Submitted by Boston Common Asset Management
The resolution was filed on behalf of NYCFD, the NYSCRF and Amnesty International USA along with Boston Common Asset Management and Sisters of Mercy Regional Community of Detroit Charitable Trust. Shareholder proponents hold over 4.5 million shares worth over $190 million.
New York City Comptroller William C. Thompson, Jr. said, "Given our long investment horizon, we believe that it is our fiduciary obligation to urge companies in which we invest to be responsible corporate citizens in the communities in which they operate. This approach is critical for ensuring the viability and sustainability of business in this rapidly growing global economy. Successful companies most likely will be the ones that incorporate sustainable use of environmental and social capital in their business decisions."
Earlier this year Boston Common Asset Management and other concerned investors sent a letter to Dow Chemical's Board of Directors requesting full disclosure of the potential financial impacts on the company and its subsidiary UCC as a result of the outstanding issues related to the Bhopal disaster and the continued contamination at the site. Investors concerns also pointed to the reputational impacts on the company and the impacts this issue poses on its future market growth in Asia.
In response, Dow wrote: "We continue to believe the Company's disclosures of these matters are appropriate and in full compliance with the Generally Accepted Accounting Principles and other requirements of the Securities and Exchange Commission."
Dow Shareholders believe that the company's response to disclosure on Bhopal and related social and environmental liabilities is inadequate. "I am shocked that the Board of Directors approved a response that does not address our company's responsibility to remediate the impacts of that accident on the people and their communities," said Sister Valerie Heinonen, consultant to the Sisters of Mercy Trust.
Numerous unresolved legal issues remain from the Bhopal disaster. Due to its refusal to appear in a criminal case, UCC has the status of a fugitive from justice in India. These issues have become a challenge to Dow Chemical, extending from its new subsidiary.
"Dow Chemical, with its 2001 acquisition of Union Carbide, has inherited a serious environmental issue. Management really needs to prepare for the potential liability it faces, particularly lost businesses opportunities around the world, if these issues regarding the Bhopal incident are not resolved," said New York State Comptroller Alan G. Hevesi.
"Despite ten of thousands of letters from our members, and repeated attempts by Amnesty to engage them seriously on this subject, Dow has still not adequately addressed the health or environmental needs of communities in Bhopal," said Amy O'Meara of the Business and Human Rights Program of Amnesty International USA. "Dow needs to stop pretending this isn't their problem, and start dealing with it."
Boston Common Asset Management is an employee-owned investment firm dedicated to the pursuit of financial return and social change. We offer social investors an unrivaled range of customized social investment products. These include U.S. core- or value-oriented equity and balanced accounts, as well as international and small cap options. Our efforts on the social dimension include thorough independent research, tenacious shareholder advocacy, and community development investing.
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