Investors have filed 28 proposals on social responsibility and sustainability issues in 2006, according to information released by the Shareholder Association for Research and Education (SHARE).

This is up slightly from 25 similar resolutions in 2005. However, the small increase in actual proposals is not reflective of the total corporate engagement activity on social and environmental issues this year. Socially responsible investors, pension funds and religious institutions have been ramping up their corporate engagement activity in recent years, and this is expected to continue in 2006. The Ethical Funds Company, for example, holds discussions with companies on a much larger set of issues than those reflected only in its shareholder filings. See: http://www.ethicalfunds.com/do_the_right_thing/about_ef/newsroom/2005_articles/12_01_05b.asp

One of the main themes in this year's list of shareholder proposals is the rights of local communities in development projects around the globe.

Alcan targeted

Alcan is one of the companies targeted for shareholder action on this issue.  The Ethical Funds Company has filed a resolution with Alcan calling for an improved policy of stakeholder engagement.  In its resolution, The Ethical Funds Company cites community opposition to the company's Utkal project in India, a large new bauxite development.

The Missionary Oblates of Mary Immaculate has also filed a seperate proposal with Alcan on the Utkal project.  Some local groups in India have opposed the project for a number of years and public protests have been marked by police violence.  As part of its recently-announced Share Power campaign, Amnesty Canada is urging its members who hold shares in Alcan to support the resolutions and to write to mutual fund companies holding Alcan shares to support the proposals.

On another Alcan issue, Inhance Investment Management (formerly Real Assets) is asking the company to report on improvements to its HIV/AIDS policies.

Other companies have also been targeted for action on development issues. The Ethical Funds Company is filing resolutions with Encana on stakeholder engagement, citing local opposition to an oil pipeline development in Ecuador.

Similarly, Inhance Investment Management has filed a resolution with Enbridge Inc. concerning the OCENSA pipeline, a development in Columbia that has been associated with the use of paramilitary forces. The Ethical Funds Company has also filed a resolution with Enbridge on First Nations Lands issues.

As well, les Soeurs de Sainte-Anne du Quebec has filed a resolution with Barrick Gold Corp., calling on the company to report on local effects of the Pascua-Lama project, a proposed gold mine straddling the Andes mountains near Argentina--a plan opposed by environmental groups concerned about water supplies.  Batirente, a Quebec pension management company, has also filed a proposal with Barrick calling on the company to endorse and implement the Extractive Industries Transparency Initiative, a set of principles to ensure that revenues from extractive industries contribute to sustainable development and poverty reduction.

The Ethical Funds Company  has also filed two resolutions with Power Corp. and Nortel Networks on the companies' human rights policies in China.

Climate change, environment major issues

Similar to last year, climate change and other environmental issues also feature prominently as a theme in this year's shareholder proposals.

After discussions with the Royal Bank, The Ethical Funds Company withdrew a resolution calling on the bank to disclose its financial risks associated with climate change.  The Ethical Funds Company is going ahead with a similar resolution with Toronto Dominion Bank.  Inhance Investment Management has filed a similar resolution with Toronto Dominion calling on the bank to disclose plans to reduce climate change risks.

The Ethical Funds Company has also filed a number of resolutions linking sustainable development with aboriginal rights, particularly in regard to logging and other resource operations.   These resolutions were filed with Toronto Dominion Bank, Encana and Royal Bank, but the Royal Bank resolution was withdrawn.

Inhance has launched into a new area with a resolution targeted at Shoppers Drug Mart, calling on the company to report on the costs and benefits of selling tobacco.

The Ethical Funds Company has filed a resolution with Loblaw Companies calling for a report on the use and labeling of genetically modified ingredients.  As well, The Ethical Funds Company has filed a proposal with Canadian National Railway calling on the company to report on its track safety policies.

The list of social and environmental resolutions does not include so-called "crossover" proposals, which fall into a gray area of social responsibility, sustainability and governance-related issues.

Such resolutions include a proposal by shareholder rights advocate Robert Verdun to disqualify candidates for board election for unethical behaviour and various proposals on executive compensation.

For more information, visit http://www.share.ca/en/node/702.

See also Shareholder Proposals in 2005 at http://www.socialinvestment.ca/News&Archives/news-305-ShareholderProposals.htm.

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