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Here are some words from Dr. Martin Luther King, Jr., to reflect upon on this “day after” the violence in Arizona:

“When evil men (and women) plot,

good men (and women) plan.

When evil men (and women) burn and bomb,

good men (and women) must build and bind.

When evil men (and women) shout ugly words of hatred,

            good men (and women) commit themselves to the glories of love.

Where evil men (and women) would seek to perpetuate an unjust status quo,

            good men (and women) MUST seek to bring into being a real order of Justice.”

 DR. MARTIN LUTHER KING

Let’s all hope that the coming days will renew our collective efforts to PLAN, BUILD and recommit ourselves to seeking “a REAL ORDER OF JUSTICE.”

Peace,

Bob Edgar

President of Common Cause

www.CommonCause.org

* IPS correspondent.

Toyota’s announcement followed three years of dialogue with a coalition of investors, including, Trillium Asset Management Corporation (“Trillium”), Domini Social Investments (“Domini”), Boston Common Asset Management and the Interfaith Center on Corporate Responsibility.

In December 2006, research by Domini Social Investments uncovered an equity partnership between Toyota Tsusho and the Burmese military regime. Investors delivered a letter shortly thereafter to Toyota Motor’s Chairman, Fujio Cho, raising concerns about the company’s business ties to the repressive regime. Toyota Motor responded by confirming it had asked Toyota Tsusho to reconsider its business activities out of concern for the current environment in Burma.

In an August 12, 2010 letter to the investors, Group Vice President James Wiseman of Toyota Motor North America wrote “[W]e are pleased to report to you that as of June 2010, TTC had sold all of its shares in its Myanmar Suzuki joint venture… TTC is now fully divested from its joint venture operations in Burma.”

Holding over 20 percent of Toyota Tsusho’s shares, Toyota Motor is Toyota Tsusho’s largest shareholder. Toyota Tsusho partnered with the Burmese government to sell motorcycles, light trucks and cars. The Burmese government, which stands accused of systematic violations of human rights and crimes against humanity, tightly restricts the domestic market for these vehicles to its wealthiest citizens and those with military connections. Burma ranks among the poorest countries in the world, with the majority of the Burmese population living in poverty.

“We commend Toyota and the role it played in persuading its affiliate to reconsider its ties to the Burmese military rulers. As long as human suffering persists in Burma at the hands of the junta, companies cannot ignore their responsibility to insure their or their affiliate operations do not aid the regime’s offenses,” commented Susan Baker, a research analyst at Trillium who studies the impact of environmental, social and governance (ESG) factors upon investment performance. “Any link to building vehicles to aid the military government’s misrule and brutal suppression of its own people raises moral and reputational issues that present risks to the long term value of the Toyota brand,” she continued.

“Toyota Motor has taken an important step to acknowledge and address human rights concerns within its sphere of influence,” said Shin Furuya, Lead Research Analyst, Global, for Domini. Although Toyota Tsusho has ended its only known direct joint venture with the Burmese government, it continues involvement in other operations in Burma including agricultural and apparel production, which could have significant human rights impacts.

“Toyota Motor and its group needs to continue to address these concerns whether the particular operations have direct business ties with the military regime or not. All companies operating in Burma need to review their relationships with their trading partners and carefully consider whether their company’s operations could directly or indirectly contribute to human rights violations,” he continued. Domini has consistently excluded Toyota Motor from its mutual fund portfolios, partially due to its involvement in Burma.

“The corporate responsibility to respect human rights is becoming the international norm,” commented Rev. David M. Schilling, director of human rights, Interfaith Center on Corporate Responsibility. “The UN Human Rights Council adopted recommendations of the UN Special Representative for Business and Human Rights in June 2008, including the commitment that companies need to demonstrate respect for human rights, not just adopt statements. Toyota’s action to influence its affiliate to divest from Myanmar Suzuki Motor is a good example of its human rights commitment.”

Toyota’s formal acknowledgement of divestment came a day before the Burmese government announced its first elections in 20 years. News of the election drew widespread criticism as it imposes many restrictions, including barring Aung San Suu Kyi, imprisoned leader of the National League for Democracy and winner of the 1990 elections, from participating.  The investor group will continue to encourage Toyota Motor to address these issues and to develop human rights risk and impact assessment tools, particularly in countries considered to have substantial human rights risks such as Burma and Sudan.

Trillium Asset Management Corporation is a Boston-based, independent investment management firm devoted exclusively to sustainable and responsible investing.

Domini Social Investments is a New York City-based investment firm specializing exclusively in socially responsible investing. Domini manages funds for individual and institutional investors who wish to integrate social and environmental standards into their investment decisions.

Interfaith Center for Corporate Responsibility (ICCR) has been a leader of the corporate social responsibility movement for nearly 40 years. ICCR’s membership is an association of 275 faith-based institutional investors, including national denominations, religious communities, pension funds, foundations, hospital corporations, economic development funds, asset management companies, colleges, and unions. Each year ICCR-member religious institutional investors sponsor over 200 shareholder resolutions on major social and environmental issues.

The Securities and Exchange Commission on Wednesday approved changes that make it easier for shareholders to nominate directors of public companies.

The 3-2 vote allows groups that own at least 3 percent of a company’s stock to put their nominees for board seats on the annual proxy ballot sent to all shareholders. The new financial overhaul law enacted last month formally gave the SEC the authority to make the change.

Under the current system, investors must appeal to shareholders at their own expense if they seek new directors on a company’s board or a bylaw change.

The new policy was long sought by investor advocates. But business groups, including the U.S. Chamber of Commerce and a group representing CEOs of large corporations, oppose it. The panel’s two Republican commissioners voted no. One of them warned that it would likely be overturned by a court.

The change comes as investors are angry about risks corporations are taking for short-term profit gains and extravagant compensation packages for executives. Getting candidates on the board gives supporters a better shot at influencing company policy. For a majority of public U.S. companies, the policy change will be in place in time for next spring’s corporate elections season. But it will be put off for three years for the roughly 5,000 companies deemed small, with $75 million or less in market value, of the total 10,000 to 12,000 public companies.

SEC Chairman Mary Schapiro has said the vote was one of the most contentious issues ever addressed by the agency. The change is “a matter of fairness and accountability,” she said at Wednesday’s meeting.

But Commissioner Kathleen Casey called it “so fundamentally and fatally flawed that it will have great difficulty surviving judicial scrutiny.” The new rules favor big institutional shareholders over individuals, she said.

Casey and Commissioner Troy Paredes, the two Republicans on the panel, maintained the rules will trample states’ rights. States are allowed to establish their own procedures for companies based within their borders for conducting shareholder elections. That’s an area where court challenges could come in, Casey suggested.

A U.S. Chamber of Commerce official called it “a giant step backwards for average investors” and said the organization plans to fight it. He didn’t say specifically whether the Chamber would mount a legal challenge to the new rules.

Supporters say the change was necessary, especially in light of the risks taken that led to the financial crisis. The new rules are likely to be used “only in egregious cases where boards have ignored shareowners’ concerns,” said Amy Borrus, deputy director of the Council of Institutional Investors, which represents public pension funds. Yet the fact that the tool is there could make directors more responsive, she added.

Under the new rules, the shareholders will need to have held the minimum level of stock for at least three years. In addition, shareholders won’t able to borrow stock to meet the minimum 3 percent level. And they will have to certify in writing that they don’t intend to use the new rules to change control of the company or gain more seats on the board than the one or 25 percent of the board – whichever is greater – permitted in the new regime.

Until now, the SEC hadn’t made a thorough review of the proxy system in 30 years. In that time, there have been numerous changes in technology, shareholder demographics and the structure of share holdings.

“Corporate accountability is important, particularly for the small number of runaway CEOs who can wreck our economy,” said Sen. Charles Schumer, D-N.Y., who wrote the provision in the financial overhaul law giving the SEC authority to make the change. “This proposal strikes the right balance by specifically empowering those shareholders who take a long-term perspective.”

• Makes the Securities and Exchange Commission’s Investor Advisory Committee (IAC), first established in 2009, a permanent body.  This is a clear “win” for INCR members, since the members must include representatives of “the interests of institutional investors, including the interests of pension funds and registered investment companies.”  The IAC has been useful to INCR as a forum for publicly discussing and advancing climate and other ESG disclosure issues.  While no recommendations on ESG issues have yet come out of the IAC, they are expected within the next year.

• Establishes a new Federal Insurance Office within the U.S. Department of the Treasury.  The duties of this new Office include “monitor[ing] all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the United States financial system.”  These responsibilities could theoretically include assessing the impacts of climate change and the risks it poses to the insurance sector and its financial stability, such as losses due to extreme weather events. INCR members have engaged with insurance companies and state insurance commissioners for years, and federal involvement with this issue could accelerate insurers’ activities to address climate risk.

• Establishes an interagency working group – composed of the U.S. Commodity Futures Trading Commission (CFTC), U.S. Department of Agriculture, Treasury Department, Securities and Exchange Commission (SEC), U.S. Environmental Protection Agency (EPA), Federal Energy Regulatory Commission (FERC), Federal Trade Commission (FTC), and the Energy Information Administration (EIA) – to conduct and complete within six months “a study on the oversight of existing and prospective carbon markets to ensure an efficient, secure, and transparent carbon market, including oversight of spot markets and derivative markets.”

• Establishes an Energy and Environmental Markets Advisory Committee to conduct public meetings (at least twice a year), submit recommendations to the CFTC, and “serve as a vehicle for discussion and communication on matters of concern to exchanges, firms, end users, and regulators regarding energy and environmental markets and their regulation by the Commission.”  The Committee is to be made up of members “who represent a broad spectrum of interests, including hedgers and consumers.”

• Creates a new Office of the Investor Advocate within the SEC, which will, among other things, “identify areas in which investors would benefit from changes in the regulations of the Commission or the rules of self-regulatory organizations” such as stock exchanges.

• Gives the SEC authority to grant shareholders proxy access to nominate directors.  This has the potential to be a significant development affecting the make-up of corporate boards, as it could give large shareholders the opportunity to directly nominate directors (including directors with ESG expertise) on corporate ballots.  The actual requirements for gaining proxy access will be determined by the final version of the SEC’s proxy access rules, expected this month.

• Adds reporting requirements regarding coal and other mine safety, including requiring companies to disclose the total number of violations of mandatory health or safety standards at each coal or other mine they or a subsidiary operate.  This supports INCR members’ efforts to obtain SEC disclosure guidance on material environmental, social and governance risks that affect shareholder value.

• Directs the SEC to issue rules requiring companies that extract oil, natural gas, or minerals and that are required to file annual reports with the SEC to disclose information relating to any payments made “to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals.”  This should increase transparency for investors regarding the actual costs and beneficiaries of resource development.

Friends Fiduciary is a member of INCR, which is a project of CERES.