Two weeks earlier, at a press conference broadcast on C-Span, a coalition of citizens groups² announced plans to transform this year’s stockholder meetings into a “shareholder spring” of protest against corporate involvement in politics. Bob Edgar, president of Common Cause and former Democratic congressman from Pennsylvania, told reporters, “We plan to let these corporations know that there will be a great cost to playing politics.”

What happened to turn the once un-sexy topic of campaign finance reform into a hot issue? Citizens United, of course – the Supreme Court’s January 2010 decision that struck down restrictions on independent political spending by corporations and unions – and its subsequent impact upon the 2010 and 2012 election cycles.

“The problem of Citizens United is that it allows corps to drown out the voices of regular people,” Edgar said at the event. Last fall, Common Cause urged the nation’s top 700 corporations to refrain from political giving during the 2012 election season. “We are working to give that request teeth through the shareholder resolution process,” Edgar continued, announcing a partnership with Trillium Asset Management (Trillium) and Green Century Capital Management to place resolutions at Bank of America, 3M and Target. “We plan to organize press conferences and rallies at each of these shareholder meetings. We plan to let these corporations know that there will be a great cost to playing politics.”

Readers of this newsletter know that shareholder resolutions addressing corporate political spending have been quietly transforming corporate disclosure and spending policies since the mid-2000s. Working in close coordination with the Washington-based Center for Political Accountability (CPA), investors have convinced more than 100 companies to commit to greater oversight and disclosure of political expenditures. What is new this year is the even-greater need for corporate self-restraint given the Court’s decision, the embrace of shareholder resolutions as a tool by citizens groups, and the new directions that shareholder resolutions are taking.

The New Landscape

It was only a few months after Citizens United was handed down before the risks that it provided became glaringly apparent. In the early part of 2010, Target Corporation gave a substantial ($100,000) contribution to an independent committee set up to support a Minnesota gubernatorial candidate known for his anti-LGBT (lesbian, gay, bisexual, transgender) views. When the news broke, the company endured a full-scale backlash of in-store protests, a grassroots boycott and widespread media coverage. Trillium and other social investment firms quickly filed a shareholder proposal aimed at strengthening the company’s internal criteria and vetting processes used to make political donations.

The other corporate contributors to the committee, known as MN Forward, must have breathed a sigh of relief that Target took the brunt of the public’s wrath. 3M, however, defiantly made a second large contribution to MN Forward after the Target controversy broke, insisting on its right to support “pro-business” candidates even if they took positions in direct opposition to the company’s other values (such as valuing diversity in the workforce and community).

As a 527 committee, MN Forward was required to disclose the identity of its large donors, but secrecy is common, if not the norm, after Citizens United.³ Unlike 527s, 501c-4’s and trade associations (501c-6’s) are not required to disclose who their donors are, and both can funnel money to additional parties to make donor identities even harder to trace. These loopholes have led to the rise of Super Pacs.

For example, PhRMA, the drug industry trade association, gave $4.5 million to a 501c-4 in 2010. The recipient organization did not have to disclose the gift, and it only became public information when PhRMA filed its 2011 tax returns, full year after the 2010 elections.⁴

The trend lines are alarming. Spending by outside groups between the 2006 and 2010 mid-term elections rose from about $50 million to $275 million.⁵ Total independent expenditures rose from nearly $69 million to approximately $305 million in those cycles.⁶ The impact of Citizens United could not be clearer.

New resolutions push the envelope

Since 2004, Trillium has been a leader in corporate political spending advocacy. Our engagements with more than 20 companies have led the majority of them to make governance and transparency improvements. This year we’ve continued our successful run with Chubb, State Street and Halliburton agreeing to make significant improvements to their policies, particularly in the area of disclosure.

Trillium’s position has evolved since Citizens United. We believe that even though corporations’ right to spend shareholders’ money freely in the political process has been affirmed, it is inappropriate, unwise and overly risky to do so. We will continue to advocate for complete transparency and board-level oversight of political contributions at those companies that choose to engage in the political process, but where we can, we will also encourage corporations to simply refrain altogether. Companies should not be in the business of making political decisions on behalf of their shareholders, who cannot “opt out” of their contribution to these efforts in the way that union members can collect a refund for the portion of their dues used for political campaigns.

Our resolutions at 3M and Bank of America (and Green Century’s at Target) represent new ground – the first time that institutional investors are proposing that companies refrain completely from all categories of political spending, and the first time that such proposals will be championed by citizens’ groups.

Their recent mishaps well illustrate why we believe 3M and Target are good candidates for a “no spending” policy. As for Bank of America, as a company it is still reeling from the financial and economic crisis caused in part by misdeeds and miscalculations of its own making. Its industry was described by the Center for Responsive Politics, a group that tracks political spending, as “far and away the largest source of campaign contributions to federal candidates and parties.”⁷ In the view of many, the government bailouts that guaranteed the survival of Bank of America and its peers were granted in no small part in return for Wall Street’s generous political spending over the years. The New York Times described Bank of America as “one of the most demonized corps in America…. a symbol of all that’s wrong with banking, from stick-it-to-’em fees to dubious home foreclosures,”⁸ and as I write this, Matt Taibbi, the writer whose “giant vampire squid” characterization of Goldman Sachs will haunt that company for some time to come, has just published the screed “Bank of America: Too Crooked to Fail,” in Rolling Stone.

According to the CPA, Bank of America has contributed approximately $6.7 million in corporate funds to political activities since 2002. “The true figure is difficult to determine because reporting at the state-level is incomplete and can be misleading. This estimate also excludes payments Bank of America has made to trade associations or other tax-exempt organizations that fund political activities,” because the bank does not disclose that information. In a recent CPA ranking exercise, Bank of America placed 71st in the S&P 100.⁹

Companies that refuse to refrain from all types of political spending tend to claim that it would be a form of unilateral disarmament. However, this argument conveniently ignores other ways in which their voice can be heard on public policy issues – through lobbying, corporate PACs, and via the personal donations of employees, three routes our resolution does not address. Nor would they be breaking new ground, as a number of companies either have adopted policies banning all forms of political spending or have refrained from such spending even in the absence of such policies.¹⁰

A surge of investor interest

Proxy Preview 2012, a joint publication of As You Sow Foundation and the Sustainable Endowments Institute, has dubbed political spending “the headline issue” on corporate ballots this spring. In addition to the three “no spending” resolutions from Trillium and Green Century, the CPA and its partners have filed 47 addressing oversight and disclosure (which earned about 30 percent of the vote last year, on average), and Northstar Asset Management has filed seven that call for shareholder approval of political spending budgets.¹¹ In addition, forty more proposals call for greater transparency about corporate lobbying budgets and priorities.

Public policy measures

Trillium is supporting several approaches aimed at blunting the impact of Citizens United or reversing it entirely. In February, Trillium CEO Matt Patsky testified before a Massachusetts state legislative subcommittee in support of a bill calling upon Congress to propose an amendment to the U.S. Constitution reversing Citizens United.

Last year, we signed onto an amicus brief in a Montana case in support of the state’s ban on corporate political spending, which is under challenge by a conservative group that wants corporations to be spend unlimited sums in elections.

We have also added our name to letters supporting the DISCLOSE Act, which would broaden disclosure requirements for political donors, and the rulemaking petition championed by CAPS officials.

And the proposals that drew picketers to the SEC? It has set a record for that agency with 178,000 signatures of support.

FOOTNOTES:

1. Founded in August 2010, CAPS is “the nation’s first and only bi-partisan coalition of elected officials dedicated to curbing corporate influence in our elections.” (See http://politicalspending.org.)

2. Common Cause, Public Citizen, Coalition for Accountability in Political Spending (CAPS), Service Employees International Union, MoveOn.org, Americans United for Change, Public Interest Research Group (PIRG), Public Campaign Action Fund, Campaign for America’s Future, National People’s Action, Progress NOW, Every Child Matters, Health Care for America Now, Occupy Wall Street, and USAction

3. According to Craig Holman of Public Citizen’s Congress Watch, the proportion of groups making electioneering communications that reported their donors declined from nearly 100 percent in 2004 to 34 percent in 2010. (Webinar sponsored by Business Ethics Network, September 13, 2011.)

4. Michael Beckel, “Drug Lobby Gave $9.4 Million to Nonprofits That Spent Big on 2010 Election,” February 27, 2012 (at http://www.iwatchnews.org/2012/02/27/8271/drug-lobby-gave-94-million-nonprofits-spent-big-2010-election).

5. Holman, ibid.

6. Meredith McGehee, Campaign Legal Center (Webinar sponsored by Business Ethics Network, September 13, 2011.)

7. “Finance/Insurance/Real Estate” industry profile by the Center for Responsive Politics at www.opensecrets.org/industries/indus.php?Ind=F.

8. “The Image Officer With A Lot to Fix,” New York Times, January 14, 2012.

9. The CPA-Zicklin Index of Corporate Political Disclosure and Accountability, October 2011 (www.politicalaccountability.net/index.php?ht=a/GetDocumentAction/i/5800).

10. Corporate Governance of Political Expenditures: 2011 Benchmark Report on S&P 500 Companies (www.siinstitute.org).

11. As You Sow Foundation and the Sustainable Investments Institute, Proxy Preview 2012 (asyousow.org/publications/2012/ProxyPreview2012.pdf).

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IMPORTANT DISCLOSURE:
The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions.  These views are not intended to be a forecast of future events or a guarantee of future results.  These views may not be relied upon as investment advice.  The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned.  It should not be assumed that investments in such securities have been or will be profitable.  To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients.  The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data.  This piece is for informational purposes and should not be construed as a research report.

*****

A shareholder proposal calling upon Verizon Communications Inc. (NYSE, NASDAQ – VZ) to publicly commit to network neutrality principles on its wireless networks gained significant momentum at the company’s annual meeting as shareholders supported the proposal by an even larger margin than their counterparts at AT&T did in a similar recent vote.

The proposal at Verizon, which was offered and considered for the first time this year, attracted 7.9% of the votes cast by the company’s shareholders at the annual meeting in Huntsville, Alabama on May 3.  A similar measure at AT&T Inc.’s annual meeting on April 27 attracted 5.9% of the shares voted.  The vote results are contained in official filings by the companies with the Securities and Exchange Commission.

By winning more than 3 percent of the vote of shareholders at both AT&T and Verizon, the proposals reached an important qualifying threshold set by the SEC for inclusion in next year’s proxy voting at both companies.

Based on Verizon’s recent share price, the results mean that investors holding stock worth more than $5.2 billion voted in favor of the resolution.

A similar proposals regarding wireless network neutrality is scheduled for a vote at Sprint Nextel Corporation (NYSE – S) on Tuesday, May 15.

Network neutrality is a core principle that has guided the Internet since its inception. This principle enables an open Internet by making sure that companies that provide Internet access treat all content equally—regardless of source, destination or ownership.  This prevents a handful of large companies from paying wireless providers premium rates in exchange for faster speeds on their sites than others receive. Without it, consumers risk experiencing a dramatically different Internet, where large corporate sites able to pay premium costs load and operate at fast speeds while smaller newer sites struggle to function and compete with slower speeds. Numerous studies also demonstrate that network neutrality is important to the prosperity of Internet Service Providers and economic growth.

The shareholder proposals at AT&T, Verizon and Sprint were allowed on the proxy ballots following an SEC staff ruling earlier this year which denied “no-action” requests by the companies.  The companies had sought to block shareholders from voting on the proposals by arguing, among other things, that network neutrality was not a “significant public policy issue.”  The SEC staff rejected that argument in view of what it called “the sustained public debate over the last several years concerning net neutrality and the Internet and the increasing recognition that the issue raises significant policy considerations.”  

The proposals ask each company to publicly commit to operate its wireless broadband network “consistent with network neutrality principles – i.e., operate a neutral network with neutral routing along the company’s wireless infrastructure such that the company does not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership or destination.”

For more information:

Michael Connor, Executive Director, Open MIC, 646-493-9704, mconnor@openmic.org

Jonas Kron, Vice President, Trillium Asset Management, (503) 592-0864, jkron@trilliuminvest.com

Laura Campos, Director, Shareholder Activities, Nathan Cummings Foundation, 212 787 7300 ext. 3615,
Laura.Campos@nathancummings.org

####

Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing.  With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982.  A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.

The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions.  These views are not intended to be a forecast of future events or a guarantee of future results.  These views may not be relied upon as investment advice.  The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned.  It should not be assumed that investments in such securities have been or will be profitable.  To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients.  The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data.  This piece is for informational purposes and should not be construed as a research report.

Contact: Mary Boyle – Common Cause (202) 736-5770

MINNEAPOLIS – Institutional shareholders and citizen activists challenged Minneapolis-based 3M Corp’s, political spending on Tuesday, urging the company to end its political giving and disclose its expenditures on lobbying.

As investor representatives inside 3M’s annual shareholders’ meeting spoke in favor of two political spending measures on the company’s proxy, activists outside rallied in support of political spending reform at the manufacturing giant.

 “It’s time for 3M corporate leadership to stop using our company’s general treasury money as a political slush fund.  There needs to be accountability,” said Mike Dean, executive director of Common Cause Minnesota and a 3M proxy holder.

Dean noted that a recent study from the University of Minnesota’s Carlson School of Management indicates that corporate political spending correlates negatively to long term shareholder value.  “There is no reason for our company to engage in this practice,” he asserted.

Trillium Asset Management, a Boston based investment firm, filed a resolution on 3M’s 2012 proxy asking that the corporation refrain from political spending. “Our proposal seeks to ensure that 3M protects itself from the reputation damage that can be incurred from spending corporate general treasury funds to influence electoral politics,” said Shelly Alpern, a Trillium vice president who spoke at the meeting. “In recent years 3M has engaged in political spending activity that, in the opinion of the proponents, has courted unnecessary risk to its brand and reputation as a civil leader.”

Trillium’s shareholder resolution asks that the corporation refrain from political spending, whether direct or indirect via Super PACs or other third-party vehicles.It is the first political spending resolution of its in kind since the U.S. Supreme Court’s Citizens United decision in January 2010 opened the door for corporations to use their treasuries to support or oppose political candidates.

Trillium has filed a similar resolution at Bank of America in advance of its shareholder meeting in Charlotte, N.C. later this week.

Outside the 3M meeting people marched in support of the Trillium proposal, carrying signs which read “3M Stick to Business” and “Post Its – Not Politics.”  The diverse crowd was organized by advocacy organizations Common Cause, Public Citizen, Take Action Minnesota, Minnesotans for a Fair Economy and the Service Employees International Union.

In Citizens United, the Supreme Court lifted a century-old ban on the use of corporate treasury funds for political purposes.  Shareholders are increasingly concerned that such funds, which can be funneled to SuperPACS, trade associations and other organizations for political use — often without proper oversight or board and shareholder knowledge — could create a risk to shareholder value.

“We have had enough of 3M and major corporations giving their customer’s hard earned dollars to organizations like ALEC and Minnesota Forward, and to politicians that protect tax breaks for the 1% and cut public services,” said Harrison Bullard, Vice-President of SEIU Local 26 and President of the SEIU AFRAM MN Chapter.

The “Shareholder Spring” actions that Common Cause and its allies are conducting this week in Minneapolis and Charlotte are part of a larger umbrella of activities under the 99% Power banner.  99% Power is a broad coalition that includes workers and retirees, families fighting foreclosure and the unemployed, students, immigrants and environmentalists.

The 3M proposals on lobbying transparency and the cessation of political spending are part of a separately-coordinated wave of shareholder proposals at more than 100 companies this year.

#          #          #          #

 Common Cause is a nonpartisan, grassroots organization dedicated to restoring the core values of American democracy, reinventing an open, honest, and accountable government that works for the public interest, and empowering ordinary people to make their voices heard.

Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.

The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.

The story referenced Matt Patsky’s presentation at the Investment Management Consultants Association’s annual conference in Washington, DC.

In that presentation, Matt pointed out that last year in the United States; the average chief executive’s compensation was 380 times that of the average worker at that company. By comparison, the average chief executive in Germany makes 12 times as much as the average worker.

“Occupy Wall Street raised a lot of issues that helped us in terms of making sure we are articulating how we can have a positive impact in both social and environmental outcomes with people’s money,” [Matt Patsky] said. “I also think we’ve been more aggressive in terms of looking at opportunities in what we call community investments, where there are higher social or environmental outcomes.”

The entire article can be read here (free registration required)

“In recent years, significant percentages of shareholders at some large companies have voted to require their firms to provide increased disclosure about the extent of their political donations, although none of these resolutions have passed to date. And Trillium views its more aggressive proposal to get BofA to end all political spending as intimately connected with a campaign pressuring the SEC to require disclosure.

‘For the better part of the last decade, we’ve seen consistent and increasingly strong shareholder votes on political spending proposals,’ said Shelley Alpern, Vice President of Shareholder Advocacy for Trillium. A growing number of investors consider this area to be a material factor in evaluating the financial worth a company and the strength of its governance mechanisms. Investors will be better off when the SEC requires disclosure from all publicly traded companies. Companies deserve a level playing field and investors need the information.”

The entire article can be read here.

“For nearly 30 years, Trillium Asset Management, a leader in sustainable and responsible investing, has been helping clients invest directly in communities to create social impact in exchange for modest financial returns.

‘The money that our clients have placed in community investments instruments has provided capital to non-profit organizations that have created and saved tens of thousands of jobs and homes in the communities they serve’, says Randy Rice, Trillium’s Community Investments Manager and a senior portfolio associate in its Boston office.”

You can read the entire article here.

Cox writes “[I]t will be up to citizen shareholders to blunt the impact of Citizens United. They can start on Tuesday in St. Paul and Wednesday in Charlotte when the shareholders of 3M and BofA, respectively, gather. They’ll be voting on proposals submitted by Trillium Asset Management of Boston to ‘request that the board of directors adopt a policy prohibiting the use of corporate funds for any political election or campaign.’”

You can read the entire column here.

Shares worth more than $11.4 billion voted in favor; Similar votes upcoming at Verizon and Sprint

April 27, 2012: A shareholder proposal calling upon AT&T Inc. (NYSE – T) to publicly commit to network neutrality principles on its wireless networks attracted important support in initial voting results released today at the company’s annual meeting in Salt Lake City.

The proposal, which was voted on for the first time this year, attracted at least 5.9% of the votes cast in this year’s proxy vote at AT&T, according to preliminary results released by the company. That percentage could climb higher in the final tabulation. By garnering support from more than 3 percent of voting shareholders, net neutrality will be assured a continued place on next year’s ballot. Based on the company’s recent share price, the results mean that investors holding stock worth more than $11.4 billion voted in favor of the resolution.

Similar proposals regarding wireless network neutrality are scheduled for votes at the upcoming annual meetings of Verizon Communications (NYSE – VZ) on May 3 and Sprint Nextel Corporation (NYSE – S) on May 15.

“We fully intend to continue pressing these issues which are important to shareholder and public interests, and we look forward to further dialogue with AT&T management,” said Jonas Kron, Vice President of Trillium Asset Management, LLC, who presented the proposal to AT&T shareholders, senior management and board members at the annual meeting.

“Network neutrality has significant implications for the American economy and the large institutional investors whose returns depend on its performance,” according to Laura Campos, director of shareholder activities at the Nathan Cummings Foundation. “The vote at AT&T indicates that investors are beginning to recognize the economic importance of an open and free Internet and vote their shares accordingly.”

Network neutrality is a core principle that has guided the Internet since its inception. This principle enables an open Internet by making sure that companies that provide Internet access treat all content equally—regardless of source, destination or ownership. This prevents a handful of large companies from paying wireless providers premium rates in exchange for faster speeds on their sites than others receive. Without it, consumers risk experiencing a dramatically different Internet, where large corporate sites able to pay premium costs load and operate at fast speeds while smaller newer sites struggle to function and compete with slower speeds. Numerous studies also demonstrate that network neutrality is important to the prosperity of Internet Service Providers and economic growth.

“This vote at AT&T is important because its signals to media and technology companies that investors believe network neutrality is important – comparable to social issues confronting other sectors where investors have successfully pressed for greater accountability,” said Michael Connor, Executive Director of the Open Media and Information Companies Initiative, or Open MIC (www.openmic.org), which helped formulate the shareholder resolutions.

Connor noted that the vote in favor of network neutrality principles compared very favorably to those on proposals regarding other social and environmental issues, in which companies have agreed to adopt carbon emission targets, adopt equal benefit policies for all employee families and disclose political donations. For example, a current campaign led by the Center for Political Accountability, seeking to require corporate disclosure of political spending, started in 2004 with an average 9.1% vote in favor. Since then, 100 major public corporations, including half of the S&P 100, have adopted political disclosure and accountability.

The shareholder proposals at AT&T, Verizon and Sprint were allowed on the proxy ballots following an SEC staff ruling earlier this year which denied “no-action” requests by the companies. The companies had sought to block shareholders from voting on the proposals by arguing, among other things, that network neutrality was not a “significant public policy issue.” The SEC staff rejected that argument in view of what it called “the sustained public debate over the last several years concerning net neutrality and the Internet and the increasing recognition that the issue raises significant policy considerations.”

By winning more than three percent of the vote at AT&T, the proposal reached an important qualifying threshold set by the Securities and Exchange Commission (SEC) for inclusion in next year’s proxy voting.

The proposals at AT&T and Verizon were filed by Trillium Asset Management (on behalf of its clients), the Nathan Cummings Foundation, the Benedictine Sisters of Mount St. Scholastica in Atchison, Kansas, and several individual investors including Mike D of the Beastie Boys. The proposal at Sprint was filed by the Nathan Cummings Foundation.

The proposals ask each company to publicly commit to operate its wireless broadband network “consistent with network neutrality principles – i.e., operate a neutral network with neutral routing along the company’s wireless infrastructure such that the company does not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership or destination.”

For more information:

Michael Connor, Executive Director, Open MIC, 646-493-9704, mconnor@openmic.org

Jonas Kron, Vice President, Trillium Asset Management, (503) 592-0864, jkron@trilliuminvest.com

Laura Campos, Director, Shareholder Activities, Nathan Cummings Foundation, 212 787 7300 ext. 3615, Laura.Campos@nathancummings.org

####

Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.

The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.

It is important that our company’s lobbying positions, and processes to influence public policy, are transparent.  Public opinion is skeptical of corporate influence on Congress and public policy and questionable lobbying activity may pose risks to our company’s reputation when controversial positions are embraced. Hence, we believe full disclosure of FedEx’s policies, procedures and oversight mechanisms is warranted. 

Resolved, the stockholders of FedEx Corporation (“FedEx”) request the Board authorize the preparation of a report, updated annually, and disclosing: 

1.   Company policy and procedures governing the lobbying of legislators and regulators, including that done on our company’s behalf by trade associations. The disclosure should include both direct and indirect lobbying and grassroots lobbying communications. 

2. A listing of payments (both direct and indirect, including payments to trade associations) used for direct lobbying as well as grassroots lobbying communications, including the amount of the payment and the recipient.

 3. 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 the management and Board for 

     a. direct and indirect lobbying contribution or expenditure; and

     b.  payment for grassroots lobbying expenditure. 

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation, (b) reflects a view on the legislation and (c) encourages the recipient of the communication to take action with respect to the legislation. 

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 of the Board or other relevant oversight committees of the Board and posted on the company’s website.  

Supporting Statement  

 As stockholders, we encourage transparency and accountability in the use of staff time and corporate funds to influence legislation and regulation both directly and indirectly. We believe such disclosure is in stockholders’ best interests. Absent a system of accountability, company assets could be used for policy objectives contrary to FedEx’s long-term interests.     

FedEx spent approximately $38.7 million in 2010 and 2011 on direct federal lobbying activities, according to disclosure reports.  (US Senate Office of Public Records).This figure may not include grassroots lobbying to directly influence legislation by mobilizing public support or opposition. Also, not all states require disclosure of lobbying expenditures. And FedEx does not disclose its contributions to tax-exempt organizations that write and endorse model legislation, such as FedEx’s $25,000 contribution to the American Legislative Exchange Council (“ALEC”) annual meeting (http://thinkprogress.org/politics/2011/08/05/288823/alec-exposed-corporations-funding/). 

Membership and financial support of ALEC became very controversial when ALEC’s role in creating and promoting model state legislation on Arizona style immigration bills, Stand Your Ground legislation, anti-environmental legislation and restrictions on voter registration was exposed. 

Facing this controversy, companies like Coca-Cola, McDonald’s, PepsiCo, Wendy’s and Kraft Foods withdrew their involvement and funding of ALEC.

“In 2011, a group of influential investors led by Trillium Asset Management—whose members represent $170 billion in assets and own 13 million shares of Anglo American stock—grew alarmed by Pebble and urged the EPA to assess the impact of the mine on the Bristol Bay watershed. If the EPA deems Pebble a threat to water supplies, it could authorize a review under Section 404(c) of the Clean Water Act, which could block the mine once and for all. A decision is due this spring, and it is the opposition’s best hope”, Prud’homme continues.

The full article can be read here.

“I can’t think of anyone more deserving to win this year’s Bavaria Award,” said Mindy Lubber, president of Ceres. “Tessa is an inspirational leader who has worked tirelessly for more than 20 years integrating environmental and social concerns into investing and business decisions. She has taken Joan Bavaria’s original vision of advancing socially responsible investing and expanded it to the markets in Europe, and now Asia, creating real impact beyond the U.S.”

Tennant co-founded The Ice Organisation, which encourages consumers to purchase more sustainable products and services from a wide range of retail partners, mobilizing mass consumer purchase power to reduce carbon emissions and mitigate the effects of climate change. She also co-founded the UK’s first equity investment fund for sustainable development in 1988, now called the Jupiter Ecology Fund.

She was Chair and co-founder of the UK Social Investment Forum, which promotes responsible investment and other forms of finance that support sustainable economic development. She also co-founded the Carbon Disclosure Project (CDP), which has enabled hundreds of companies and investors to better understand, report on and mitigate risk from carbon pollution and climate change.

In 2001 she co-founded the Association for Sustainable & Responsible Investment in Asia (ASrIA) and remains on the Board. Based in Hong Kong, ASrIA is a leading nonprofit organization promoting sustainable investment practices in Asia, including fostering SRI products and services and providing training, research and other resources.

The Bavaria Award is presented by Ceres annually to an inspiring leader working to move capital markets toward a system that balances economic prosperity with social and environmental concerns. The award’s name honors Joan Bavaria, a pioneer of social investing who founded Ceres and Trillium Asset Management. Bavaria passed away in 2008.

 “Tessa has been instrumental in elevating sustainability as a business and investor issue across the globe,” said Trillium CEO Matt Patsky. “She has created multiple funds and organizations that are driving sustainable investment behavior and having a real impact on business, the environment and the global economy.”

In the early nineties, Tennant served as a member of the UK Government’s Advisory Committee on Business and the Environment, and helped develop HRH The Prince of Wales’s Business in the Environment initiative, which educates senior business executives on practical ways to integrate social and environmental solutions into their business operations.  She is also Chair of the Global Cool Foundation.  She has served as a World Wildlife Fund UK Ambassador and is a Fellow of the Schumacher Society.

“I’m deeply honored.” Tennant said in her acceptance speech. “This award is as much for the people in Hong Kong at the Association for Sustainable & Responsible Investment in Asia, and for the people in London at the Carbon Disclosure Project and other initiatives I’ve been involved with, as it is for me. Joan Bavaria has been a complete heroine of mine all my working life. She gave me that confidence to just go out and do it.” (View her entire acceptance speech here.)

About Ceres
Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $10 trillion. For more information, visit www.ceres.org and www.incr.com.

About Trillium Asset Management
With a history spanning three decades, Trillium is the oldest independent investment advisor focused exclusively on sustainable and responsible investing. Trillium manages over $1 billion in assets for clients including high net worth individuals, foundations, endowments, religious institutions, and other non-profits. To learn more about Trillium, please visit www.trilliuminvest.com.

After the hearing, the CFPB invited the public to review the hearing transcript and provide comments on the issues raised in it. As concerned investors, Trillium responded to the request.

“Based on our research of the effects that payday loans and similar financial products like ‘direct deposit advance loans’ have on consumers, we believe that the risks posed to investors by the presence of such products in the financial marketplace are potentially severe,” said Seth Magaziner, Financial Sector Analyst at Trillium.  “While payday lending may be a profitable businesses activity in isolation, our analysis suggests that the cycle of debt and increased likelihood of bankruptcy that the high costs of payday products impose on consumers have a negative net impact on the broader economy that will tax the long term returns of a diversified investment portfolio.”

Trillium’s complete comments can be read here.

The use of McAfee’s SmartFilter product by repressive countries to suppress speech has been of great concern to us for the past year. Trillium has been engaging Intel on these issues since April of 2011. We believe that taking this important step reduces the company’s risk profile and demonstrates respect for human rights impacts.

Trillium continues to engage Intel on human rights issues and we look forward to continuing this productive dialogue.

Bowing to pressure from stakeholders, Pakistan’s Ministry of Information Technology, Farooq Ahmed Awan, has indicated that the project, known as “the great firewall of Pakistan”, may be withdrawn.

April 9, 2012

Contact: Randy Rice, Trillium Asset Management, LLC – 617-423-6655

Shareholder Group: Vote Yes on Network Neutrality, for the Good of Investors, Telecom Companies and the Economy

Trillium Makes Case to Shareholders Before Landmark Votes

BOSTON, MA – As shareholders of AT&T (NYSE – T), Verizon (NYSE – VZ) and Sprint (NYSE – S) prepare to vote for the first time to uphold network neutrality policies on wireless networks, Trillium Asset Management, LLC (“Trillium”), an investment management firm, wrote an open letter to fellow Verizon shareholders today urging a yes vote on network neutrality to protect their investments, the economy, under-represented communities and the interests of all wireless consumers.

“In light of the huge financial and social benefits of an open Internet, we call on shareholders to tell these companies that providing preferential treatment for some content while discriminating against other content is unacceptable,” said Trillium Vice President Jonas Kron. “We believe the weight of the evidence clearly demonstrates that network neutrality is in the interests of the companies’ shareholders as well as the interests of all consumers.”

“Given this issue’s potential significance for the future of these companies, our economy and our society, we believe that investors should support these proposals” stated Laura Campos, director of shareholder activities at the Nathan Cummings Foundation, the lead filer of the Sprint proposal.  “America has long prospered when principles of freedom and liberty are honored, and for the sake of its reputation and long-term financial health, we hope that Sprint will now embrace these principles in the operation of its wireless broadband networks.”

Network neutrality is a core principle that has guided the Internet since its inception. This principle enables an open Internet by making sure that companies that provide Internet access treat all content equally—regardless of source, destination or ownership.  This prevents a handful of large companies from paying wireless providers premium rates in exchange for faster speeds on their sites than others receive. Without it, consumers risk experiencing a dramatically different Internet, where large corporate sites able to pay premium costs load and operate at fast speeds while smaller newer sites struggle to function and compete with slower  speeds. 

Today’s letter is in support of the shareholder proposal at Verizon that asks the company to publicly commit to operating its wireless broadband networks in a manner consistent with network neutrality principles. Trillium issued a similar letter to AT&T shareholders last week and a letter regarding a similar shareholder proposal filed at Sprint will be issued in the coming weeks.

Trillium’s letter cites economic studies from McKinsey, New York University, University of Florida and University of Notre Dame that suggest “enormous financial benefits” created by the current open Internet governed by network neutrality. It also expresses concern that AT&T, Verizon and Sprint will “tamper with this engine of economic growth” by creating “fast lanes” on their wireless networks for those willing and able to pay a premium.

These proposals come at a time of explosive growth of wireless Internet use. A recent study by Cisco concluded that from 2011 through 2016 global mobile data traffic will increase 18 times. Mobile Internet users will outnumber traditional wireline users in the United States by 2015, according to the research firm IDC.

Trillium Vice President, Jonas Kron will address AT&T shareholders, senior management and board members at the company’s annual meeting on April 27, 2012. Verizon’s annual shareholder meeting will be held on May 3, 2012 and Sprint’s on May 15, 2012.

The scheduled votes follow a significant victory for investors. In February 2012, the Securities and Exchange Commission rejected AT&T’s, Verizon’s and Sprint’s efforts to censor their shareholders by attempting to deny shareholders their right to put these matters on the companies’ proxies.

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 Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing.  With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982.  A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.

The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions.  These views are not intended to be a forecast of future events or a guarantee of future results.  These views may not be relied upon as investment advice.  The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned.  It should not be assumed that investments in such securities have been or will be profitable.  To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients.  The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data.  This piece is for informational purposes and should not be construed as a research report.

If you have specific questions regarding Trillium’s products or services please visit our website at www.trilliuminvest.com or call us at 617-423-6655.

Producing enough food to feed the world’s rapidly growing population will require the international community to ensure the sustainable use of the world’s most critical finite resource, water.

Trillium has been engaging companies and encouraging them to develop both short term and long term strategies to significantly reduce their fresh water usage.

Jonas talked about the potential impacts that a water supply shortage could have on a company’s agricultural supply chain.

You can see the interview here.

Trillium has recently withdrawn resolutions filed with Chubb Corp. (NYSE – CB), State Street Corp. (NYSE – STT) and Halliburton Company (NYSE – HAL) after the companies committed to  make improvement in their transparency and accountability in their corporate spending on political activities.

“As long-term investors, Trillium is concerned that gaps in transparency and accountability expose companies to reputational and business risks that could threaten long-term shareholder value.  Publicly available data does not provide a complete picture of a company’s political spending,” said Shelley Alpern, Vice President of Trillium Asset Management. “We applaud Chubb, Halliburton and State Street for recognizing the risks involved in political spending, and mitigating them with stronger governance processes and greater transparency,” Ms. Alpern added.

This was the first resolution related to corporate political spending that Trillium has filed with Chubb Corporation.  Chubb has agreed to disclose direct and indirect contributions made to political candidates, committees or tax exempt organizations engaging in political activities, with names of recipients and amounts contributed, listed by category.

Similar resolutions filed with Halliburton received substantial and increasing shareholder support over the past two years, garnering 30 percent of shareholder votes in 2010 and 46 percent in 2011. “Halliburton’s policies – which were fairly restrictive to begin with — will be stated more clearly as a result of our dialogue, and its disclosures will cover any payments made to independent committees and any political spending done with its payments to trade association,” Alpern commented. “The company told us that it does not make contributions to federal or state candidates, 501c-4’s or 527 committees.”

A resolution concerning corporate political spending was filed with State Street Corp. in 2011 and received 44 percent of shareholder support. State Street made a number of significant improvements to its disclosures and policies, including prohibiting its trade organizations from using its membership dues for political contributions and activities (including contributions to 527s) and agreeing to disclose its political contributions to 527s and tax-exempt organizations.

“We are delighted that State Street has taken this prudent step which is in the best interests of the company and its investors. We worked with the company for two years on questions surrounding political spending disclosure and believe this is an important development in the financial services industry,” said Jonas Kron, Vice President of Trillium Asset Management.

“With Trillium’s help, the number of companies adopting political spending disclosure has hit 100,” said Bruce F. Freed, president of the Center for Political Accountability. “It reflects growing acceptance of the need to address the heightened risks posed by political spending.”

Contact:   Shelley Alpern, Trillium Asset Management (617) 423-6655

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Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $970 million in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.

Our company is one of the four largest coffee companies in the world. It provides industry leadership through brands such as Folgers not only in consumer expectations but also with regard to pricing.

The coffee business is critically important for our company by providing approximately 40% of our company’s revenue. It is equally important to the well-being of 25 million coffee farming families worldwide.

Climate change may present a number of important risks and opportunities for our company and these communities, as it impacts temperature, rainfall patterns, frequency of severe weather events, and disease vectors, among other effects, in the world’s coffee growing regions.

According to Kenya’s Coffee Research Foundation director of research, “We have seen climate change in intermittent rainfall patterns, extended drought and very high temperatures.” Furthermore, “Coffee operates within a very narrow temperature range of 19-25 degrees (Celsius). When you start getting temperatures above that, it affects photosynthesis and in some cases, trees wilt and dry up.” Peter Baker, CABI Bioscience coffee expert, stated, “I often call coffee a Goldilocks plant. It likes it not too hot, not too cold. It likes it not too wet, not too dry.”

Competitors in the coffee business – Nestlé, Kraft, and Sara Lee – are making public efforts to address coffee sustainability and to provide for a consistent and reliable supply chain of quality coffee. All three have made public commitments to specific goals or data disclosures—often including targets, timeframes, and investment levels– of sourcing coffee in a more sustainable fashion.

Resolved: Shareholders request that within six months of the 2012 annual meeting, the Company develop and publish, at reasonable cost and excluding proprietary and confidential information, an enhanced green coffee sustainability plan that goes beyond its 2011 plan and includes (1) quantitative goals for quantities of certified coffee purchases; (2) a method for evaluating the success of the plan in addressing the challenges of climate change to the Company and the farmers and ecosystems in its coffee supply chain.

Supporting Statement: It is the Proponents’ intention that the enhanced green coffee sustainability plan provide investors with a reasonable level of detail about our company’s plan. Our company has not provided information about how much certified coffee it will purchase in terms of percentages or absolute amounts. We are not seeking to impose a specific goal, but seek a reasonable amount of disclosure. With respect to a method for evaluating the success of the plan, we believe our company should be able to provide its shareholders with some basic evidence that its plan is beneficial to the farming communities and ecosystems from which it sources coffee. While our company’s 2011 Corporate Responsibility report mentions the 2010 impact of TechnoServe on some farmers, there has not been any effort to discuss the beneficial impacts of Smucker’s green coffee sustainability plan on the environment, communities and/or our company.

“Since Bristol Bay is one of the world’s largest sustainable salmon fisheries, it plays an important role in the supply chains of a number of our wholesale and retail members,” said Erik Lieberman, FMI’s Regulatory Counsel, in a letter to the EPA.

“Investors representing $170 billion in assets have expressed similar support to the EPA and we are delighted to see an industry association as important as FMI speak up as well,”  said Jonas Kron, Vice President of Trillium Asset Management, in a recent press release.