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June 2003

    Shareholder Action Update


    Responsible Water Use.

    The Real Assets resolution with Pepsi received an 8% vote in favour, which is more than twice the required level to re-file the resolution next year. Ironically, just two weeks after this vote on water scarcity issues, the company faced the potential loss of one of its bottling plants in India. The New York Times reported that the village government of Pudussery, in southwestern India, revoked Pepsi’s water use permit over concerns that it was over pumping the local aquifer. Well. “We told you so, Pepsi!” The company, which had originally tried to block this resolution at the Securities and Exchange Commission level, (unsuccessfully) now seems to be a little more interested in talking about a problem that clearly is not going away anytime soon. Of course we would rather see action, but it’s a start. But world water use problems are much larger than just the possible abuses by the Cola kings. They were a convenient focus for the initial campaign, which will try to broaden its focus over the next year.

    Responsible Banking:

    10 of the world’s leading banks, including Citigroup, Barclays, ABN Amro and Credit Suisse, have agreed to adopt the “Equator Principles” to adhere to strict environmental and social impact standards when financing dams, power plants, pipelines and similar infrastructure projects worldwide. This has come out of mounting pressure from protest groups as well as an ongoing dialogue with, among others, Friends of the Earth, Trillium Asset Management, Christian Brothers Investment Services, Ethical Funds and Real Assets, which has been underway since late 1999. Adherence is voluntary and many think that the agreement does not go nearly far enough, but clearly a good first step in raising the bar for all banks when considering projects like the Three Gorges dam. 

    Fair Trade Coffee:

    The Oxfam led resolution has been filed with Procter and Gamble, asking them to do more to help small coffee growers through Fair Trade sourcing and other initiatives to address the current coffee crisis brought on by oversupply and prices well below the cost of production for small farmers around the world. There is an ongoing dialogue with P&G on this issue. To date there has been no firm consensus established among the diverse participants. Stay tuned and demand fair trade for your morning coffee!

    Next issue I will present a scorecard on this year’s corporate engagement campaigns in the areas of Human Rights, Responsible Finance, Climate Change and Water Use. Lots of small victories, but they will all be back again for next year. Later in the summer I’ll report on a couple of new focus areas that will be added to the list.

    Perry Abbey is an investment advisor at United Capital Securities Inc., a Working Enterprises company. Helping individuals and organizations harmonize their money with their values and leverage capital for change.  pabbey@unitedcap.com

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