As part of its sustainability agenda, Wal-Mart has made three announcements regarding certain products it sells and their social impact. These initiatives result in part from shareholder advocacy that has strongly encouraged Wal-Mart to adopt more sustainable business practices.

The gold and silver in the new Love, Earth jewelry line can be traced from where it was mined to the store shelf. This transparency and documentation is meant to assure the company and its customers that the jewelry line is sourced from mines and manufacturers that meet its environmental and human rights standards. In the future, Wal-Mart hopes to source 100 percent of its gold, silver and diamonds from places that meet its sustainability standards.

Wal-Mart has also joined the Global Forest and Trade Network, a program backed by the World Wildlife Fund that aims to eliminate illegal and unsustainable logging worldwide. Wal-Mart has pledged to eliminate the wood in its own furniture line that comes from illegal or unknown sources within five years. This pledge will be subject to independent auditing.

Additionally, Wal-Mart has revamped efforts by its individual stores to purchase and sell local produce. The company has purchased local produce for many years, but hopes to increase its partnerships with local farmers to cut shipping costs and provide fresher produce.

You can read the full stories in the document below:

Wal-Mart Stories

A new report from the UN’s Principles for Responsible Investment (PRI) initiative, supported by MMA, highlights significant progress in gaining global commitments to integrate social and environmental values with investment decisions.

The initiative, a collaboration of the United Nations Environment Programme Finance Initiative, the UN Global Compact and institutional investors, recognizes that long-term business success is linked to society’s interests and needs. Released last week, the report showed that the number of investors which have committed to the principles has doubled to over 380 in the past year, representing more than $14 trillion.

MMA has signed the principles and contributed data that was used to develop the report. MMA is one of a few faith-based investor signatories in the U.S. As a shareholder in many corporations, MMA is committed to communicating its concerns with the corporations’ management about financial and social issues.

Solar and wind energy have long been clean energy alternatives in the production of electricity. However, their usefulness has been limited by the inability to store their power for later use, when the sun isn’t shining and the wind doesn’t blow. Unlike coal-fired, nuclear and hydroelectric plants, solar and wind energy are intermittent and can’t be relied on to continuously generate large amounts of power.

Some energy scientists are now touting what could be a major breakthrough in solar energy storage. Researchers at the Massachusetts Institute of Technology have developed an unprecedented process that uses solar energy to split water into hydrogen and oxygen gases. The oxygen and hydrogen are later recombined inside a fuel cell to generate electricity. Such fuel cells could power a house or car. The scientists hope these fuel cells will be widely available within 10 years.

If this is indeed a viable and effective way to store power, it’s a a major win for the environment and our energy needs. In company engagements, utilities and financiers often argue in favor of continued fossil fuel use - rather than renewable energy - to generate the “base load” electricity needed around the clock. If this new process can transform the way solar energy is stored, companies will have more reason to invest in the sun and less reason to use fossil fuels.

MMA Praxis Mutual Funds joined Boston Common Asset Management and other concerned investors in filing a shareholder resolution with ConocoPhillips seeking a report on the Company’s policies, procedures and practices for obtaining consent of Indigenous Peoples affected by exploration and development activities. The majority of untapped oil reserves lie in ecologically sensitive and politically unstable parts of the world. It is increasingly important that companies develop sophisticated processes for engaging Indigenous Peoples whose lives are dramatically transformed and disrupted by massive natural resource extraction projects. Failure to do so generates anger, disenfranchisement and active—even violent—resistance. This has cost energy companies billions of dollars, damage to property and loss of human life in countries like Nigeria, Indonesia, Ecuador, Columbia and elsewhere.

Shareholders raised these concerns related to ConocoPhillips plans to explore and develop resources within the remote Northern Peruvian Amazon—a region where a number of indigenous peoples are seeking to live in Voluntary Isolation from the modern world, preserving their ancient ways of life. Efforts by ConocoPhillips and its partner Repsol, pose very real threats to the economic, spiritual, cultural and physical health of these isolated peoples.

The resolution appeared on the Company’s ballot at its May 14, 2008, annual meeting and earned a 9% positive vote, down slightly but sufficient for refiling a third year. The number not voting with management (“yes” + abstentions) actually rose to 24%.

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A story covered by Bloomberg News details the damages that Massey Energy Company may have to pay out if it loses a lawsuit brought by hundreds of West Virginia residents. According to the article, Massey may have to pay $125 million in damages, and potentially as much as $1 billion in punitive damages for environmental harm that has affected many of the state’s residents. Massey has been one of the top performers in the Standard and Poor’s 500 index for the last year, but that could change as investors begin to factor in these litigation risks.

In our talks with Bank of America on their financing of coal-fired power plants and coal mining operations (see post below), one of our arguments in calling for a moratorium on coal financing was the financial threat of litigation. Coal is relatively cheap to extract and use as an energy source only if external costs such as contaminated water, flooding, ruined property and global warming are not factored in. If these externalized costs are calculated, coal no longer looks like a good deal.

And operating mines are only part of the problem. As with most mining companies, Massey owns many mines that are well past their productive stage. But once a mine ceases to produce coal, it continues to pollute, exposing the company to indefinite liabilities. Mining companies often go bankrupt once liabilities become too great - leaving financial institutions which have loaned them money, with a loss.

I think that an increasing number of lawsuits over mining damage - combined with a carbon dioxide tax - will at least begin to reveal the true cost of coal.

The National Labor Committee has released an in-depth - if not scathing - report on the human toll of Toyota’s auto manufacturing, available here. The report links Toyota to human trafficking and sweatshop abuse in its auto parts supply chain, the use of 10,000 low-wage temporary workers, unpaid overtime and severely overworked employees, repression of unions and an overall lowering of wages and benefits throughout the US auto industry. Toyota has yet to generate a significant response to these allegations.

Toyota has been lauded for its green tilt, as it fields an impressive array of hybrid vehicles. It has even surpassed General Motors as the largest auto manufacturer in the world, thanks in part to the popularity of its fuel efficient cars. Yet for all its green credentials, Toyota seems to lag behind on human rights and justice issues. Products which are environmentally-minded are not necessarily produced in a sustainable way.

This case serves as a reminder that true sustainability goes far beyond ‘being green’ to include employee - and stakeholder - well-being. Stakeholders are people whose lives are affected by a company’s actions. These can include employees, customers and those who live next to a factory, among other groups. If people are suffering directly or indirectly because of a company, that company fails to embrace holistic sustainability. When shareholder advocates engage companies on social issues, we must support the fullest expression of sustainability.

The European Union has unveiled new laws meant to restrict companies from manufacturing harmful chemicals. The laws require that a chemical must be comprehensively proven safe before it can enter the marketplace. The new requirements will be phased in over the course of ten years, and they will have significant impact worldwide. The story is covered by the Washington Post.

As the article notes, the EU has adopted a regulatory stance that emphasizes consumer safety over short term profits for chemical corporations. Whereas the EU’s laws mean that a chemical must be proven safe to be marketed, chemicals in the US are marketed first and then banned or restricted only if the companies marketing them report health hazards. Then government agencies such as the Environmental Protection Agency (EPA) are responsible for carrying out further testing and taking regulatory action - yet the agencies are underfunded, and undermined by industry lobbyists. Only five of the 80,000 commercial chemicals in the US market have been banned by the EPA. The government has little or no information on most of those chemicals.

For the sake of human health and the environment, the EU’s new rules are positive. Since most chemical companies operate worldwide - and can’t afford to lose the business of the EU’s 27 countries and 500 million people - they will need to seek out safer ways to produce products, perform greater testing, and retool their factories. Since shareholder advocates have long been pushing companies to get toxic chemicals out of products, the new regulations will provide strong economic impetus for change.

MMA has been actively involved in shareholder advocacy with Bank of America (BAC) regarding its funding of coal-fired power plants and mountaintop removal (MTR) mining projects. Along with representatives from Trillium Asset Management, ICCR and Ceres, I traveled to Bank of America Tower in New York last week. We met with BAC’s Managing Directors of Energy, Global Industries and Natural Resources, as well as its Senior Risk Manager and Public Policy Director.

Our goal has been to encourage BAC to place a moratorium on the funding of new coal-fired power plants and MTR projects - and eventually stop financing them altogether - in an effort to curb greenhouse gas emissions and other environmental damage.

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