Following months of campaigning by Greenpeace which included a full-page ad in the NY Times and a very successful International Day of Action for the Boreal Forest, shareholders of Kimberly-Clark met with Kimberly-Clark officials to discuss sustainable forestry and the use of recycled fiber. The shareholders, concerned about their company's tarnished environmental record, urged Kimberly-Clark executives to increase the use of fiber from sustainable forestry operations certified to the standards to the Forest Stewardship Council as opposed to fiber from clearcut ancient forests. Executives with the company responded with a slick slide show presentation, a lot of defensive arguments and no action on curbing the use of fiber from clearcut ancient forests like the North American Boreal.
Undeterred, the shareholders lead by Domini Social Investment and owning nearly $22 million of stock, submitted a resolution to the company and the Securities and Exchange Commission, the US regulator of corporations, asking the company to study the feasibility of switching to FSC-certified only fiber within ten years. Additional shareholders include Calvert Asset Management, the Basilian Fathers of Toronto, the Sisters of the Order of St. Dominic of Grand Rapids, and the Vanderryn Corporations. Though Kimberly-Clark opposed the resolution, the SEC required the company to include it on the company's 2006 proxy statement. The resolution was voted on at the company's annual meeting on April 27th, 2006 in Dallas Texas. Greenpeace campaigners were in attendance at the meeting. 3.4 million shares, totaling over 2 billion dollars.
Though resolutions are not legally binding on a company directors, they do send a very loud message to decision-makers that action is needed on a particular issue. They are also an embarrassment to a company as all shareholders are sent proxy materials outlining resolutions and the outstanding and often serious issues - issues that can have repercussions for those investing in the company and the value of their investments. For example, as revealed by recent polling, consumers in North America are overwhelming against the use of clearcut ancient forests in disposable tissue products and would switch to alternative company's to prevent this destruction. Consumers ending their purchase of Kimberly-Clark products could represent a threat to the company's profits and share price.
