Boston, MA – In a shareholder proposal led by Boston Common Asset Management, 17 investors representing over 24 million shares of Cisco Systems, Inc (NASDAQ: CSCO) totaling over $580 million USD are urging the company to adequately manage human rights related risks in its global operations.
The investors are asking Cisco to take concrete steps to mitigate human rights related risks that could ultimately stifle long-term demand for the networks it builds.
Investors concerned about increasingly aggressive tactics implemented to curb Internet freedom and violate privacy, and the potential of those actions to thwart the pace of Internet use in markets of vast potential for Cisco, have shown significant support for greater transparency of human rights risk mitigation at Cisco. Since 2005, average annual support for the proposal by all Cisco shareholders has been approximately 30 percent—a significant endorsement by mainstream investors for a request of this nature.
RiskMetrics Group, a leading proxy voting agency and provider of risk management, corporate governance and financial research & analysis, is supporting the resolution for all of its clients, concluding “…additional information in its existing public documents on policies and practices related to doing business with governments that restrict certain human rights could be further beneficial to shareholders without significant expense or burden on the company.”
“In the past year alone we have seen producers of standardized Internet and communications technology equipment such as Apple, Dell, Research in Motion, and Nokia Siemens Networks become mired in complex circumstances having a direct impact on privacy, personal security, and freedom of expression of users,” stated Dawn Wolfe, Associate Director of ESG Research at Boston Common Asset Management. “Cisco is not immune to these risks and investors want concrete evidence it is managing this frontier of its global presence.”
Apple and Dell were recently confronted with a Chinese government mandate requiring installation of net filtering software on all machines, Blackberry users in the United Arab Emirates were asked to download performance software that was actually a surveillance application, and Nokia Siemens Network is suffering a boycott in Iran following accusations it intercepted local voice calls in the aftermath of the contested election. Cisco operates in all these countries and in particular has made significant investments totaling $16 billion USD in China. In 2008, the Global Network Initiative, a multi-stakeholder effort to protect freedom of expression and privacy rights on the Internet, was launched. Cisco has declined to participate.
“Given the nature of Cisco’s technology and the geography of its operations around the world, we believe that the company must acknowledge its risks and responsibilities with respect to human rights. Shareholders and stakeholders alike need answers.” stated Bennett Freeman, Senior Vice President of Sustainability Research and Policy, Calvert Asset Management Company, Inc.
Over the past five years, Cisco’s General Counsel has been called to testify before Congress twice to describe the company’s alleged role in stifling freedom of expression in China and elsewhere.
Cisco publicly states it has actively opposed efforts that enable censorship and filtering and that it will continue implementing existing human rights policies and practices. “After five years of sincere and concerted efforts on our part to engage in meaningful dialogue with Cisco on these very complex issues, we still find ourselves asking, ‘What efforts? What policies?’ Cisco’s responses to our concerns have been wholly inadequate,” stated Adam Kanzer, Managing Director and General Counsel of Domini Social Investments, one of the sponsors of the proposal.
Co-sponsors of the proposal include Adrian Dominican Sisters, Calvert Asset Management Company, Inc., Church of the Brethren Benefit Trust, Inc., Domini Social Investments LLC, Dominican Sisters of Hope, Mercy Investment Program, New York City Employees’ Retirement System, New York City Teachers’ Retirement System, New York City Board of Education Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund, Northwest & Ethical Investments, The Paulist Center, Boston, MA, Sisters of St. Dominic of Tacoma, Ursuline Sisters of Tildonk, U.S. Province, Walden Asset Management / a division of Boston Trust and Asset Management Co. and other institutional investors.
About Boston Common Asset Management
Boston Common Asset Management is an employee-owned firm dedicated to the pursuit of financial return and social change. We seek sustainable, long-term capital appreciation by investing in diversified portfolios of sustainable and responsible enterprises. We base our investment approach on holistic, fundamental judgment formed by a close-knit team of senior finance professionals. We integrate environmental, social, and governance (ESG) criteria into the stock selection process and express a preference for best-in-class firms with innovative approaches to the environmental and social challenges their industries face. As shareowners, we engage with the managements of portfolio companies to improve their disclosure and corporate practices. Our clients are a diverse mix of public pensions, institutional endowments, and high net worth individuals.
Dawn Wolfe, Boston Common Asset Management;
Office 617-720-5557; Mobile 617-721-2315; Dwolfe@bostoncommonasset.com