This Week in ESG and Impact Investing

On July 27th, the SEC posted two Shareholder Access proposals. Commenters have 60 days to reply: Shareholder Proposals Relating to the Election of Directors. No.: IC-27914. File No.: S7-17-07. Comments Due: Comments should be received 60 days after Federal Register publication.--> Submit comments on S7-17-07 Shareholder Proposals. Release No.: IC-27913. File No.: S7-16-07. Comments Due: Comments should be received 60 days after Federal Register publication.--> Submit comments on S7-16-07

As we indicated they would, the SEC put forward a proposal that would eliminate or severely restrict shareholder access to the corporate proxy statement. The Agency also put forward a proposal to expand shareholder access to the proxy. We believe trepidation about the leak of the restrictive proxy access proposal ( SEC Proxy-Access Proposal Draws Fire from Investors. The Wall Street Journal. By JUDITH BURNS. July 11, 2007; Page D2 ) led to concerns about a possible due process lawsuit. In an inspired move, the Agency decided to simultaneously release a second, less restrictive proposal. This action negates concerns about the early and selective distribution of proposed public policies only to moneyed interest groups and simultaneously provides a way to optimize shareholder access and proxy policy.

On July 20, 2007 , " SEC Chairman Christopher Cox issued the following statement concerning disclosures filed with the Commission concerning public company activities in countries that the U.S. Secretary of State has determined to have repeatedly supported terrorism: Since the SEC added to our Internet site a web tool that permits investors to obtain information directly from company disclosure documents about their business interests in countries the U.S. Secretary of State has designated 'State Sponsors of Terrorism,' the site has experienced exceptional traffic. Between June 25, when the web tool was unveiled, through July 16, visitors have 'hit' material posted on the site well over 150,000 times. Iran was the country most frequently clicked on, followed by Cuba, Sudan, North Korea, and Syria. Those who went to a country list most often clicked through to the text of companies' own disclosure (in the case of Iran, they did so overwhelmingly), indicating...

The SEC has announced it will soon issue revised rules governing the conditions under which shareholders have the right to file resolutions. This follows a recent set of discussions, including a Roundtable on Proposals of Shareholders held at SEC HQ on May 25 th . We believe the SEC will limit shareholder rights. We do not believe they will eliminate shareholder access to the proxy outright. Rather, we expect the Commission to impose a number of rules that virtually eliminate shareholders’ ability to file resolutions. These may include a 5% ownership rule or unreasonably restrictive time limits governing the filing of resolutions. We believe the SEC will offer shareholders improved communications and access to corporate management via on-line tools, like bulletin boards or “chat rooms.” Having done so, they will claim to have improved shareholder access. Unless , as we suggested earlier , these boards or chat rooms reside on SEC servers, they will be wrong. We base our opinion on se...

On June 22, 2007, Goldman Sachs launched the GS Sustain Focus List , “companies from established industries, which have been selected by incorporating our proprietary Environmental, Social and Governance (ESG) framework into long-run industry drivers and returns-based analysis and valuation in order to pinpoint structural improvement and sustainable competitive positioning.” The list of stocks is "aimed at long term long only performance with low turnover.." The creation of the focus list and the required methodology suggest that Goldman, like other firms, has come to see the value of incorporating a “socially responsible” framework into traditional investment analysis. While we applaud Goldman's incorporation of the ten principles of the UN Global Compact into an investment analysis framework and the firms’ tacit recognition of “socially responsible” investing, we feel the firm is ethically and ethnically challenged, and that these factors may negatively influence both t...

Social Investments Forum will be held in Vladivostok According to the Vladivostok Times , "The goal of the Forum is to promote the idea of social investments through creation of partnerships among local/regional authorities, businesses and non-commercial organizations (NGOs) for successful Territory"s socio-economic development. The New Eurasia Foundation Russian Far East Affiliate Office, in partnership with the Primorsky Territory Administration will hold SOCIAL INVESTMENTS FORUM IN THE RUSSIAN FAR EAST on July 27, 2007 in the framework of the first Pacific Economic Congress "Russia and Asia-Pacific - from cooperation to integration." St. John’s Endowment Investments Outperform Those of a Majority of Higher Education Institution According to St. John's University , "A recently released NACUBO study indicates that St. John’s surpassed 90 percent of 700-plus colleges and universities in average annual rate of return on investments in the three-year period...