Nun remains a faithful critic of the sins of corporations

For years, sister has been fighting `heresies, untruths of capitalism'

August 07, 2002|By Amy Cortese | Amy Cortese,NEW YORK TIMES NEWS SERVICE

While politicians and even chief executives make righteous speeches and advocate tougher penalties for corporate misdeeds, Sister Patricia Daly is smiling. For three decades, she has been quietly forcing changes her own way. Or perhaps not so quietly.

Daly, 45, a Dominican nun and member of the Interfaith Center for Corporate Responsibility, leads its efforts to make corporations more liable financially for damage to the environment and climate changes from global warming. Operating frequently from the group's headquarters on the Upper West Side in Manhattan, in a square building known as "the God Box," Daly spends her days meeting with corporate executives, drafting shareholder resolutions and trying to put pressure on large corporations such as Exxon Mobil and General Electric.

To Daly, her activism is more than socially responsible investing or missionary work. "Being a faithful member of a religious tradition doesn't always mean just showing up for services on a Saturday or Sunday," she said. "It means being engaged."

Shareholder anger over scandals at Enron, Global Crossing, WorldCom, Adelphia Communications and the like have, in an odd way, been like manna from heaven for what she considers the broader cause of making corporations better citizens through shareholder activism. Not only were a record 721 shareholder resolutions filed this year, of which the Interfaith Center sponsored 144, but shareholders also voted for them in record numbers. Daly said she was particularly excited about gains made by resolutions that ask companies to report on their greenhouse gas emissions and what they are doing to curb them.

An unprecedented 20 resolutions addressed climate change this year. More than 28 percent of shareholders at Eastman Chemical and 27 percent at American Standard supported them. At Exxon Mobil, 20 percent of shareholders voted in favor of two resolutions, one asking the company to reduce emissions and the other to disclose the cost of delays in toxic chemical cleanups. Daly considered that a major victory. "It's a real warning to them," she said. Although the resolutions did not pass, they will automatically remain on the annual-meeting agenda.

Long tradition

Daly's influence comes from the Interfaith Center's $110 billion in combined assets, mainly the pension funds of ministers, priests and nuns among its 275 religious organization members. The assets include substantial holdings in many large corporations.

In the boom years, "the treasury of my parish was certainly happy to see 25 percent returns," she said. But her attitude is that, as shareholders, "we're part of the problem here."

Daly views her work as following in the tradition of the Dominican order, founded in the 13th century by St. Dominic to fight heresies and untruths. "We're dealing with some of the heresies and untruths of capitalism," she said.

But some critics counter that she has been too quick to accept environmentalist positions.

"I respect what the sister is doing because that is what she believes," said Frank Maisano, an energy consultant and former spokesman for the Global Climate Coalition, an energy industry group that disbanded after having successfully lobbied against Senate ratification of the Kyoto Protocol on greenhouse emissions. "But I think she is somewhat misled at times by colleagues in the environmental community because they are somewhat less than honest about what industry is doing."

Others give grudging praise. "Although we disagree with Sister Pat on her issues, she appears to be a dedicated activist and I'm sure we will have further discussions on Exxon Mobil's position," said Patrick Mulva, Exxon Mobil's vice president for investor relations.

CEOs confronted

Daly is known for tangling with chief executives at shareholder meetings. In an exchange with John F. Welch Jr. of General Electric in 1998, she challenged his resistance to taking responsibility for PCB pollution from GE factories in New York's Hudson Valley. Daly compared Welch's stance on PCB's - chemicals also known as polychlorinated biphenyls - to that of tobacco executives who once swore that cigarette smoke was harmless.

Welch called Daly's contention "outrageous" while she continued peppering him with well-informed questions until he abruptly moved on to the next agenda item - a rare retreat for one of America's best-known corporate chiefs.

"CEOs sometimes have a difficult time dealing with Pat," said Seamus Finn, a colleague at the Interfaith Center.

Timothy Smith, senior vice president and director for social responsibility at Walden Asset Management, a money management firm, said Daly has an unusual ability to win allies from unlikely corners.

"It takes a certain amount of skill to speak the language of different constituencies from Greenpeace to the State of New York to corporate boardrooms," Smith said. For example, Daly met Bianca Jagger on the eve of a BP shareholder meeting in London and piqued her interest in organizing a boycott of Esso, a European subsidiary of Exxon Mobil, because of the company's position on global warming. Jagger then worked with Greenpeace on the Stop Esso campaign in Europe.

Daly grew up in Brooklyn and Queens and moved to Connecticut in her teens. She became a corporate activist in the '70s as a new member of the Sisters of Saint Dominic of Caldwell, N.J., campaigning against corporate labor practices and apartheid.

"When I entered, I knew nothing about being involved with corporations," she said.

Smith recalled a shareholder meeting in the 1970s for J.P. Stevens, a textile company accused by organized labor of anti-union behavior. "Pat was a novice. She appeared in full nun garb."

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