When it comes to the issue of sustainability accounting, corporate responses are all over the map. Some corporations have voluntarily reported on a host of what are now called environmental, social and governance (ESG) factors for more than 20 years (e.g., Kodak), whereas as others have generally tried to avoid doing so (although the empirical evidence suggests that such a position is becoming less and less tenable). And of course, there are a host of intermediate responses, in terms of when companies decide to account for sustainability, and in terms of what they count as sustainability, and how they account for it.
Shareholder activism is one of many factors which might influence if, when and to what extent a corporation chooses to produce a sustainability account. With that idea in mind I was intrigued by a recent press release from Harrington Investments:
Intel corporation has agreed to amend the Charter of the Corporate Governance and Nominating Committee to include “corporate responsibility and sustainability performance” into the committee’s overall policy responsibility. Intel also provided [Harrington Investments] with an outside legal opinion stating that under Delaware Law directors have a fiduciary duty to address corporate responsibility and sustainability performance as specified in the committee charter.
Harrington Investments describes itself as “a 28 year-old Napa, California-based socially responsible investment advisory firm that manages assets of individual and institutional investors requiring social and environmental as well as financial portfolio performance.”
This was the second year in a row that Harrington had introduced a shareholder resolution to amend Intel’s bylaws to create a Board Committee on Sustainability. Although Intel initially opposed the resolution, it later engaged in a dialogue with Harrington. As of March 18, 2010, Intel’s Corporate Governance and Nominating Committee charter now requires its that the committee:
reviews and reports to the Board on a periodic basis with regard to matters of corporate responsibility and sustainability performance, including potential long and short term trends and impacts to our business of environmental, social and governance issues, including the company’s public reporting on these topics.
Currently, Intel’s Corporate Governance and Nominating Committee is chaired by David B. Yoffie. Other members include Reed E. Hundt, Jane E. Shaw, and John L. Thornton.