NEWS

Unlocking the Power of the Proxy
To help foundations play more active roles in the corporate-governance and social-responsibility issues of publicly held companies, Rockefeller Philanthropy Advisors and As You Sow have just published a new booklet entitled Unlocking the Power of the Proxy: How Active Foundation Proxy Voting Can Protect Endowments and Boost Philanthropic Missions. http://www.asyousow.org/

Coalition of Social Investors Helps Create
Groundbreaking Report

San Francisco, CA - For the first time, a clothing retailer has publicly rated the way its overseas factories treat their employees. Gap Inc.'s new Social Responsibility Report is the result of two years of dialogue between the company and a coalition of socially responsible investors.

Gap's Social Responsibility Report presents a rating system for evaluating supply factory compliance with the company's code of conduct. The report uses a quantitative ranking system to examine whether suppliers use physical punishment or coercion, protect their workers' right to freedom of association, pay at least the minimum wage, or require excessive overtime.

In addition to a scored ranking system, Gap's Social Responsibility Report provides regional compliance indicators relative to all major elements of the company's code of conduct for suppliers. The report also reveals the number of supplier facilities audited by region and discusses central issues related to non-compliance.

"Today, there is no generally accepted reporting format for supply chain compliance. The Gap report is an important step in the direction of a model format that other companies can adapt and improve upon," said David Schilling, Director of Global Corporate Accountability for the Interfaith Center on Corporate Responsibility (ICCR).

ICCR is a member of the shareholder group, along with Domini Social Investments, the As You Sow Foundation, the Calvert Group, and the Center for Reflection, Education and Action (CREA).

This report presents the first attempt by a clothing retailer to publicly rank the relative level of compliance by factories with its code of conduct. "Nearly a decade after major retailers began to develop codes of conduct for their supply chains to deter sweatshop conditions, it is virtually impossible to determine levels of compliance with these codes," said Adam Kanzer, Director of Shareholder Advocacy for Domini Social Investments, the manager of the Domini Social Equity Fund (NASDQ: DSEFX). "To restore and maintain the confidence of consumers and investors, it is essential that retailers issue public reports detailing code compliance."

"While companies say that they have been steadily improving the quality of their vendor standards enforcement, they have generally not been willing to share meaningful data to verify their assertions," said Alya Kayal, Senior International/Human Rights Analyst for Calvert.

"Establishing a meaningful public benchmark that helps stakeholders and the general public understand and measure the company's progress is a valuable step forward on public disclosure," she added.

"In our view, corporate social compliance systems should exist to bring working conditions in line with internationally accepted human rights standards," said Ruth Rosenbaum, Executive Director of CREA. "These systems are critically important to helping workers protect their rights. We commend Gap for recognizing that its code of conduct sits within this broader context of international human rights norms. It is an important recognition of public accountability."

"Companies need to be held accountable for enforcement of their codes of conduct," said Conrad MacKerron, Director of the Corporate Social Responsibility Program of As You Sow. "Otherwise they run the risk of misleading investors by suggesting that adoption of a code implies adequate monitoring and enforcement."

Members of the group plan to expand existing dialogues with other retailers to encourage them to match Gap's public report. Gap's report is available online at www.gapinc.com.

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Landmark Initiative Will Boost Growing Economic Sector and Reduce Risks to Pensioners and Taxpayers

SACRAMENTO, CA - The California Public Employees' Retirement System (CalPERS) today adopted an environmental technology investment program that is a key component of Treasurer Phil Angelides' landmark Green Wave environmental investment initiative. The Green Wave initiative is designed to bolster financial returns, create jobs and clean up the environment.

The CalPERS Investment Committee voted unanimously to make an initial investment of up to $200 million over the next few years in the "clean" technology sector. CalPERS will make private equity investments, venture capital and project financing available, with commitments potentially reaching several hundred million dollars over the next several years. The aim is to provide CalPERS - the nation's largest public pension fund - with positive, long-term returns, while at the same time creating jobs and economic growth in California in the years ahead.

CalPERS' new Environmental Technology Program will look to invest in technologies such as renewable energy, fuel cells, water purification and conservation, waste recycling and processing, and re-use of materials. Across the globe, demographic trends, public awareness, environmental crises and increased regulation and public policy attention are driving growth in the clean technology industry. In proposing the Green Wave initiative, Angelides noted that investing in technological innovation will allow CalPERS to help build an industry critical to the State and nation, while earning those positive returns for pensioners and taxpayers and addressing environmental problems.

"Now is the time for California to catch the 'Green Wave' of smart, environmental investments and responsible corporate environmental leadership," the Treasurer said. "The environmental technology sector is expanding rapidly in response to the growing worldwide need to clear the air, land and water of pollutants through advanced solutions to our environmental challenges."

CalPERS' Environmental Technology Program is the culmination of the pension fund's effort launched - at the Treasurer's request - more than a year ago to craft a clean technology private equity program. The goal was to fashion a broad, flexible and diversified portfolio of investments that could achieve positive returns in the emerging clean technology investment arena.

The Environmental Technology Program fulfills one of the four objectives of Angelides' Green Wave initiative, which he unveiled last month at the Palo Alto headquarters of Nanosolar Inc., a maker of cutting edge, lightweight plastic solar cells.

The Treasurer's four-pronged initiative calls on CalPERS and the California State Teachers' Retirement System (CalSTRS) - the nation's third-largest public pension fund - to marry the jet stream of finance and capital markets with public purpose by committing $1.5 billion to investments in cutting-edge technologies and environmentally responsible companies. CalPERS and CalSTRS are expected to take action on the various aspects of the Green Wave initiative later this spring and summer.

In addition to proposing that CalPERS and CalSTRS invest a combined $500 million in environmental technology, the Green Wave initiative also calls on the two public pension funds to:

Invest in Stocks of Environmentally Responsible Companies. Urge CalPERS and CalSTRS to invest a combined $1 billion of their stock portfolios into environmentally screened funds through leading active public equity investment managers with proven track records. An increasing number of recent investment research studies have shown that environmentally screened funds are out-performing their non-screened counterparts. Investing in such funds will not only provide CalPERS and CalSTRS with the opportunity for enhanced financial returns, but will also send a strong signal to corporations about the added value of responsible, forward-looking environmental practices. Under this proposal, the performance of any manager selected must equal or exceed that of the funds' existing, active managers.

Demand Environmental Accountability and Disclosure. Using their financial clout in the marketplace, and building on their track record of corporate governance leadership, CalPERS and CalSTRS would prod corporations to provide meaningful, consistent and robust reporting of their environmental practices, risks and potential liabilities. Through a new environmental governance program, CalPERS and CalSTRS would encourage companies - through dialogue, shareholder resolutions and other actions - to improve their environmental operations and reduce their environmental risks and liabilities. As part of this effort, California's pension funds would also join with other major U.S. investors to urge more comprehensive corporate reporting of environmental practices and liabilities. The coalition's effort would include such actions as urging the Securities and Exchange Commission to strengthen environmental disclosure rules, and seeking corporate reporting on such critical financial factors as climate risk assessment and global warming.

Audit real estate portfolios to boost long-term value. Call on CalPERS and CalSTRS to undertake a comprehensive audit of their respective real estate investments to determine whether the investments are maximizing their opportunities to use clean energy, energy efficiency and green building standards and practices that reduce long-term costs and boost long-term value. CalPERS and CalSTRS have nearly $16 billion invested in real estate and property in California, the nation and 22 countries throughout the world. CalPERS and CalSTRS own nearly 160 million square feet of office and industrial space alone.

Bob Epstein, co-founder of Environmental Entrepreneurs (E2) - a national nonpartisan coalition of business leaders who support good environmental policy based on its economic merits - praised today's actions, saying the new investment program "will provide CalPERS with superior financial returns." The growing clean technology markets "can provide California economic growth, new jobs and more efficient businesses while also helping to make a cleaner, healthier environment," said E2's Epstein, whose group's environmental partner is the Natural Resources Defense Council.

Also endorsing the CalPERS action today was Art Pulaski, Executive Secretary-Treasurer of the California Labor Federation, AFL-CIO. Pulaski said that the Treasurer's Green Wave initiative complements the California Apollo Project, an environmental program endorsed by a coalition of labor, environmental and community group leaders. "Like the California Apollo Project, the CalPERS Environmental Investment Program is about changing our future," Pulaski said. "We need to see strong public investment in real job creation - not careless governmental spending or corporate tax breaks that create long term deficits. CalPERS - and soon, CalSTRS - will see great investment returns, benefiting our public employees, and at the same time building the right kind of economy in our state." The Green Wave initiative is an outgrowth of a yearlong series of roundtable discussions sponsored by Angelides with environmental technology and financial leaders across the nation, and of the Institutional Investor Summit on Climate Risk held last November at the United Nations in New York, presented by CERES, a national coalition of investment funds, environmental organizations and public interest groups. The Treasurer was a speaker at that summit.

March 15, 2004 (916) 653-4052 Download PDF of this news release.

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