Napa – Harrington Investments, Inc. (HII), a socially responsible investment (SRI) advisory firm announced today that it and its subadvisor, Zurich-based Everest Asset Management, have divested of over 17,000 shares of Spain-based Gamesa Corporation.
“In accordance with our long term investment management style, we would prefer to remain invested in an alternative energy company such as Gamesa,” said John Harrington, President and CEO of Harrington Investments. “However, we have a fiduciary duty to our clients to screen companies that not only show a strong commitment to their communities, but also invest in companies that respond to shareholder concerns, both of which Gamesa failed to do.”
In a letter to Gamesa’s Corporate Investor Office, Everest Asset Management, an international investing partner with Harrington, expressed concern that their wind farms located in Oaxaca, Mexico were reportedly paying below market rates to impoverished land owners for the use of their land. Through local sources in Mexico as well as through a Santa Cruz, California-based NGO, information regarding the situation indicated that Gamesa was taking advantage of impoverished farmers and other indigenous people by providing minimal compensation for the use of their land. HII was informed that the going rate on royalties paid for electricity generated in most of Europe, China and the U.S is approximately 10%. In these communities of Mexico they are being paid a 1% royalty from the turbines on their property.
Gamesa responded in a terse letter, devoid of any specific information regarding action being taken by the company to address the concerns of the communities in Mexico. Gamesa stated that the amounts paid to the owners “are aligned with the ones paid in other geographical areas,” which was at odds with information provided by other sources.
For over a year, Everest Asset Management and HII representing shareholders, attempted to get additional and more detailed information from the company on the situation in Oaxaca, Mexico. “Sadly, Gamesa was not at all forthcoming with information regarding their policies in working with local communities in Mexico. If a portfolio company can’t be totally transparent as well as communicate with shareholders, the company’s owners, it doesn’t deserve our financial support. The fact that Gamesa has recently sold its interests in the Oaxaca wind farm does not alleviate our concern.” Harrington concluded.
Harrington Investments, Inc. is a 28 year-old Napa, California-based socially responsible investment advisory firm that manages assets of individual and institutional investors requiring social and environmental as well as financial portfolio performance. Everest Asset Management (EAM) is a Zurich-based asset manager with decades of experience enhancing the wealth of private and institutional investors. HII and EAM have been collaborating together on socially responsible investing since 2004. They have created the first overseas investment advisory service offering SRI to social investors looking to increase their exposure to European and Asian markets.