Demanding Justice: How An Indian Court Took on Dow Chemical – And Won

There’s a great new blog – Demanding Justice: How An Indian Court Took on a U.S. Chemical Giant – And Won – on the Amnesty International USA website.  It’s under my byline but I did not write it.

James Mutti wrote the piece.  He’s the India Country Specialist for Amnesty International USA.  All I did was some minor editing, principally making the opening sentence a bit crisper and more likely to grab the reader’s attention.  Natalie Butz – an awesome staff communications assistant – added the pictures.

It’s under my byline because I’m a trained and accredited blogger for Amnesty International USA and Jame Mutti is not.  But I did make a point of crediting James for his work on the piece.

I will be posting pieces on this blog that I write – or appear under my byline – on other blogs and publications.  Please read this piece.  It’s great to hear some good news about corporate accountability for a change.  I’m astounded that the post has already been “liked” by over 1,100 people on Facebook!


So What Have Shareholder Activists Ever Done For Us?

Props to Dan Jubelirer, a climate change student activist for through “Tufts Divest For Our Future,” for posing the following question to me after reading my last blog.  Dan asks:

“What specific climate victories have been won through active shareholder engagement, beyond measures asking companies to report GHG emissions? Since we know fossil fuel companies have way more oil, coal, and gas in their reserves than they can burn, the only way we can avoid catastrophic warming is to make sure the largest FF companies keep about 3/5ths of their reserves underground.  Is it realistic to think that a shareholder resolution could pass asking, say, Exxon to leave a majority of their oil reserves underground, or to have them cease all new exploration for fossil fuels?”

This is an excellent question.  The shareholder demand of the fossil fuel companies is indeed a very high one. The ask is for the companies to value their reserves accurately by writing down the booked value of their unburnable reserves. More importantly, it is to stop investing capital in developing further unburnable reserves and instead invest that money in renewables and/or, more realistically, return the cash to shareholders in the form of higher dividends.

Those are very high – but logical – demands for shareholders to make of fossil fuel companies.  Of course, the higher the demand, the more pressure required to force it.  It will take time and organizing to build that pressure. However, what will reduce that pressure is if shareholders, who currently take action on climate change, instead divest and sell their stock to investors who don’t care about climate change.

The fact is that – up till now – those investors that have taken action on climate change have done so with a good combination of both divestment and shareholder advocacy. Socially responsible investors have traditionally limited their investment in fossil fuel companies that in effect constitutes partial divestment.  At the same time, social investors have used shareholder advocacy with those companies in which they have maintained a holding.

Both public divestment and shareholder advocacy have fueled the political action to achieve a price on carbon.  For instance, using shareholder resolutions at ExxonMobil, investors have helped successfully press the company to stop funding climate denial groups and even publicly advocate for a carbon tax.

Noted progressive pundit, David Sirota illustrated this very well in his book “The Uprising: An Unauthorized Tour of the Populist Revolt Scaring Wall Street and Washington.”  In the chapter “Blue Chip Revolutionaries,” Sirota recounts his trip to the 2007 annual shareholder meeting of ExxonMobil in the company of shareholder activists, including the noted Sister Pat Daly.  I can’t recommend the book highly enough for Sirota’s incisive assessment of the impact of shareholder advocacy.  (So buy it!)

Sirota concludes:

“[T]he enormous size that makes multinational companies like ExxonMobil seem so immovable is precisely why these seemingly minute victories are actually huge.  If you get a giant corporation with global reach to change even a tiny bit, you have made a global impact.  If, like these activists did today, you force the company that has produced 5 percent of all the human-created carbon emissions in history to even vaguely acknowledge that global warming is occurring, you have potentially started changing the planet.”

Since that 2007 annual shareholder meeting, ExxonMobil has significantly cut back on its donations to climate change denial groups and even come out publicly in favor of a carbon tax.   These small but very significant changes are due in principal part because shareholders have organized pressure on the company through direct dialogue with the company, filing and campaigning for shareholder resolutions, and intervening publicly at ExxonMobil’s annual shareholder meetings.

I strongly argue that, for investors doing active shareholder advocacy, it makes more strategic sense for them to hold onto their shares.  Isn’t that better than if they divest their stock and throw away their leverage?

In my next piece, I will explain why – for strategic reasons – I strongly support Dan Jubelirer and “Tufts Divest For Our Future” in their campaign to press Tufts University to divest its fossil fuel stocks.

The Case for Shareholder Advocacy on Climate Change


The Interfaith Center on Corporate Responsibility (ICCR) has just published an excellent report on how investors can respond to the call for stock divestment of fossil fuel companies by  Most significantly, ICCR makes the case for more stepped-up shareholder advocacy rather than just stock divestment.

This recommendation for stepped-up shareholder advocacy deserves respect.  It comes from a coalition of investors that has for decades been in the forefront of efforts to use shareholder power to curb climate change.  It should not be countered with the glib assertion – by supporters of stock divestment only – that “shareholder engagement has been tried and has not worked.”

Disclosure: I serve on the Committee on Socially Responsible Investment of the Unitarian Universalist Association, a member of ICCR.  I have also actively participated in discussion at the ICCR on how investors should respond to Bill McKibben’s call for stock divestment of fossil fuel companies. Some of my expressed views are in the report.

For me this is the report’s key quote:

The ICCR model of active ownership maintains that shareholders have an obligation to use their voices to positively influence corporate decision-making. Even if this voice is only used to vote their proxies in favor of others’ resolutions, for the purposes of engagement, shareholder advocates may choose to hold problematic companies in their portfolios in order to retain a “seat at the table”. To divest is to relinquish those shares to another owner who may not be practicing active ownership. This approach, in effect, serves to strengthen management control. ICCR members advocate for amplifying our collective voice by bringing more shareholder advocates to the table – that is, we support engagement.

It is not true to say that shareholder engagement of fossil fuel companies has been tried and has failed.  The fact is that shareholders have tried a combination of both divestment and shareholder advocacy.  For instance, socially responsible investors have largely divested from or avoided investing in most fossil fuel companies.  At the same time, where social investors have held stock in those companies, many have used their shareholder clout to press those corporations to address climate change.  It is that combination of divestment AND advocacy that has only marginal impact on the fossil fuel companies thus far.  However, for social investors to abandon shareholder advocacy entirely – as Bill McKibben advocates – and to divest from all fossil fuel company stocks would be to throw away one of the more effective tools in the investor toolbox.

Anxious to remove the pressure, corporate executives have often told shareholder advocates to just divest and go away.  Why give the fossil fuel companies a victory?