Week of 8/8/2004

Dear EarthTalk: What is "shareholder activism" on behalf of environmental protection?

—Michelle Zanler, Austin, TX

When the international environmental advocacy group Greenpeace made a decision in 2001 to invest in Shell Oil, it caused gasps in the environmental community, which wondered why the group, known for its daring tactics against polluters, would invest in one of the very companies it criticized. But buying $250,000 in Shell stock made Greenpeace a shareholder and thus enabled the group to file a "shareholder resolution" asking the company to substantially increase its investment in renewable energy technology.

Other recent high-profile environmental shareholder resolutions have challenged the use of genetically modified ingredients in foods, urged more recycled content in packaging, opposed pollution that contributes to climate change, and pushed for computer "take-back programs" by manufacturers that could re-use components in making new ones. According to Tracey Rembert of the Social Investment Forum (SIF), there were more than 30 resolutions relating to climate change alone filed in 2003.

Shareholder activism is not just for advocacy groups like Greenpeace and SIF. Individuals who own stock can get involved, too, by filing resolutions on their own or in partnership with an advocacy organization, by voting their proxies (the ballots mailed to shareholders), and by simply writing letters to the CEO (which have more clout coming from shareholders). Investors can also ask their pension plan or portfolio managers to contact a company on their behalf about an issue.

What fruits, if any, have these efforts yielded? A resolution asking American Electric Power to report on its greenhouse gas emissions received nearly 27 percent of the vote, and a resolution asking ChevronTexaco to report on its plans for developing renewable energy sources received 25 percent of the vote. "If a vote gets about 20 percent it usually pushes the company enough to take some action," says Rembert.

Resolutions sometimes never reach completion, but instead succeed by drawing enough advance attention to start a dialogue with company management. Negotiations with ConocoPhillips following the threat of a resolution led to a pledge from the CEO to produce a climate change plan for the company. And office supplies superstore Staples agreed to set company greenhouse gas emissions reduction targets because of pressure from shareholders.

Filing a shareholder resolution requires legal savvy, and many investing professionals recommend getting guidance. "Start with co-filing a resolution under the direction of an organization like the Interfaith Center on Corporate Responsibility," recommends Carsten Henningsen, chairman of Portfolio 21, an environmentally focused mutual fund. "If you have people filing that don’t have political sensitivities, or that aren’t aware of others" strategies, it could cause harm to shareholder efforts," he says.

CONTACTS: Greenpeace, (202) 462-1177, www.greenpeaceusa.org; Social Investment Forum, (202) 872-5313, www.shareholderaction.org; Portfolio 21, 877-351-4115, www.portfolio21.com; Interfaith Center on Corporate Responsibility, (212) 870-2295, www.iccr.org.


Dear EarthTalk: Why are recent wildfires in the American West bigger, harder to control and more damaging than those in previous decades?

—Joe Lyons, Jamaica Plain, MA

Indeed, the first few years of the 21st century have played host to wildfires of unprecedented proportions throughout the American West, killing hundreds of people and displacing thousands more, while causing billions of dollars in property damage. While natural forces such as lightning strikes started many of these fires, the forest management policies of the 20th century are to blame for the huge scope of individual fires and the destruction left in their wakes.

Historians credit a series of wildfires in 1910 that scorched three million acres of forest and claimed 85 lives in the Northern Rockies of Idaho and Montana with forcing the U.S. Forest Service to take on fire suppression as a top priority. Symbolized in later years by Forest Service mascot Smokey Bear (who is 60 years old this year), this policy did prevent many fires during its half-century reign, but it also caused a large build-up of tinder-like woody debris that eventually fueled the largest wildfires on record in recent years. When fires did begin to return, they burned out of control with a vengeance.

Foresters began to question the Smokey Bear fire suppression policy in the 1960s when they realized that no new sequoia trees were growing in California. Researchers found that these trees depend upon the high temperatures of forest fires to pry open their cones so new seeds can spring forth and take root. Looking past the case of the sequoias, researchers found that fire is an essential part of the ecology of forests. In fact, several types of trees, grasses and wildflowers have evolved in relation to fire, and depend upon occasional burns for propagation of their species.

Beyond local ecological effects, the raging fires of recent years are also contributing to global warming. Intact forests act as "carbon sinks" by storing carbon dioxide from the atmosphere in their woody debris, thus lessening the impact of pollution from cars and smokestacks. Forest fires release this stored carbon dioxide back into the atmosphere, which only exacerbates climate change.

The U.S. Forest Service now stages some "controlled burns" in order to minimize the impacts of naturally-occurring fires. While the idea of fighting fire with fire may seem strange, it is not new: Native Americans first employed controlled burns to help keep larger fires in check for many years before the arrival of Columbus. Today, individual landowners with acreage vulnerable to forest fire can help by conducting their own controlled burns in accordance with state and local laws, of course to help prevent larger and more destructive fires.

CONTACTS: U.S. Forest Service, (202) 205-8333, www.fs.fed.us; SmokeyBear.com, www.smokeybear.com; American Forests, (202) 955-4500, www.americanforests.org.