and address them through sustainability reports.

In contrast, Chipotle Mexican Grill which stated in 2010 that its “commitment to serving Food with Integrity will continue to have many beneficial impacts,” and “it is constantly working to get all of the ingredients it uses from sustainable sources”, has very limited information on its policies and progress toward achieving its objectives.

RESOLVED:

Shareholders request Chipotle issue an annual sustainability report describing the company’s short- and long-term responses to ESG-related issues. The report should include objective quantitative indicators and goals relating to each issue where feasible, be prepared at a reasonable cost, omit proprietary information, and be made available to shareholders by October 2014.

SUPPORTING STATEMENT:

The report should address relevant policies, practices, metrics and goals on topics such as: greenhouse gas emissions, pesticide use management, waste minimization, energy efficiency, labor standards and  practices, and other relevant environmental and social impacts.

We recommend Chipotle consider using the GRI Sustainability Reporting Guidelines to prepare the report. The GRI is an international organization developed with representatives from business, environmental, human rights and labor communities. The Guidelines cover environmental impacts, labor practices, human rights, product responsibility, and community impacts. The Guidelines provide a flexible reporting system which allows the omission of content irrelevant to company operations.

We also recommend Chipotle consider drawing on the expertise of the Equitable Food Initiative (EFI). The EFI is a collaborative effort of retailers, workers and growers focused on reducing risks in food supply chains.  Its standard was adapted to reduce duplication of other industry-leading certifications and has attracted Costco and Bon Appetit as project partners.

Public confidence in the environmental benefits of natural gas is threatened by evidence of high levels of methane leakage from the oil and gas industry in many regions. For example, a November 2013 study published in the Proceedings of the National Academy of Sciences shows the oil and gas sector in Oklahoma and Texas, where EOG has operations, may be emitting up to five times more methane than estimated. This study raises questions regarding the adequacy of current Environmental Protection Agency methods for measuring methane emissions.

The International Energy Agency’s (IEA) 2012 report “Golden Rules for a Golden Age of Gas” recommends producers undertake actions “necessary to realise the economic and energy security benefits while meeting public concerns”, such as eliminating venting. It also recommends producers “consider setting targets on emissions as part of their overall strategic policies to win public confidence.”

Methane is a potent greenhouse gas (GHG), with 86 times the climate impact of carbon dioxide over a 20-year period. Studies from Harvard, the University of Texas, Cornell, and the University of Colorado, among others, estimate highly varied methane leakage rates as a percentage of production, creating uncertainty and garnering media attention that EOG should do more to proactively address.

Reducing methane air emissions in upstream oil and gas production is one of four policies proposed by IEA that “could stop the growth in global energy-related emissions by the end of this decade at no net economic cost” and help keep the increase in global mean temperature below 2 degrees Celsius. All four policies “rely only on existing technologies”, “have already been adopted and proven in several countries,” and “would not harm economic growth in any country or region”.

The IEA also states “public authorities need to consider imposing restrictions on venting… .” This regulatory risk, including target setting, was seen, for example, when in November 2013, Colorado proposed new regulations, with industry support, focusing on methane air emissions and requiring companies capture 95 percent of their hydrocarbon emissions.

Proponents believe EOG’s social license to operate may be at risk. Implementing a comprehensive program of measurement, mitigation, disclosure, and target setting for actual, as opposed to estimated or calculated, methane air emissions can help address this risk. We also believe better management of leakage and venting represents economic opportunity for EOG by capturing valuable product that can be monetized. Additional benefits include worker safety improvements, maximizing available energy resources and protecting human health.

Unfortunately, EOG’s disclosures associated with leakage and venting are minimal.

Resolved: Shareholders request EOG publish a report that reviews its policies, actions, and plans on a play by play basis in order to enhance and further develop measurement, disclosure, mitigation, and reduction targets for methane emissions resulting from all operations under its financial or operational control. The report should consider steps beyond legal compliance and be prepared in light of studies on this issue, at reasonable cost, omit proprietary information, and be available by October 2014.

Supporting Statement

The economic, business, environmental and societal impacts of climate change are important to investors.

According to the National Oceanic and Atmospheric Administration, 2012 marked the 36^th consecutive year that global temperature was above average. Climate scientists have long predicted that rising levels of CO₂ in the atmosphere will cause an increase in extreme weather events, rising sea levels, and changes in agricultural production. In 2012, the U.S. experienced 11 extreme weather events resulting in an estimated $110 billion in total damages and 377 fatalities. Superstorm Sandy incurred losses projected at more than $65 billion. The 2012 Midwest drought affected 80 percent of agricultural land, costing approximately $30 billion.

In order to mitigate the worst impacts of climate change, the Intergovernmental Panel on Climate Change (IPCC) estimates that a 50 percent reduction in greenhouse gas (GHG) emissions globally is needed by 2050 (relative to 1990 levels) to stabilize global temperatures, entailing a U.S. target reduction of 80 percent.

The costs of failing to address climate are significant and according to the Stern Review, could lead to a 5% loss of global GDP. Climate change could substantially impact a company’s business operations, revenue, or expenditure. Failure to address these risks and opportunities could have lasting negative impacts for investors and other stakeholders. According to the World Wildlife Fund, 79% of US companies in the S&P 500 that report to the Carbon Disclosure Project earn a higher return on their carbon reduction investments than on their overall corporate capital investments.

Major investors are seeking evidence that companies are managing climate risk. Investors with $87 trillion in assets have supported a request to 5,000 companies for disclosure of carbon emissions, reduction goals, and climate change strategies. Over 500 businesses, including General Motors, Microsoft, and Nike signed the Climate Declaration that states, “Tackling climate change is one of America’s greatest economic opportunities of the 21^st century.”

Presently, a majority of the Fortune 100 and two-thirds of the Global 100 have GHG emissions reduction commitments, renewable energy commitments, or both. These goals enable companies to reduce costs, build resilient supply chains, manage operational and reputational risk, and create new products and services.

Currently, Lowe’s does not publicly set targets for carbon emissions reductions and we believe it should do so in light of IPCC guidance. In contrast, its peer, Home Depot sets intensity and absolute emissions reductions targets. Home Depot asserts that it, “believes changes in average temperature, particularly increases in temperature, may lead to increased operational costs for our company.” Home Depot utilizes a sustainability risk mitigation strategy and sustainability integration system to manage risks within the business strategy.

Supporting Statement:

According to the National Oceanic and Atmospheric Administration, 2012 marked the 36^th consecutive year that global temperature was above average. Climate scientists have long predicted that rising levels of CO₂ in the atmosphere will cause an increase in extreme weather events, rising sea levels, and changes in agricultural production. In 2012, the U.S. experienced 11 extreme weather events resulting in an estimated $110 billion in total damages and 377 fatalities. Superstorm Sandy incurred losses projected at more than $65 billion. The 2012 Midwest drought affected 80 percent of agricultural land, costing approximately $30 billion.

In order to mitigate the worst impacts of climate change, the Intergovernmental Panel on Climate Change (IPCC) estimates that a 50 percent reduction in greenhouse gas (GHG) emissions globally is needed by 2050 (relative to 1990 levels) to stabilize global temperatures, entailing a U.S. target reduction of 80 percent.

The costs of failing to address climate are significant and according to the Stern Review, could lead to a 5% loss of global GDP. Climate change could substantially impact a company’s business operations, revenue, or expenditure. Failure to address these risks and opportunities could have lasting negative impacts for investors and other stakeholders. According to the World Wildlife Fund, 79% of US companies in the S&P 500 that report to the Carbon Disclosure Project earn a higher return on their carbon reduction investments than on their overall corporate capital investments.

Major investors are seeking evidence that companies are managing climate risk. Investors with $87 trillion in assets have supported a request to 5,000 companies for disclosure of carbon emissions, reduction goals, and climate change strategies. Over 500 businesses, including General Motors, Microsoft, and Nike signed the Climate Declaration that states, “Tackling climate change is one of America’s greatest economic opportunities of the 21^st century.”

Presently, a majority of the Fortune 100 and two-thirds of the Global 100 have GHG emissions reduction commitments, renewable energy commitments, or both. These goals enable companies to reduce costs, build resilient supply chains, manage operational and reputational risk, and create new products and services.

Currently, Church & Dwight Co. Inc. does not publicly set targets for carbon emissions reductions and we believe it should do so in light of IPCC guidance. In contrast, its peers Clorox, Unilever, and L’Oreal set intensity and/or absolute emissions reductions targets.  Unilever states, “The business strategy of Unilever has been influenced deeply by climate change considerations.”  The company sets absolute targets and has developed a strategy to reduce energy use and achieve financial returns.

Whereas:

Over a 20-year period, methane’s impact on temperature is 86 times that of carbon dioxide and therefore contributes significantly to climate change. The oil and gas industry accounts for 70% of energy-related methane emissions.

Studies from Cornell, the University of Colorado and the University of Texas, among others, estimate highly varied methane leakage rates as a percentage of production, creating uncertainty and garnering attention from Forbes and The New York Times.

Reducing methane emissions in upstream oil and gas production is one of four policies proposed by the International Energy Agency (IEA) that “could stop the growth in global energy-related emissions by the end of this decade at no net economic cost” and help keep the increase in global mean temperature below 2 degrees Celsius.  All four policies “rely only on existing technologies”, “have already been adopted and proven in several countries”, and “would not harm economic growth in any country or region”.

The IEA highlights the risk of failing to implement best practice measurement and disclosure of methane emissions in its 2012 report “Golden Rules for a Golden Age of Gas.” The IEA recommends oil and gas producers undertake a set of actions “necessary to realise the economic and energy security benefits while meeting public concerns” of unconventional gas development. One of these actions is to “eliminate venting, [and] minimise flaring and other emissions,” and it recommends producers “consider setting targets on emissions as part of their overall strategic policies to win public confidence.”

The IEA also states “public authorities need to consider imposing restrictions on venting and flaring.” A failure by companies to proactively reduce methane emissions may invite more rigorous regulations.

In November 2013 Colorado proposed new regulations, with industry support, focusing on methane emissions and requiring companies to capture 95 percent of their hydrocarbon emissions and if flaring, to burn off 98 percent of the hydrocarbons.

Approximately ninety percent of Spectra Energy’s business is natural gas gathering, processing, storage and transportation. We believe its social license to operate may be at risk, and the company has a responsibility to set clear and public emission targets. We recognize some operations may incorporate best practice management; however, the risk of leaks at high growth or select geographies can negate best practices elsewhere.

Benefits of reducing methane emissions include worker safety improvements, maximizing available energy resources, protecting human health, reducing environmental impacts, and reducing economic waste. Upgrading assets may also improve performance, making equipment more robust and less susceptible to accidents, upsets and downtime.  Significant reductions in methane emissions are possible using new technologies with positive return on investment.

Resolved: Shareholders request Spectra Energy set reduction targets for methane emissions resulting from all operations under the company’s financial or operational control by October 2014.

1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
   1. The identity of the recipient as well as the amount paid to each; and
   2. The title(s) of the person(s) in the Company responsible decision-making.

The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website. Payments used for lobbying are not encompassed by this proposal.

Supporting Statement

Disclosure is in the best interest of the company and its shareholders, while gaps in transparency and accountability may expose MSI to risks that could threaten long-term shareholder value. The Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

MSI contributed at least $500,000 in corporate funds since the 2002 election cycle. (CQ: http://moneyline.cq.com and National Institute on Money in State Politics: http://www.followthemoney.org) However, MSI ranked poorly in the 2013 CPA-Zicklin Index of Corporate Political Accountability and Disclosure, which rated the top 200 of the S&P 500 companies, scoring just 47 out of 100 points.

Relying on publicly available data does not provide a complete picture of MSI’s political spending. MSI does publish an aggregate number for direct contributions and a list of trade associations, but without payment amounts. For example, the Company’s payments to trade associations or any “social welfare organizations” – organized under the 501(c)4 section of the IRS codes – used for political activities are undisclosed and unknown. At many companies, management does not know how third-party groups use corporate money politically. This proposal asks MSI to disclose all of its political expenditures, including payments to trade associations and other tax-exempt organizations. This governance reform would bring our Company in line with a growing number of leading companies, including Exelon, Microsoft, and MSI’s peer, Qualcomm, that support political disclosure and accountability and present this information on their websites.

The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets.

Shareholders request that Valmont Industries, Inc. issue a comprehensive report for reducing total greenhouse gas emissions from its products and operations based on current technologies and considering Intergovernmental Panel on Climate Change (IPCC) guidance. The report should include a review of the company’s plans and progress towards reducing total greenhouse gas emissions, be prepared at reasonable cost, omit proprietary information, and be made available to shareholders by November 2014

Whereas:

Reporting and rigorously managing environmental, social, and governance (ESG) business practices helps companies compete in a global business environment characterized by finite natural resources, changing legislation, and heightened public expectations. Reporting allows companies to publicize and gain strategic value from existing sustainability efforts and identify emerging risks and opportunities. ESG issues can pose significant risks to businesses, and without sufficient disclosure, stakeholders and analysts cannot ascertain whether the company is managing its ESG exposure.

A 2012 Deutsche Bank review of over 150 studies on sustainable investing found 89% of studies demonstrate that companies with high ESG ratings show market-based outperformance.

More than 1,200 institutional investors managing over $33 trillion have joined The Principles for Responsible Investment, and publicly commit to seek comprehensive corporate ESG disclosure and incorporate it into investment decisions.

Strong company-wide emission reduction goals can drive innovation and enhance shareholder value. A six-year Carbon Disclosure Project (CDP) study of 386 U.S. companies in the S&P 500 found that 79% of companies “earn a higher return on their carbon-reduction investments than on their overall corporate capital investments.” The study found that, “Those companies that set ‘stretch’ targets often reach and exceed them because the targets spur innovation and more profitable reductions than anticipated.” It concluded that those with “ambitious carbon reduction targets deliver larger emission reductions with higher financial returns than companies without such targets.”

Companies are increasingly sourcing renewable energy as a way to reduce their greenhouse gas emissions and limit their exposure to fluctuations in energy costs. 59% of Fortune 100 companies and almost two-thirds of Global 100 companies have set greenhouse gas emission reduction targets, renewable energy procurement targets, or both.

In order to stabilize global temperatures and mitigate the worst impacts of climate change, the IPCC, the world’s leading scientific authority on climate change, estimates that a 50% reduction in greenhouse gas (GHG) emissions globally is needed by 2050 (relative to 1990 levels).

Valmont Industries, Inc.’s overall ESG disclosure and related emission reduction initiatives are inadequate.

Supporting Statement:

In preparation of the report, we recommend the company consider using the Carbon Disclosure Project (CDP) to disclose climate change data. Over 4,600 companies responded to the CDP questionnaire in 2013, including 71% of the Global 500 and 67% of the S&P 500. Currently Valmont Industries, Inc. does not respond to the CDP questionnaire. The questionnaire is sent on behalf of 722 institutional investors representing $87 trillion assets.

(a) Policies and procedures for making political contributions and expenditures (both direct and indirect) with corporate funds, including the board’s role (if any) in that process, and

(b) Monetary and non-monetary political contributions or expenditures that could not be deducted as an “ordinary and necessary” business expense under section 162(e) of the Internal Revenue Code; this would include (but not be limited to) contributions to or expenditures on behalf of political candidates, political parties, political committees and other entities organized and operating under sections 501(c)(4) of the Internal Revenue Code, as well as the portion of any dues or payments that are made to any tax-exempt organization (such as a trade association) and that are used for an expenditure or contribution that, if made directly by the Company, would not be deductible under section 162(e) of the Internal Revenue Code.

The report shall identify all recipients and the amount paid to each recipient from Company funds.

Supporting Statement

As long-term Hess shareholders, we support transparency and accountability in corporate spending on political activities. Disclosure is in the best interest of the Company and its shareholders. Indeed, the Supreme Court’s 2010 Citizens United recognized the importance of disclosure when it said: “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

We acknowledge that Hess prohibits political contributions to candidates, parties, committees, and 527 organizations. We also applaud management’s efforts to enssure internal compliance after it was discovered last year, in receipt of this resolution, some employees had in fact used corporate funds to make political contributions in 2012. However, we believe company disclosures are still deficient because the Company will not disclose the following expenditures made for political purposes:

• A list of trade associations to which it belongs and how much it gave to each;
• Payments to any other third-party organization, including those organized under the section 501(c)(4) of the Internal Revenue Service codes; and
• Any independent expenditure made directly by the Company.

Information on indirect political engagement through trade associations and 501(c)4 groups cannot be obtained by shareholders unless the Company discloses it. This proposal asks Hess to disclose all of its political spending, direct and indirect. This would bring our Company in line with a growing number of leading companies, including Noble Energy, ConocoPhillips, and Exelon, which support political disclosure and accountability and present this information on their websites.

The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.

Customer trust is critical for any business, but especially for Internet and telecommunications companies that gather personal data concerning and affecting the lives of hundreds of millions of people in the U.S. and around the world.

The Wall Street Journal has reported that Verizon has provided millions of U.S. customers’ call records to the National Security Agency (NSA).

Controversy over government surveillance programs reportedly involving Verizon has spurred massive global press coverage, hearings in the U.S. Congress and European legislature, and widespread calls for reform. Brazilian President Rousseff called the NSA surveillance program “a breach of international law.” U.S. Senator Wyden said, “I have to believe the civil liberties of millions of American have been violated.” And by his account, the NSA has greatly exaggerated the effectiveness of the program in combatting terrorism.

Nevertheless, Verizon CEO McAdam, discussing subpoenas and company legal obligations, reportedly stated, “We are the largest telecommunications provider to the United States government, and you have to do what your customer tells you.”

In November, Privacy International petitioned the Organisation for Economic Cooperation and Development to investigate whether Verizon Enterprise failed to respect privacy by cooperating with British intelligence and not mitigating or preventing adverse privacy rights impacts.

Responding to growing public concern, companies such as Google, Microsoft, Twitter, LinkedIn, Facebook, Apple and Yahoo!, have published “Transparency Reports” disclosing information on government data requests. Google and Microsoft have sued seeking authorization to disclose further information to the public concerning these requests. Verizon has taken neither step.

These controversies may also present a challenge to the U.S. economy. The Information Technology and Innovation Foundation has estimated that disclosures regarding surveillance programs could cost the cloud computing industry $21 – $35 billion in business over the next three years if foreign customers decide the risks of storing data with a U.S. company outweigh the benefits.

Transparency is essential if individuals and businesses are to make informed decisions regarding their data. Privacy is a fundamental tenet of democracy and free expression. While Verizon must comply with its legal obligations, failure to persuade customers of a genuine and long-term commitment to privacy could present Verizon with serious financial, legal and reputational risks.

Resolved, shareholders request Verizon publish semi-annual reports, subject to existing laws and regulation, providing metrics and discussion regarding requests for customer information by U.S. and foreign governments, at reasonable cost and omitting proprietary information.

Supporting Statement: In preparing these reports, Verizon may, at its discretion, omit information on routine requests provided under individualized warrants. The reports can be prepared with consideration of existing Transparency (or Law Enforcement Request) Reports published by Internet companies, and where applicable, include such information as (1) how often Verizon has shared information with U.S. or foreign government entities; (2) what type of customer information was shared; (3) the number of customers affected; (4) type of government requests; and (5) discussion of efforts by Verizon to protect customer privacy rights.

The Wall Street Journal has reported that AT&T has provided millions of U.S. customers’ call records to the U.S. NationalSecurity Agency (NSA). “US Collects Vast Data Trove,” June 7,2013.

AT&T acknowledges in its corporate code of conduct that privacy is critical to the success of its business. Yet,the Company has not disclosed to customers and investors any information regarding the extent and nature of requests for customer data made on the Company by government agencies.

Controversy over U.S. government surveillance programs reportedly  involving AT&T has spurred massive global press coverage, hearings in the U.S. Congress and the European legislature,and widespread calls for reform. Brazilian President Dilma Rousseff called the NSA surveillance program “a breach of international law.”  U.S. Senator Ron Wyden said,”I have to believe the civil liberties of millions of American have been violated.”

Responding to growing public concern over these issues, major Internet companies such as Google, Microsoft, Twitter, LinkedIn, Facebook and Yahoo!, have published “Transparency Reports”, disclosing information on government data requests. Google and Microsoft have also filed in court seeking authorization to disclose further  information to the public concerning these requests. AT&T has not done so.

The Wall Street Journal has reported that AT&T’s plans to expand its mobile network in Europe, including anticipated acquisitions, could face “unexpected hurdles” due to its co-operation with NSA consumer information requests. “NSA Fallout Hurts AT&T’s Ambitions in Europe,” October 30,2013,

Transparency in this regard is essential if individuals and businesses are to make informed decisions regarding their personal data. Privacy is a fundamental tenet of democracy and free expression. While AT&T must comply with its legal obligations, failure to persuade customers of a genuine and long-term commitment to privacy rights could present AT&T with serious financial, legal and reputational risks.

Resolved, Shareholders request that the Company publish semi-annual reports,subject to existing laws and regulation, providing metrics and discussion regarding requests for customer information by u.s. and foreign governments, at reasonable cost and omitting proprietary information.

Supporting Statement:  In preparing these reports,the Company may, at its discretion, omit information on routine requests provided under individualized warrants. The reports should be prepared with consideration of existing Transparency (or Law Enforcement Request) Reports published by the major internet companies, and where applicable, include such information as (1) how often AT&T has shared information with U.S. or foreign government entities; (2) what type of customer information was shared; (3) the number of customers affected;(4) type of government requests; and (5) discussion of efforts by the company to protect the privacy of customer data.

Lobbying exposes Marathon Petroleum Corporation (“MPC”) to risks that could affect its stated goals, objectives, and ultimately shareholder value, and

We rely on the information provided by MPC to evaluate goals and objectives, and we, therefore, have a strong interest in full disclosure of its lobbying to assess whether its lobbying is consistent with its expressed goals and in the best interests of shareholders and long-term value.

Resolved, shareholders request the Board to authorize the preparation of a report, updated annually, disclosing:

1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

2. Payments by MPC used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

3. MPC’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4. Description of the decision making process and oversight by management and the Board for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which MPC is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels. The report shall be presented to the Audit Committee or other relevant Board committees and posted on MPC’s website.

Supporting Statement

As shareholders, we encourage transparency and accountability in the use of staff time and corporate funds to influence legislation and regulation both directly and indirectly. Absent a system of accountability, company assets could be used for objectives contrary to MPC’s long-term interests.

MPC has an interest in a number of high profile and controversial issues – such as the Alberta Tar Sands, waste from its Detroit refinery, and renewable fuel standards – that may have implications for its business and sound public policy.

Westinghouse Air Brake Technologies Corporation does not have women on its board of directors nor in senior executive positions;

Our company’s peers , WABCO Holdings and Trinity Industries, have women on their board of directors;

A 2012 report by the business-led Committee for Economic Development entitled Fulfilling the Promise: How More Women on Corporate Boards Would Make America and American Companies More Competitive notes that the percentage of women on all U.S. corporate boards has been below 13% for a decade;

We believe that diversity, inclusive of gender and race, is an essential measure of sound governance and a critical attribute to a well-functioning board;

A growing body of academic research shows that there is a positive relationship between firm value and the percentage of women and minorities on boards.

RESOLVED: Shareholders request that the Board of Directors, consistent with its fiduciary duties:

• Take every reasonable step to ensure that women and minority candidates are in the pool from which Board nominees are chosen;

• Publicly commit itself to a policy of Board inclusiveness to ensure that women and minority candidates are routinely sought as part of every Board search the company undertakes;

• Publish a report by October 2014, at reasonable expense and omitting proprietary information, on its efforts to encourage diversified representation, inclusive of gender and race on the Board, and the manner in which the nominating committee or Board of Directors will assess the effectiveness of its efforts and policy.

Supporting Statement

Director and nominee diversity helps to ensure that different perspectives are brought to bear on issues, while enhancing the likelihood that proposed solutions will be nuanced and comprehensive.

According to recent studies from researchers at Hebrew University, Wellesley Centers for Women, University of Western Ontario and V. Kramer Associates, having a critical mass of at least three women directors is good for corporate governance.

According to an August 2012 report by Credit Suisse Research Institute, which evaluated the performance of 2,360 companies globally over the six years ending December 2011, companies with one or more women on the board delivered higher average returns on equity, lower leverage, better average growth, and higher price/book value multiples.  

Wabtec states in its Corporate Governance Guidelines that its Nominating and Corporate Governance Committee is charged with reviewing with the Board the requisite skills and characteristics for new Board members. The assessment includes “consideration of background, skill needs, personal characteristics, diversity and business experience.”  Neither diversity inclusive of gender nor ethnicity is mentioned as factors in board nominee searches.

In our view, companies combining competitive financial performance with high standards of corporate governance, including a gender balanced board, are better positioned to generate long-term value for their shareholders.

For all the reasons above, we urge our fellow shareholders to vote in favor of this proposal.

On December 2, 2013, Trillium Asset Management was one of over 60 organizations that joined CERES Trust, Center for Food Safety, Pesticide Action Network and Beyond Pesticides in signing an open letter to the U.S. EPA asking the Agency to impose an immediate moratorium on the use of neonicotinoids, a toxic pesticide that is believed to be a major contributing factor to the alarming decline in honey bees.

The letter was published as a full page ad in the New York Times.

Fifteen countries, not including the U.S., have imposed a two-year restriction on these specific pesticides. The EPA estimates that it will take 5 years of consideration before a U.S. decision will be made.

The goal of a moratorium is not the outright ban of neonicitinoids, rather to press EPA to speed up its assessment process and focus on developing clear rules around restricted use of these pesticides and look toward potential phase out as alternative pesticides come to market.

November 26, 2013: Trillium Asset Management is pleased to announce that our firm has received a “GIIRS 5 Star” rating for 2013, placing Trillium in the top quintile of GIIRS-rated companies.

GIIRS (Global Impact Investing Rating System) is an independent third-party system for assessing the social and environmental impact of developed and emerging market companies and funds.

The GIIRS methodology scores companies’ key performance indicators relevant to the company’s industry, geography, size, and social mission on a scale of 1 – 5 stars, in the following impact areas:

• Governance
• Workers
• Community
• Environment

For over 30 years, Trillium has strived to achieve the same level of diligence and reporting that we ask of companies with whom we interact. We believe that GIIRS, with its comprehensive and transparent system for assessing the social and environmental impact of developed and emerging market companies, can facilitate the flow of capital and provide leadership on judging impact performance as a public good.

You can read a copy of Trillium’s GIIRS report here.

November 22, 2013: Oxfam, the AFL-CIO, Trillium Asset Management and several other investors today filed a formal shareholder resolution urging PepsiCo to account for land rights violations in its supply chain.

A recent investigation by Oxfam revealed that companies supplying sugar to PepsiCo and its franchisees have been implicated in violent land grabs, pushing small farmers off their land and undermining their livelihoods.

33 investors representing more than $1.4 trillion in assets have issued a statement to companies in support of Oxfam’s Behind the Brands campaign and more than 250,000 people have already signed urging PepsiCo to declare zero tolerance for land grabs.

This month, Coca-Cola responded to the campaign by declaring “zero tolerance” for land grabs and committing to steps to prevent land conflicts in its supply chain. So far PepsiCo and Associated British foods have yet to address the issues highlighted by Oxfam’s report, Nothing Sweet About It.

“The pressure is only increasing on PepsiCo to address the realities of its supply chain,” said Judy Beals, campaign manager for Oxfam’s Behind the Brands Campaign. “The company is leaving itself open to immense risks if it fails to tackle land conflicts in areas where it sources ingredients. Coca-Cola has already identified these risks and made promises to address them. The question investors should ask is: why is PepsiCo so far behind?”

Trillium Asset Management, LLC commends the FDIC and OCC for issuing its final supervisory guidance on deposit advance products. As an investor in banks that offer or may offer these products we agree with the FDIC and OCC that it is important for banks to incorporate fully and comprehensively the credit, reputational, operational, and compliance risks that these products present.

While small-dollar credit products are useful and necessary for consumers, banks have a financial and social responsibility to ensure they are offered in a sound manner. We believe that responsible lending practices that strengthen rather than weaken customers’ financial health are in the best interest of banks, clients, shareholders, and the wider economy and call upon all banks to swiftly implement the guidelines for responsible small loans articulated by the OCC and FDIC.