Michael Muyot’s response to Jeffrey Hollender’s 10-point plan

On Wednesday, Jeffrey Hollender, co-founder of Seventh Generation, gave an interview to CSRwire outlining a ’10 Point Plan’ to refocus and rebuild the U.S. economy. To review the plan please click here.

Yesterday, Michael Muyot, President of CRD Analytics, countered Hollender’s plan with a plan of his own. Here is what he had to say:

Jeffrey, thank you for your poignant and timely ideas on how to Rebuild the American Economy & Way of Life. Instead of adding items, I’d like to make a suggestion for an Action Plan to ensure successful execution. As someone who has also been at the forefront of the Sustainability movement I think there’s enormous challenges to being successful with making the changes you listed above. The cards are stacked against us. Here’s what I think may be a framework to get started:

Microsoft in the spotlight

Last week I received a must read article from Michael Muyot, Founder and President of CRDAnalytics, about Microsoft’s proxy vote coming up on 11/16/2010. He prefaced the article by saying it’s a “very real and tangible result of the integration of social media with quantitative measurement of sustainable investment performance.”

Shareholder resolutions filed with Microsoft, Oracle and Cisco by Harrington Investments are now in a digestable format and have been delivered to the country’s major university endowments and TIAA-CREF for participation. The point is that ignoring investor concerns is bad for business and can have negative impacts on the market.

Peter DeSimone and Heidi Walsh established Sustainable Investments Institute SI2 in January 2010, providing impartial analysis of CR issues raised in shareholder-sponsored proxy proposals. SI2 recently issued an Active Report on Sustainability Reporting, focusing on Microsoft. The Report looks at the proposal of activist investor John Harrington, who wants the company to amend its bylaws to establish a board committee on environmental sustainability. He’s quoted as saying: “to assess and make recommendations to enhance, the Company’s policy responses to changing conditions and knowledge of the natural environment…” 

Microsoft’s response: the proposal is unnecessary because it already has a board committee that oversees its corporate responsibility issues, including environmental matters. CRDAnalytics removed Microsoft from the NASDAQ Global Sustainability Index because of “inadequate disclosure of environmental metrics”. Harrington believes this damaged Microsoft’s reputation, but thinks it can recover by adopting this proxy.

Ultimately, asset owners/managers and investors have been increasing the pressure on corporate boards and managers through the proxy/election process to encourage change in corporate behavior. These investors are focused on environmental performance data and sustainability reporting.

Many experts predicted that investors would demand non-financial reporting – why do you think large companies like Microsoft are still hesistant to report substantial and tangible data, hence listening to their investors? Do you think government-mandated non-financial reporting will soon follow? Discuss!

For the full SI2 action report, please click here.

Apple Should Take a Bite at Sustainability Reporting.

Not long ago, Apple was on the front line of keeping up with their competitors at trying to be the greenest electronics company. When Apple became the first electronics company to eliminate PVC plastic and brominated flame retardants (BRF’s) the world noticed that they were taking steps to become among the most environmentally conscious in their industry. Apple’s recent activity, however, would suggest they are lagging behind their competitors in their commitment to sustainability. Apple is actively opposing two shareholder petitions to embrace sustainability reporting.

Sustainability reports are one of the most important ways businesses can transparently demonstrate their commitment to sustainability. Without them, key stakeholders, including shareholders, customers and suppliers, can’t be sure whether the company can support its sustainability claims.

Michael Muyot, President of CRD Analytics, recently analyzed and compared environmental, social, governance and financial metrics contained in sustainability reports of the leading electronics companies. According to Muyot, IBM is considered a “champion” in environmental and governance because of their unfailing transparency, while HP scored highest in social performance. According to Muyot, “HP boasted a strong social performance score due to robust social policies and above industry average performance on workplace safety and employment creation metrics.” Apple ranked below Dell in all categories.

While Apple has strong financial performance, shareholders and other interested stakeholders, it has a great opportunity to reignite its early commitment to sustainability and at the same time elevate its sustainability performance.

– Ellen Stock.