Environmental, Social Issues Top List of Shareholder Concerns : Investing: Many firms are feeling pressure on everything from pollution to divestment in South Africa.

A record 300 shareholder resolutions on social concerns ranging from South African divestment to teen-age smoking were filed this year for votes at annual meetings, 40% more than last year.

But the fastest growth came in resolutions urging more corporate sensitivity to the environment.

“People are so fed up with things like garbage barges and Exxon spills,” says Rosalyn Will, a researcher at the Council on Economic Priorities, a New York-based public-interest group that follows shareholder resolution trends.

“Enough is enough,” she said.

The growing concern reflects an anxiety over pollution, atmospheric warming and other signs of global deterioration that perhaps has been heightened by publicity about the 20th anniversary of Earth Day on April 22.

The biggest corporate target appears to be Exxon Corp., the oil giant that came to symbolize recklessness for many nature lovers after the March, 1989, oil spill that fouled Valdez, Alaska.

The company will face eight environment-related resolutions at its annual meeting April 25, ranging from dismissing Chairman Lawrence Rawl to pledging commitment to the “Valdez Principles,” a set of guidelines for corporate behavior devised by a coalition of environmental groups after the spill.

“The average person realizes that large companies can change what they’re doing environmentally,” Hill said.

To a lesser extent, shareholder activists say, the environmental theme of the 1990 annual meeting season just getting under way also shows that South Africa is no longer drawing the same level of attention it once did.

Part of the reason is that many U.S. companies have left South Africa voluntarily, and the white-minority government recently has taken some dramatic steps suggesting that it’s willing to give the black majority more power.

“The situation is moving there now,” said Gordon Davidson, outgoing director of the Social Investment Forum, a national association of 375 investment funds that promotes what it calls socially responsible investing.

“It’s a sign of the work we’ve done,” he said. “It’s not that we’re giving up on that issue.”

South Africa remains the biggest single area of social investor attention, with about 120 resolutions filed this year, the same as last year.

By contrast, 45 environment-related resolutions were filed this year, versus six in 1989.

“I think a combination of environmental factors is responsible,” said Timothy Smith, executive director of the Interfaith Center on Corporate Responsibility, a New York church-activist group.

“Obviously, the oil spill galvanized America’s attention,” he said. “The concern about global warming, the ozone layer, the rain forests, reminds us of an international environmental crisis.”

Other recurring resolutions range from a moratorium on nuclear weapons to animal-testing bans to a review of business operations in British-ruled Northern Ireland. But a couple of important new themes have emerged as well.

The most notable are resolutions opposing tobacco product manufacturing and advertising, which are on the agendas of leading cigarette producers such as Philip Morris Cos., American Brands Inc. and Loews Corp.

The Securities and Exchange Commission, which oversees what resolutions can be included at annual meetings, reversed an earlier position that cigarette smoking was not an area in which shareholders were entitled to vote.

Infant-formula marketing also has surfaced as a potential battle issue. Activists have introduced resolutions at Bristol-Myers Squibb Co. and Gerber Products Co. challenging the companies’ practice of advertising formula directly to mothers, claiming it undermines the practice of breast-feeding.

Many companies facing shareholder resolutions on political and social issues fear the adverse publicity such issues create, even if they have little chance of approval.

Some have negotiated settlements with the sponsors that get the measures off the agenda before the annual meetings.

Amoco Corp., Chevron Corp., Mobil Corp., Texaco Inc. and Waste Management Co., for example, agreed to provide “report cards” on areas covered by the Valdez principles, and the sponsors agreed to withdraw their resolutions.

Fast-food giant McDonald’s Corp., facing a resolution sponsored by church groups challenging its use of Styrofoam packaging, agreed to explore alternatives. The sponsors withdrew their resolution.

“They’re beginning to see the handwriting on the wall, that the environmental movement isn’t going away next year,” said Davidson. “They’re trying to figure out how they’re going to cope with it.”

On the other hand, Exxon, Atlantic Richfield Co. and several other leading industrial corporations declined to make any concessions on environmental resolutions, so they will come to a vote.

Historically, most social resolutions have been defeated easily by large-scale shareholders who support management’s position. But under SEC corporate governance rules concerning annual meetings, a resolution needs only 3% support the year it is introduced to remain on the ballot the following year. The next year, it needs 6 percent of the vote, and 10 percent thereafter.

Of the total resolutions filed this year, a record 250 are likely to come to a vote, a 43% increase over 1989, when 175 of the 214 proposals filed were voted upon, Will said.

Some companies have been particularly singled out this year for what shareholder activists call unacceptable behavior regarding both South African involvement and the environment.

Today, for example, American Cyanamid Co., a worldwide pharmaceutical and pesticide producer, faces what organizers call a massive protest planned for its annual meeting in South Portland, Maine. Two South Africa divestment resolutions are on the agenda.

Activists contend that the company has been dumping mercury contaminants in South Africa, mistreating black South African employees and selling products and services there that strengthen the apartheid system of racial segregation.

“They’re on our strategic companies focus list,” said Diane Bratcher, a spokeswoman for the Interfaith Center, one of the protest sponsors. “What they do is pretty heavy stuff. Toxic dumping, providing strategic chemicals to the gold-mining industry. That makes Cyanamid a pretty worthy target.”

Cyanamid issued a statement Friday rebutting the criticism. It said the mercury waste shipped to South Africa is safely recycled. The company also said it has strictly adhered to the Sullivan principles of racial equality signed by many American corporations that still operate in South Africa.