NOTE: PCAIR does not officially endorse voting for, against, or abstaining from any of these resolutions.  We display them here simply to give some examples of resolutions that arose in companies which Princeton University owned in the recent past.  We do believe that investors should research and thoughtfully consider these issues before deciding on how to vote.  For a (mostly) complete list of social issues proxy proposals from recent years, see the ICCR website, accessible from our links section. To view the full proxy statement and management's response to each proposal, click on the links provided.

company, year Princeton owned them, and brief description of the resolution(s): 

McDonalds (2003):Report on McDonalds' animal welfare standards

Tyco (2004):Report on how the company plans to respond to pressure to reduce the emission of toxic chemicals

General Electric (2004): Report on the company's expenditures relating to the environmental consequences of PCBs released by the company

General Electric (2003): Adoption of ILO workplace code of conduct

TJX (2004): Report on vendor's compliance with company's Vendor Code of Conduct

Pfizer (2004): 1) Reporting on Political Contributions; 2) Reporting on the effects of HIV/AIDS

Princeton voted as management recommended on all of these proposals - that means they voted AGAINST all of them except the Tyco proposal (and we are still waiting to hear how Princeton voted its shares of TJX).

text of the resolutions and supporting statements (when available)

McDonalds (2003):

http://www.sec.gov/Archives/edgar/data/63908/000104746903012417/a2107372zdef14a.htm#03CHI1697_1

        RESOLVED:    Shareholders request that the Board of Directors issue a report to shareholders by October 2003, prepared at reasonable cost and omitting proprietary information, reviewing McDonald's animal welfare standards with the view to adopting and enforcing consistent animal welfare standards internationally.

Princeton voted AGAINST this proposal, as management recommended

Tyco (2004):

http://www.sec.gov/Archives/edgar/data/833444/000104746904001979/a2127233zdef14a.htm

Whereas:

Disclosure of key information is a fundamental principle of our capital markets. Investors, their confidence in corporate bookkeeping shaken, are starting to scrutinize other possible "off-balance sheet" liabilities, such as risks associated with activities harmful to human health and the environment.

The Sarbanes-Oxley Act requires the corporate CEO and CFO to establish a system of disclosure controls and procedures designed to ensure that financial information required to be disclosed in SEC filings is recorded and reported in a timely manner.

SEC reporting requirements also include disclosure of environmental liabilities. Environmental reporting provides non-financial information that can contribute to long-term shareholder value. The Dow Jones Sustainability Index World, which tracks the performance of companies whose practices are considered environmentally and socially sustainable, outperformed the Dow Jones Global Index from 1994 to June 2003.

We believe environmental reporting, based on rigorous environmental management systems, can warn of trouble spots and signal cost-saving opportunities to management and shareholders. Analyses of toxic releases and other relevant information allow companies and shareholders to assess environmental performance, potential regulatory actions, and reputational risk associated with business activities.

Companies increasingly recognize that transparency about performance, priorities, and future sustainability plans are key to business success. For example, Ford Motor Company reports in its 2002 Citizenship Report: "Our ability to integrate corporate citizenship into our daily business is… critical not only to our reputation but also to our commercial success."

According to the U.S. Environmental Protection Agency (EPA) Toxic Release Inventory, Tyco Corporation production processes release lead and lead compounds into the environment. Exposure to lead in children and fetuses can result in brain damage, slow growth, hyperactivity, and learning and behavioral problems. In adults, exposure can cause spontaneous abortions in women, decreased sperm count in men, kidney damage, high blood pressure and memory and concentration problems.

Production and disposal of some of the company's plastics products cause the release of dioxin. Dioxin is an extremely toxic substance that, according to the National Institutes of Health, is linked to cancer, reproductive problems, increased blood pressure, and diabetes. The EPA has said that the U.S. population already has bodily dioxin levels at or near levels that cause adverse effects in laboratory animals.

The EPA considers both lead and dioxin to be Persistent, Bioaccumulative, and Toxic (PBT) chemicals. PBTs are of particular concern because of their toxic effects and because they tend to accumulate over time in the environment and in human tissue.

Tyco Corporation does not currently disclose system-wide environmental data to shareholders; nor does it appear to have a corporate-wide environmental management system.

Resolved: That the Board of Directors report (at reasonable cost and omitting proprietary information) by October 31, 2005 how the company will respond to the rising regulatory, competitive, and public pressure to reduce the emission of toxic chemicals.

        Supporting Statement:     

 We believe the report should include:

•A description of the company's environmental management system;

•An analysis of its toxic releases from major facilities; and

Plans for reduction of toxins, particularly PBTs.

Princeton voted FOR this proposal, as management recommended

GE: (2004)

http://www.sec.gov/Archives/edgar/data/40545/000119312504033072/ddef14a.txt

"Whereas: General Electric disposed of at least 1.3 million pounds of PCBs

(polychlorinated biphenyls) into the Hudson River. GE plants in Fort Edward

and Hudson Falls, NY are also heavily contaminated with PCBs. The Environmental

Protection Agency designated 200 miles of the Hudson River as a Superfund site

in 1984. The plant sites are New York State Superfund sites. In February 1976, a

state Department of Conservation Hearing Officer, in a case against GE,

described GE's actions as 'corporate abuse' and found that the record

'overwhelmingly' demonstrated that GE violated NY State law by discharging large

quantities of PCBs into the Hudson River.

     "The federal government regulates PCBs as a known animal carcinogen and

probable human carcinogen. Additional independent evidence indicates that PCBs

may affect the immune and reproductive systems, cause endocrine disruption and

have neurological effects.

     "PCB concentrations in Upper Hudson fish, sediment and water continue to

exceed federal and state standards, creating unacceptable health and

environmental risks.

     "GE has historically engaged in extensive public relations efforts,

suggesting that 'there is no credible evidence that PCBs in the Hudson River

pose a risk to people or wildlife,' (GE spokesman Mark Behan, EPA Reports

Dangers in Eating Fish From Upper Hudson River, Associated Press, 8/4/99).

     "Despite the EPA's decision calling for the removal of PCBs from the Hudson

River, GE continues to pursue its lawsuit challenging the constitutionality of

the federal Superfund. This lawsuit places the EPA's decision and the

remediation of other Superfund sites in jeopardy.

     "EPA's cleanup of the Hudson River was to begin in 2005. The EPA has

already announced a one year delay. GE has yet to pay the EPA approximately $20

million in past costs associated with this project and has yet to agree to

perform EPA's remedy, as public health and the environmental threats persist. GE

plant sites continue to leak PCBs into the Hudson River and surrounding

communities.

     "Resolved: Shareholders request the Board of Directors to report by August

1, 2004, at reasonable cost and excluding confidential information, its annual

expenditures by category and specific site (where applicable) for each year from

1990-2003, on attorney's fees, expert fees, lobbying, and public relations/media

expenses, relating in any way to the health and environmental consequences of

PCB exposures, GE's remediation of sites contaminated by PCBs, and/or hazardous

substance laws and regulations, as well as expenditures on actual remediation of

PCB contaminated sites.

     "Statement of Support: This resolution has been sponsored by dozens of

religious, public and private pension funds. While plans to clean-up the Hudson

River are under way, it is long overdue that our company discloses to

shareholders the actual costs of its long term resistance to the remediation of

this and other toxic sites. Shareholders have the right to this transparency."

Princeton voted AGAINST this proposal, as management recommended

General Electric (2003)

http://www.sec.gov/Archives/edgar/data/40545/000095013003001963/ddef14a.htm

The IUE-CWA Employee’s Pension Plan, 1275 K Street, N.W., Suite 600, Washington, D.C. 20005-4064, and other filers have notified us that they intend to submit the following proposal at this year’s meeting: “General Electric is one of the world’s most transnational corporations and its international operations and sourcing arrangements expose the company to a variety of risks. GE operates or has business relationships in a number of countries, including China, Mexico, Malaysia, and Saudi Arabia where, according to sources such as the U.S. State Department, Amnesty International, and Human Rights Watch, human rights, including internationally recognized labor rights, are not adequately protected by law and/or public policy. This proposal is designed, therefore, to manage the risk of being a party to human rights violations in the workplace.

“The success of many GE businesses depends on consumer and governmental good will. Since brand name is one of the Company’s most significant assets, the Company would benefit from adopting and enforcing a code of conduct that would ensure that it is not associated with human rights violations in the workplace. This proposal would protect the company’s brand name and/or its relationship with its customers and the numerous governments under which the company operates and with which it does business.

“In light of recent corporate scandals and abuses, institutional investors are increasingly concerned with the impact of company workplace practices on shareholder value. At least eighteen of the world’s largest pension funds and institutional investors have adopted responsible contractor and workplace practice guidelines. The adoption of such a code of conduct would increase attractiveness to the institutional investor community.

“Resolved: The shareholders urge the Board of Directors to adopt, implement, and enforce the workplace code of conduct as based on the International Labor Organization’s (ILO) Conventions on workplace human rights, and including the following principles:

1.    All workers have the right to form and join trade unions and to bargain collectively. (ILO Convention 87 and 98)

2.    Workers representatives shall not be the subject of discrimination and shall have access to all workplaces necessary to enable them to carry out their representation functions. (ILO Convention 135)

3.    There shall be no discrimination or intimidation in employment. GE shall provide equality of opportunity and treatment regardless of race, color, sex, religion, political opinion, age, nationality, social origin or other distinguishing characteristics. (ILO Convention 100 and 111)

4.    Employment shall be freely chosen. There shall be no use of force, including bonded or voluntary prison labor. (ILO Convention 29 and 105)

5.    There shall be no use of child labor. (ILO Convention 138)

“The shareholders urge the Board of Directors to issue an annual report on the status of Company’s adoption, implementation and enforcement of the above-stated code.”
 

Princeton voted AGAINST this proposal, as management recommended

TJX (2004)

http://www.sec.gov/Archives/edgar/data/109198/000095013504001967/b49277dfdef14a.htm

Proponents’ Proposal and Statement in Support. “Whereas:

      Consumers and shareholders continue to be seriously concerned about abusive working conditions and poverty level wages in facilities where products they buy are produced or assembled. Potential reports of suppliers exploiting workers poses a risk to our company’s reputation and may generate a consumer backlash.

      Nike, Levi Strauss, and J.C. Penny, among others have been effected in the past by shortcomings of their self-monitoring systems. Public concern expressed to companies such as the Gap and Kohl’s has prompted these businesses and many others to establish expansive monitoring systems of vendor facilities to assure stakeholders that they are working hard to eliminate sweatshop conditions. For example, the Gap has participated in an independent monitoring process in El Salvador with respected human rights and labor rights institutions for over five years. Numerous companies now have Codes of Conduct augmented by clear independent monitoring systems.

      Our company purchases an increasing volume of goods produced in countries like China where human rights abuses and unfair labor practices have been well documented. (U.S. State Department’s “China Country Report on Human Rights Practices — 2000”)

      Although TJX does have an Import Compliance Program and Vendor Code of Conduct, investors have little information on whether it is adequately implemented and monitored. We believe TJX should publicly demonstrate how it enforces its standards and illustrate its use of independent monitoring, as well as detail any partnerships with respected and independent human rights and labor groups.

      TJX has made many positive changes to its Import Compliance Program in the last two years. Changes include the publication of the Vendor Code of Conduct on the company website, working with a consultant to conduct audits and including the TJX Code on purchase orders. However, to be credible, we believe the process of monitoring and verification must be more transparent.

      Companies such as Kohl’s, Nike, Aeon, Hennes & Mauritz and Inditex have issued public reports which address supplier standards and monitoring mechanisms. Given that 10 percent of TJX’s business is private label, we believe our company should also be working towards best practices in this segment.

      Resolved:

      The shareholders request that the board of directors conduct a thorough review and assessment of TJX’s Vendor Compliance Program and the implementation of its Vendor Code of Conduct and prepare a report, available to investors by December 2004, produced at reasonable expense and omitting proprietary information, that details the board’s findings and any recommendations.

      Supporting statement:

      We recommend that the report include descriptions of:

•  Description of the private label sourcing system.

•  Monitoring systems for private label products, including consulting relationships and percent of facilities currently monitored.

•  Summary findings and responses by TJX regarding non-compliance in facilities.

•  Assessment of policies relating to name brand sourcing.

•  Long term goals and challenges relating to product sourcing and human rights.

      We believe this request for a report from TJX on this important issue is in the company’s and shareholder’s best interest.”

Pfizer (2004)

http://www.sec.gov/Archives/edgar/data/78003/000093041304001109/c30553_sc14a.htm

1) Political Contributions Report Resolution:

Whereas:

The pharmaceutical industry, and Pfizer in particular, spend significant financial and other resources to support political candidates and political entities.

Between January 1, 1991 and December 31, 2002 the Pharmaceutical Research and Manufacturers Association and its members gave $57.9 million in political contributions, including more than $35.5 million in soft money donations to the national political parties and more than $22.4 million in Political Action Committee (PAC) donations to federal candidates. Pfizer led this list, contributing more than $6.7 million. (Follow the Dollar Report, July 1, 2003, Common Cause)

Pfizer donated $1.8 million in 2002 in soft money and Political Action Committee funds, an increase of 600% from 1992. (Pharmaceutical Manufacturing: Long-Term Contribution Trends, The Center for Responsive Politics, 2003).

Pfizer donated $100,000 in soft money and Political Action Committee funds at a single gala dinner headlined by President George W. Bush in June of 2002. (Lobbies Force a Bitter Pill, Vikki Kratz, Newsday, pg. B4, 4 August 2002).

Whereas:

These political contributions are made with dollars that belong to the shareholders as a group and they are entitled to know how their funds are being spent.

Although there are various disclosure requirements for political contributions they are difficult for shareholders to access and they are not complete. For example, corporate soft money contributions are currently legal in 49 states, but the disclosure standards can vary. Also, while corporations are not allowed to make direct contributions to candidates, they are allowed to fund the administrative support for PACs to which employees make contributions. Corporations can also make unlimited contributions to “Section 527” organizations political committees formed for the purpose of influencing elections, but not supporting or opposing specific candidates. These do not have to be reported.

Whereas:

Our company should be using its resources to win in the marketplace through superior products and services to its customers, not because it has superior access to political leaders. Political power can change, leaving companies relying on this strategy vulnerable. In addition public backlash can harm a company’s reputation and, as a result, its longer term business prospects.

Resolved:

Shareholders request that the Board of Directors adopt a policy to report annually to shareholders in a separate report on corporate resources devoted to supporting political entities or candidates on both state and federal levels. We suggest that the requested comprehensive report set forth and quantify, specifically and not in aggregate, company resources devoted to supporting political entities and candidates, to supporting third-party organizations which engage in political activity including section 527 organizations, and related expenditures of money and other resources.

Princeton voted AGAINST this proposal, as management recommended

--------------

2) Economic Effects of HIV/AIDS Resolution:

Investors have an interest in how our company balances long-term issues with shorter-term performance;

One long-term factor relevant to our company is the public health crisis confronting emerging markets and its implications for the future sustainability of our company’s sector’s current business model;

There are more than 42 million people worldwide currently living with HIV/AIDS, over 95% of whom live in the developing world;

Effective treatments for HIV/AIDS exist, but only 4% of those who need treatment have access to it;

According to UNAIDS, the HIV/AIDS pandemic is “creating or aggravating poverty among millions of people, eroding human capital, weakening government institutions and threatening business activities and investment”;

MALARIA kills between one and two million people each year and 300-500 million new cases occur every year;

Malaria is often treated in developing countries with drugs that are no longer effective, and people with resistant malaria cannot access the treatment that could save their lives;

In a report for the UN Conference on Financing for Development, UNAIDS states: “Increasing illness and death of large numbers of productive members of society will reduce overall production and consumption”;

The highly touted agreement at the World Trade Organization related to easing access to essential medicines in developing countries has several riders. They place new regulatory burdens and additional uncertainty on countries and companies importing and exporting generic essential medicines.

In an analysis of how the world’s eleven largest pharmaceutical companies (by market capitalization) are managing the investment risks arising from the major issues surrounding the acute health problems of developing countries, our company received a score of 40% with the highest rating greater than 80%. Core Ratings’ analysis stated that “Pfizer is involved in a number of joint public-private partnerships in treating trachoma and AIDS-related infections but its formal policies on the issues covered in this report [e.g., the burden of disease in developing countries and access to essential medicines] are weak and the company discloses little on implementation.” (Philanthropy or Good Business? Emerging Market Issues for the Global Pharmaceutical Industry, Core Ratings, May 2003).

The World Bank reports that in southern Africa and other affected regions “a complete economic collapse will occur” unless there is a response to the HIV/AIDS pandemic. Even “a delay in responding to the outbreak of the epidemic, however, can lead to collapse.” (The Long-run Economic Costs of AIDS, June 2003, The World Bank).

RESOLVED: Shareholders request that our Board review the economic effects of the HIV/AIDS, tuberculosis and malaria pandemics on the company’s business strategy, and its initiatives to date, and report to shareholders within six (6) months following the 2004 annual meeting. This report developed at reasonable costs and omitting proprietary information, will identify the impacts of these pandemics on the company.

Supporting Statement:

Investors want to feel confident that our board has fully considered the risks and opportunities our company faces in relation to the public health crisis in emerging markets, and has effective policies and processes in place for dealing with the challenges.

Princeton voted AGAINST this proposal, as management recommended