Meritas Mutual Funds, assisted by the Shareholder Association for Research and Education (SHARE), has withdrawn “say on pay” shareholder resolutions at Enbridge, EnCana and Suncor.
The three companies have agreed to establish an advisory vote on executive compensation, starting in 2011.
"Offering our shareholders a "say on pay" reflects Enbridge's commitment to shareholder engagement and to continuously improving our governance practices in view of emerging trends and best practices," said David Arledge, chair of the board of Enbridge Inc., in a statement.
EnCana’s board has approved a plan to include a non-binding advisory vote by shareholders on executive compensation at its annual general meeting planned for April 2011. “This vote will give EnCana shareholders an opportunity to provide feedback to the board of directors on the company’s approach to executive compensation,” the company said in a news release.
Suncor did not issue a formal public statement but a spokesman told the Calgary Herald that the company will announce a similar compensation plan next year.
Meritas filed say on pay resolutions at 12 companies last year. The Canadian Coalition for Good Governance expects as many as 35 public companies to sign up. The coalition published its say on pay policy last month.
Showing posts with label Meritas Mutual Funds. Show all posts
Showing posts with label Meritas Mutual Funds. Show all posts
Friday, February 12, 2010
Thursday, September 17, 2009
Pushing Tim Hortons on Fair Trade
Canadian coffee drinkers love Tim Hortons. Many of us make multiple trips to the nearest "Timmy's" every day. But the coffee giant has so far resisted requests to offer Fair Trade certified coffee. A number of groups are working to change that.
According to the Shareholder Association for Research and Education (SHARE), the Fair Trade program offers an alternative to the conventional coffee trade, ensuring that producers in developing countries get a fair price for their products. "This is accomplished through a set of trading, social and environmental standards whose implementation by producers or buyers is certified by an independent body," SHARE says. The standards are established by Fairtrade Labelling Organizations International (FLO), a non-profit group based in Germany.
Although Fair Trade coffee is widely available in Canada, and has been for years, it's sold mostly in smaller, independent shops. Recently, SHARE and Batirente started a dialogue with Tim Hortons to request that the company start offering Fair Trade certified coffee. Ethical Funds has announced plans to engage Tim Hortons on the same issue this year.
Tim Hortons does have a Sustainable Coffee Program, a goodwill project that aims to provide financial assistance, technical training, education and social services to a number of coffee-producing communities in Guatemala, Colombia and Brazil. That's admirable and SHARE has asked for more information on the program.
But is it enough?
SHARE, working on behalf of Meritas Mutual Funds, says it hopes to convince Tim Hortons to adopt a more forward-looking approach to coffee sourcing. "The proposed steps recognize the significance of the Fair Trade coffee market growth and the opportunities that Fair Trade presents for Tim Hortons' coffee supply management processes," says SHARE.
Average annual sales of Fair Trade coffee grew nearly 33% in Canada between 2003 and 2008. Tim Hortons has a chance to share in that growth, while at the same time helping the estimated 25 million people around the world who depend on the coffee industry to make a living.
Something to think about next time you're waiting in that long line-up for a double-double.
According to the Shareholder Association for Research and Education (SHARE), the Fair Trade program offers an alternative to the conventional coffee trade, ensuring that producers in developing countries get a fair price for their products. "This is accomplished through a set of trading, social and environmental standards whose implementation by producers or buyers is certified by an independent body," SHARE says. The standards are established by Fairtrade Labelling Organizations International (FLO), a non-profit group based in Germany.
Although Fair Trade coffee is widely available in Canada, and has been for years, it's sold mostly in smaller, independent shops. Recently, SHARE and Batirente started a dialogue with Tim Hortons to request that the company start offering Fair Trade certified coffee. Ethical Funds has announced plans to engage Tim Hortons on the same issue this year.
Tim Hortons does have a Sustainable Coffee Program, a goodwill project that aims to provide financial assistance, technical training, education and social services to a number of coffee-producing communities in Guatemala, Colombia and Brazil. That's admirable and SHARE has asked for more information on the program.
But is it enough?
SHARE, working on behalf of Meritas Mutual Funds, says it hopes to convince Tim Hortons to adopt a more forward-looking approach to coffee sourcing. "The proposed steps recognize the significance of the Fair Trade coffee market growth and the opportunities that Fair Trade presents for Tim Hortons' coffee supply management processes," says SHARE.
Average annual sales of Fair Trade coffee grew nearly 33% in Canada between 2003 and 2008. Tim Hortons has a chance to share in that growth, while at the same time helping the estimated 25 million people around the world who depend on the coffee industry to make a living.
Something to think about next time you're waiting in that long line-up for a double-double.
Tuesday, June 30, 2009
Small steps for shareholder action
Most Canadian mutual funds still strongly support management on shareholder resolutions, though there are signs of some movement away from that trend, according to a report by the Shareholder Association for Research and Education (SHARE) and Fund Votes.
For example, the second annual Proxy Voting by Canadian Mutual Funds report notes that Canadian mutual funds are more likely to oppose the election of directors put forward by corporate management than in previous years. And note the success of this year's "Say on Pay" campaign (not included in the report), which will allow shareholders of Canada's big banks an advisory vote on executive compensation starting next year.
“Canadians depend on mutual fund companies to protect their retirement savings and studies have shown repeatedly that careful proxy voting adds value and manages risk for investors,” says SHARE’s Laura O’Neill. “At this time of battered financial markets and depressed shareholder value, it is a positive sign that more funds are challenging management’s hold on the ballot.”
The report found that three mutual fund companies stood out from the crowd. “Among their peers, Inhance Asset Management, Meritas Mutual Funds, and Northwest & Ethical Funds, were significantly more likely to vote against management,” the report notes. “The three companies are known for integrating environmental, social and governance factors into their investment decisions.” Inhance, Meritas and Northwest & Ethical voted in favour of shareholder proposals on at least 40% of all ballots and each also withheld support from management on at least one in five resolutions.
However, those three companies are the exceptions. Canadian mutual funds supported management about 90% of the time. Eighteen of 21 fund families rejected more than 80% of the shareholder proposals they voted on.
And the report turned out a few anomalies of interest to SRI investors, especially those who are invested in SRI products from fund companies that are not SRI-exclusive or SRI specialists. For instance, the proxy voting records of SRI funds sold by diversified fund companies are likely to be the same. “We looked for evidence that SRI funds would report voting in favour of corporate social responsibility proposals more heavily than non-SRI funds in the same family. With notable exceptions, we found that this was not the case.”
“When you invest in a fund from an SRI family, you can count on very progressive proxy voting,” O’Neill said. “We found that in most cases, an SRI product managed within a non-SRI fund family votes in the same management-friendly way for all of its funds.”
Canadian fund companies have been required to publicly disclose their proxy voting records since 2006. The SHARE/Fund Votes report is available here.
For example, the second annual Proxy Voting by Canadian Mutual Funds report notes that Canadian mutual funds are more likely to oppose the election of directors put forward by corporate management than in previous years. And note the success of this year's "Say on Pay" campaign (not included in the report), which will allow shareholders of Canada's big banks an advisory vote on executive compensation starting next year.
“Canadians depend on mutual fund companies to protect their retirement savings and studies have shown repeatedly that careful proxy voting adds value and manages risk for investors,” says SHARE’s Laura O’Neill. “At this time of battered financial markets and depressed shareholder value, it is a positive sign that more funds are challenging management’s hold on the ballot.”
The report found that three mutual fund companies stood out from the crowd. “Among their peers, Inhance Asset Management, Meritas Mutual Funds, and Northwest & Ethical Funds, were significantly more likely to vote against management,” the report notes. “The three companies are known for integrating environmental, social and governance factors into their investment decisions.” Inhance, Meritas and Northwest & Ethical voted in favour of shareholder proposals on at least 40% of all ballots and each also withheld support from management on at least one in five resolutions.
However, those three companies are the exceptions. Canadian mutual funds supported management about 90% of the time. Eighteen of 21 fund families rejected more than 80% of the shareholder proposals they voted on.
And the report turned out a few anomalies of interest to SRI investors, especially those who are invested in SRI products from fund companies that are not SRI-exclusive or SRI specialists. For instance, the proxy voting records of SRI funds sold by diversified fund companies are likely to be the same. “We looked for evidence that SRI funds would report voting in favour of corporate social responsibility proposals more heavily than non-SRI funds in the same family. With notable exceptions, we found that this was not the case.”
“When you invest in a fund from an SRI family, you can count on very progressive proxy voting,” O’Neill said. “We found that in most cases, an SRI product managed within a non-SRI fund family votes in the same management-friendly way for all of its funds.”
Canadian fund companies have been required to publicly disclose their proxy voting records since 2006. The SHARE/Fund Votes report is available here.
Wednesday, March 18, 2009
TD Bank gets on “say on pay” bandwagon
TD Bank agreed Wednesday to allow its shareholders an advisory vote on executive compensation, starting next year.
The votes, which are non-binding, have already been accepted by the rest of Canada’s big banks, including RBC, CIBC, Scotiabank and BMO.
The resolution, brought forward by Meritas Mutual Funds and Mouvement d'éducation et de défense des actionnaires (MEDAC) was to be voted on at TD’s annual meeting on April 2, however in a pre-emptive move, the bank decided to accept the proposal and the resolution will now be withdrawn.
"TD promotes open and proactive dialogue with shareholders, ensuring their feedback on compensation and other important issues is heard and carefully considered by the board," TD chairman John Thompson said in a release Wednesday.
"It's now clear from the votes held this year at the other major Canadian banks' meetings that the opinion of the investment community, while still divided, has moved in favour of an advisory vote, and so we've acted accordingly."
Last week, TMX Group, parent of the Toronto Stock Exchange, and Sun Life Financial both said they will voluntarily offer shareholders a non-binding advisory vote on executive pay starting at their annual meeting next year. As a result, Meritas withdrew its proposal at both companies.
Just a few weeks ago, Canadian banks were carefully counting proxy votes before making the decision to adopt a non-binding pay vote, the Shareholder Association for Research and Education (SHARE, which assisted Meritas on the resolutions) noted on its website. “Now, companies are implementing a shareholder 'say on pay' well ahead of their shareholder meetings.”
Laura O’Neill, director of law and policy at SHARE, says she’s pleased with TD’s decision, but adds that “given the lockstep in which our big banks move on governance, we certainly didn’t think that TD had much choice. But we’re happy to see the announcement a full two weeks before their AGM.”
O’Neill notes that Sun Life and TMX’s acceptances of the resolution are perhaps even more significant, providing a toehold into the world of issuers who are not banks, “because that’s clearly where we want to go.”
There are still a couple of outstanding executive compensation resolutions: Potash Corporation meets May 7 and a proposal was also filed at Nortel Networks, which filed for protection from creditors in January. “I doubt very much we’ll ever see this proposal on a Nortel ballot,” O’Neill concedes.
Considering the momentum the executive compensation has generated during this proxy voting season, O’Neill says she’s very interested to see what will happen next. “We’d like to see movement by the Canadian Securities Administrators to put this in place across the board. It would be a quick, clean way to get this done.”
The votes, which are non-binding, have already been accepted by the rest of Canada’s big banks, including RBC, CIBC, Scotiabank and BMO.
The resolution, brought forward by Meritas Mutual Funds and Mouvement d'éducation et de défense des actionnaires (MEDAC) was to be voted on at TD’s annual meeting on April 2, however in a pre-emptive move, the bank decided to accept the proposal and the resolution will now be withdrawn.
"TD promotes open and proactive dialogue with shareholders, ensuring their feedback on compensation and other important issues is heard and carefully considered by the board," TD chairman John Thompson said in a release Wednesday.
"It's now clear from the votes held this year at the other major Canadian banks' meetings that the opinion of the investment community, while still divided, has moved in favour of an advisory vote, and so we've acted accordingly."
Last week, TMX Group, parent of the Toronto Stock Exchange, and Sun Life Financial both said they will voluntarily offer shareholders a non-binding advisory vote on executive pay starting at their annual meeting next year. As a result, Meritas withdrew its proposal at both companies.
Just a few weeks ago, Canadian banks were carefully counting proxy votes before making the decision to adopt a non-binding pay vote, the Shareholder Association for Research and Education (SHARE, which assisted Meritas on the resolutions) noted on its website. “Now, companies are implementing a shareholder 'say on pay' well ahead of their shareholder meetings.”
Laura O’Neill, director of law and policy at SHARE, says she’s pleased with TD’s decision, but adds that “given the lockstep in which our big banks move on governance, we certainly didn’t think that TD had much choice. But we’re happy to see the announcement a full two weeks before their AGM.”
O’Neill notes that Sun Life and TMX’s acceptances of the resolution are perhaps even more significant, providing a toehold into the world of issuers who are not banks, “because that’s clearly where we want to go.”
There are still a couple of outstanding executive compensation resolutions: Potash Corporation meets May 7 and a proposal was also filed at Nortel Networks, which filed for protection from creditors in January. “I doubt very much we’ll ever see this proposal on a Nortel ballot,” O’Neill concedes.
Considering the momentum the executive compensation has generated during this proxy voting season, O’Neill says she’s very interested to see what will happen next. “We’d like to see movement by the Canadian Securities Administrators to put this in place across the board. It would be a quick, clean way to get this done.”
Monday, February 9, 2009
Canadian SRI funds closely monitoring Barrick
The Norwegian government’s decision to expel Barrick Gold from its state pension plan for environmental reasons has sparked renewed debate over whether Canadian SRI mutual funds should continue to invest in the controversial mining company.
Barrick is a top ten holding in four Canadian SRI funds: Ethical Balanced, Ethical Stock, Ethical Index and Acuity Social Values Canadian Equity.
Bob Walker, vice president, sustainability, at Ethical Funds notes that the Norwegian pension fund uses divestment as a tool to express dissatisfaction with a company’s performance, instead of engagement, which is Ethical’s preferred approach.
Walker notes that Ethical has been talking with Barrick since 2005 and has made progress in a number of areas. For instance, Barrick has established a human rights policy, joined the UN Global Compact on corporate responsibility, hired a chief medical officer to deal with HIV/AIDS and has extended the availability of antiretroviral drugs to employees and their families.
The company also established community engagement guidelines that Walker says could have improved Barrick’s performance in a number of controversial mining projects around the world. However: “In the last two years, that hasn’t happened, the controversies are continuing.”
Ethical sent two analysts to Nevada last year to tour Barrick’s mines and meet with the Western Shoshone community. Subsequently, Ethical recommended that Barrick consider conducting a human rights impact assessment of that project, an idea rejected by Barrick.
Ethical is now in the process of drafting a shareholder proposal for Barrick’s 2009 annual general meeting in an effort to get the company to improve its human rights and environmental performance, Walker says.
So what would it take for Ethical to divest in Barrick?
“We have fairly clear rules on that,” Walker says. “We make three concerted efforts at engaging a company on any given issue and if they fail to respond with sound arguments on those three occasions then we will divest.”
The rejection of [establishing a human rights impact assessment in Nevada] would represent the first strike, Walker says. But there’s still the shareholder proposal and an upcoming meeting with Barrick’s new CEO to consider. “We’ll see how things go from there. We are pretty patient around these issues and we believe that corporate change takes time.”
Over at Acuity, Social Values Funds manager Martin Grosskopf points out that for a Canadian equity fund benchmarked to the TSX, the gold sector is impossible to ignore.
Still, he concedes that Barrick, like most companies in that sector, does not come without controversy. “The reality is that all of the gold mining companies have significant issues and Barrick has had many of these issues for years, but it still ranks better than others within the space.”
“We’re not trying to avoid the issues entirely; we know we are going to own companies that have some contentious issues and Barrick is certainly one of them.”
Of course, both Walker and Grosskopf note that socially responsible investors can avoid Barrick by investing in other Canadian Ethical or Acuity products, such as Ethical’s Special Equity Fund or Acuity’s Clean Environment Equity Fund. “We don’t own gold in that fund,” Grosskopf notes. “I don’t think you can mine gold without having significant environmental impacts, that’s the nature of that sector.”
Canada’s two other SRI-focused mutual fund companies – Inhance Investment Management and Meritas Mutual Funds – do not hold Barrick.
Barrick is a top ten holding in four Canadian SRI funds: Ethical Balanced, Ethical Stock, Ethical Index and Acuity Social Values Canadian Equity.
Bob Walker, vice president, sustainability, at Ethical Funds notes that the Norwegian pension fund uses divestment as a tool to express dissatisfaction with a company’s performance, instead of engagement, which is Ethical’s preferred approach.
Walker notes that Ethical has been talking with Barrick since 2005 and has made progress in a number of areas. For instance, Barrick has established a human rights policy, joined the UN Global Compact on corporate responsibility, hired a chief medical officer to deal with HIV/AIDS and has extended the availability of antiretroviral drugs to employees and their families.
The company also established community engagement guidelines that Walker says could have improved Barrick’s performance in a number of controversial mining projects around the world. However: “In the last two years, that hasn’t happened, the controversies are continuing.”
Ethical sent two analysts to Nevada last year to tour Barrick’s mines and meet with the Western Shoshone community. Subsequently, Ethical recommended that Barrick consider conducting a human rights impact assessment of that project, an idea rejected by Barrick.
Ethical is now in the process of drafting a shareholder proposal for Barrick’s 2009 annual general meeting in an effort to get the company to improve its human rights and environmental performance, Walker says.
So what would it take for Ethical to divest in Barrick?
“We have fairly clear rules on that,” Walker says. “We make three concerted efforts at engaging a company on any given issue and if they fail to respond with sound arguments on those three occasions then we will divest.”
The rejection of [establishing a human rights impact assessment in Nevada] would represent the first strike, Walker says. But there’s still the shareholder proposal and an upcoming meeting with Barrick’s new CEO to consider. “We’ll see how things go from there. We are pretty patient around these issues and we believe that corporate change takes time.”
Over at Acuity, Social Values Funds manager Martin Grosskopf points out that for a Canadian equity fund benchmarked to the TSX, the gold sector is impossible to ignore.
Still, he concedes that Barrick, like most companies in that sector, does not come without controversy. “The reality is that all of the gold mining companies have significant issues and Barrick has had many of these issues for years, but it still ranks better than others within the space.”
“We’re not trying to avoid the issues entirely; we know we are going to own companies that have some contentious issues and Barrick is certainly one of them.”
Of course, both Walker and Grosskopf note that socially responsible investors can avoid Barrick by investing in other Canadian Ethical or Acuity products, such as Ethical’s Special Equity Fund or Acuity’s Clean Environment Equity Fund. “We don’t own gold in that fund,” Grosskopf notes. “I don’t think you can mine gold without having significant environmental impacts, that’s the nature of that sector.”
Canada’s two other SRI-focused mutual fund companies – Inhance Investment Management and Meritas Mutual Funds – do not hold Barrick.
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