Occasionally, on CorporateRegister.com, I come across a report that doesn't quite fit the standard categorization of CSR or sustainability report. This is why the report from Inhance Investment caught my eye. It is called Stakeholder Engagement Report, Dialogue to Deeds, 2010. Inhance is a Canadian mutual fund company with approximately $75 million of mutual fund assets under management, active in socially Responsible Investment (SRI). Founded in 2001, Inhance is based in Vancouver and is owned by Vancity, one of Canada’s largest credit unions.
The report, 13 pages short, opens with "Over 2009 we engaged 23 companies on emerging ESG risk. Key areas of engagement include: climate change, product safety, ecosystem integrity, community relations and diversity. In early 2009 we also negotiated withdrawals on six shareholder resolutions filed in 2008 for 2009 annual general meetings."
In the area of climate change, Inhance contacted 8 companies who had declined to report to the Carbon Disclosure Project. "In particular we focused on the need for company boards to be aware of the evolving regulatory regime for climate change, and the opportunities in renewable energy, conservation and efficiency improvements." Inhance names the companies, but fails to report on whether there was any response to their contact, which is a shame. On hydraulic fracturing, the process used to release reserves of natural gas using high pressure water pumps, Inhance contacted six companies about their practice in this area, and received responses from three.
Similarly, Inhance was active in the food area, contacting General Mills about misleading claims of reduced calorie breakfast cereals which were the result of playing around with portion size and not product modifications! Also, Inhance has taken up the use of BPA in packaging at General Mills and Pepsico. On diversity, Inhance engaged with five companies lacking in either gender or visible minority diversity at the board level.
There are two points to make here, one good, one could-be-better.
The good is that this sort of activity from Investment Houses and mutual funds is highly welcome. Inhance's proactive stance and reachout to companies is exactly what more investment companies and investors and analysts should be doing, as most public conpanies will "voluntarily" change only when they are given a little encouragement on behalf of people who want to invest in them. This is a critical route to more sustainable practices and I am happy to see Inhance reporting on this. It's the vigilante work of the CSR community.
The could-be-better is that, having decided to produce a nice shiny report, couldn't Insight have gone the extra mile and reported on outcomes of engagement rather than just initiation? Wouldn't it be nice to know that all their hard work in talking to companies had actually yielded some benefit ? (assuming it did).
Anyway, their report is a 13 page document which takes 5 minutes to read, but it's worth it. The principle of identifiying issues you feel strongly about and making sure companies know it is a golden rule of stepping up sustainability. Give feedback. Ask questions. Request change.