Saturday, May 2, 2009

Ethical files human rights proposal with Power Corp.

Ethical Funds says Power Corporation of Canada needs to improve disclosure on how the financial holding company is dealing with human rights abuses in countries where it has operations.

Subsequently, Ethical has filed a shareholder proposal asking Power to strengthen its Corporate Social Responsibility statement to describe how it evaluates investments, as well as its commitment to the Universal Declaration of Human Rights.

Power is perhaps best known for its financial subsidiaries, which include IGM Financial, Great-West Lifeco, Mackenzie Financial and London Life. All four companies offer SRI mutual funds.

However, Power also controls Pargesa Holding S.A. and ultimately Groupe Bruxelles Lambert (GBL), which has significant holdings in energy giant Total S.A. Total has operations in Burma and Sudan. In addition, Power has been approved by China’s securities regulator to invest in Yuan-denominates securities, Ethical notes.

“From the current disclosure, Power investors are unable to identify how the company is implementing its Corporate Social Responsibility statement,” Ethical says. “Consequently, investors are unable to determine if the company is effectively working to mitigate the risks of complicity with human rights abuses. Disclosure of Total’s policies in the appendix of Power’s proxy circular does not constitute adequate disclosure, nor do those policies effectively mitigate the risks from exposure to the deteriorating human rights situations in Burma and Sudan.”

“Shareholders require improved disclosure from Power in order to understand how the company is working to mitigate risks related to human rights abuses,” Ethical adds. “This resolution is simply asking for better disclosure on the implementation of the Corporate Social Responsibility statement.”

Power’s AGM is scheduled for May 13.

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