Page 3049 - Week 07 - Thursday, 30 June 2011
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Apart from the principle of the issue, which I honestly would have thought was enough anyway, there is a real and tangible outcome. Typically these resolutions are developed over a long period of time in consultation with a range of stakeholders, community groups and the companies themselves. They are part of a long campaign of action to address the particular problem. When the resolutions are finally put at a shareholder meeting, it is only to companies that have refused to engage and respond to the concerns. In the US a resolution must get at least three per cent support in order to be put again the next year, and in the next year it needs an additional three per cent, and so for each year following. So whilst we may only be a very small shareholding in the company, our vote can make a big difference. It can just get us over the line. It may well be that our vote is enough to determine if the campaign to stop child sex trafficking, for example, can continue. I should also make the point that ordinarily, if they manage to get 15 per cent support, it is considered a win and this is usually enough to effect change in the company.
The next point is that for the various fund managers and financial advisers who give advice on these issues to other investors, the fact that governments sign up to them is significant. They can advise their clients that this or that government, as well as this or that institution, are supporting the motion and there is a flow-on effect from this.
Shareholder activism is very important. Given that the government has to date said that it does try to engage with companies to bring about change, I cannot understand why they would not want to avail themselves of the most direct form of engagement by doing that and driving change.
Let me go briefly to the Delta Air Lines resolution. This was about developing a policy to address child sex trafficking in their operations. Typically, when the ICCC withdraw resolutions it is because the company have agreed to respond to the issue. It is typically a win if the resolution is withdrawn. That may well be the situation in this case; if so, I am very pleased with the outcome.
I am also a bit disappointed that the government did not have the opportunity to support the resolution formally, because it is an issue of great importance and, I would have thought, probably the easiest resolution to support. I will say, though, that I do intend to ask how we have voted in other motions. Now is the season in the US, and the Greens will be following up on the issue.
On the other outputs from the superannuation provision account in the budget—I am very pleased that implementing changes is one of the listed priorities; I am very pleased that the government has accepted the need for change. The Greens are very much looking forward to working with the government on this matter. We are very confident that we can achieve real progress on this issue and use our investments for better environmental and social outcomes while at the same time maintaining strong financial returns for the community.
I hope that by this time next year we will have a much more actively managed portfolio, that the government will be able to report on the social and environmental, as well as governance, resolutions it has supported and, further, that we will no longer
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