Harvard Votes ‘No’ on Green Reports

Following the trend of recent years, company proxy proposals addressing environmental policy topped the Harvard Corporation’s voting docket, according to an annual report released today.

Harvard’s two-member Corporation Committee on Shareholder Responsibility (CCSR) reviewed 126 proxy proposals, voting on 96 while abstaining on the other 30.

After reviewing the proxy proposals, a 12-member Advisory Committee on Shareholder Responsibility (ACSR)—which is composed of students, faculty, and alumni—decides which proxies it will take a stance on. The ACSR then gives the CCSR non-binding recommendations on how to vote.

The proxy proposals, a selection of which the ACSR considers, are themselves originally proposed by other shareholders wishing to raise specific issues with the companies’ management.

Topping the list of issues were company sustainability reports, which “address the economic, environmental and social performance of the company.”

The committees agreed to oppose the issuance of sustainability reports for five companies, including General Electric and Yum! Brands, which owns KFC, Taco Bell, and Pizza Hut. The vote came despite a two-year boycott of Taco Bell because of allegedly poor working conditions for its tomato pickers.

The report called it “unreasonable” to ask for sustainability reports “in the absence of a clear definition of sustainability and a better understanding of the types of information that would be required.”

In the report, the Corporation expressed concern that companies would be forced to “reveal competitively sensitive information.”

The committees did, however, support a request that the Seaboard Corporation issue a report in light of public health concerns surrounding its pork-production division. The report linked the CCSR’s support of the request’s greater clarity and specificity, as well as its focus on “long term public health concerns.”

The CCSR also considered 18 proxies requesting that companies including Citigroup, Inc., General Electric, and The Boeing Company provide reports on their political donations. The requests ask for an explanation of both the companies’ rationales behind political donations and the source of the donations.

Though the ACSR was in favor of all of these proxies, the CCSR abstained across the board.

The report said the CCSR abstained because the ACSR opinion “has shifted significantly since last year when a majority was leaning toward opposition.”

The report also mentioned the CCSR’s unwillingness to identify who was involved in the decision-making process of political contributions.

Secretary to the Committee Elizabeth A. Gray said that this year’s report was “pretty normal.”

She noted that the CCSR did address companies’ involvement with “repressive governments,” particularly the Sudan.

The CCSR deviated from its normal practice when it directed the Harvard Management Company to divest from PetroChina Company Limited, even though no shareholder proxies were raised and the ASCR did not advise the committee to act accordingly.

Despite the University’s preference to sell its holdings only for financial and not political reasons, the CCSR advised divestment because of PetroChina’s strong affiliation with its parent company, China National Petroleum Corporation (CNPC). The CNPC, which owns 90 percent of PetroChina, is a known partner of the Sudanese government, a relationship the CCSR condemns in light of the genocide in Darfur.

The decision to divest came after months of vocal activism from student groups.

According to the report, the CCSR—composed of Chairman Robert D. Reischauer ’63 and James R. Houghton ’58—agreed completely with the ASCR’s recommendations on 95 of the 126 proxies.