Shareholder Advocacy:

Green Century Balanced Fund Proxy Voting Policies



Introduction

The policies set forth in this document apply to proxy votes cast by Green Century Capital Management, Inc. (Green Century) on behalf of the Green Century Balanced Fund (the Fund). Green Century, the investment adviser to the Fund, votes all proxies relating to the Fund's ownership of shares of stock in the companies in the Fund's portfolio. In voting these proxies, Green Century is guided by the policies described here. These policies do not discuss every issue on which the Fund may be asked to vote, and there may be occasions when Green Century believes that a vote that does not adhere strictly to these policies is in the best interests of the Fund and the Fund's shareholders. In these cases, Green Century will vote the Fund's shares in accordance with its view of the best interests of the Fund's shareholders.

Environmental Issues

Green Century believes that environmental issues are the most critical issues facing our nation and our world in the twenty-first century. Our focus is on the environment and the role that we can play to protect it. Green Century will, on behalf of the Fund, vote proxies in favor of resolutions designed to address and resolve environmental problems. In addition to voting the Fund's proxies in support of environmental protection, Green Century conducts shareholder advocacy campaigns to promote corporate environmental responsibility. Below are the primary environmental issues that are frequently raised in shareholder resolutions and a discussion of how Green Century will vote on these issues on behalf of the Fund.

Energy and Natural Resource Conservation
America's prosperity has resulted largely from the extraordinary abundance of water, wood, oil, and other natural resources our country enjoys. But the enormous environmental cost of extracting and consuming these resources can be measured in scarred landscapes, brown clouds and overflowing garbage dumps. Our breakneck rate of consumption has earned us the moniker "the throwaway society;" it has also led experts to predict a day of reckoning in the foreseeable future, when demand outstrips the supply of many of our natural resources. Green Century advocates for the sustainable use of our natural resources. We call for the development of clean, renewable energy. We support conservation and efficiency, reuse and recycling, and other policies to ensure quality of life not just for ourselves, but for generations to come. Green Century will encourage the conservation of our natural resources by voting the Fund's proxies as described below. When given the opportunity to vote on other conservation issues, Green Century will choose to vote in whatever way supports resource conservation.

Climate Change: Green Century will vote the Fund's proxies to support resolutions requesting that a company disclose information on the environmental and financial risks of climate change, as well as resolutions requesting that a company take action to reduce its impact on the global climate.

Renewable Energy and Energy Efficiency: Green Century will vote the Fund's proxies to support resolutions encouraging a company to increase its investments in renewable energy and energy efficiency.

Product Responsibility: Shareholders have asked companies to take responsibility for the environmental impact of their products throughout their lifecycle, including reducing the toxic substances used to make products, and assisting in and promoting the recycling of products. Green Century will vote the Fund's proxies to support resolutions in these areas.

Use of Recycled Materials: Green Century will vote the Fund's proxies to support resolutions that request a greater use of recycled content in a company's products, and the greater use of recycled paper overall.

Public Health
Clean air, clean water and safe food are the most basic necessities of a healthy life. Yet, from "The Jungle" of Upton Sinclair to Love Canal, corporations and the government have a long track record of gambling with the public's health. Green Century supports action to protect the public from threats to the purity of our air, water and food, including the elimination of dangerous chemicals and practices and the cleanup of areas that have been contaminated with dangerous pollutants. Green Century also pressures industry to find safer ways of doing business in order to prevent future pollution. Green Century will promote public health protections by voting the Fund's proxies as described below. When given the opportunity to vote on other public health issues, Green Century will vote to support public health protections.

Toxics: Green Century will vote the Fund's proxies to support resolutions asking a company to reduce the use of toxic chemicals in its products.

Toxic Waste Sites: Green Century will vote the Fund's proxies to support resolutions that encourage a company to report on areas that it has contaminated with toxic waste, including Superfund sites and brownfields, and to take responsibility for cleaning up those sites.

PVC Plastics: Polyvinyl chloride (PVC) plastics have been linked to cancer and other debilitating illnesses. Green Century will vote the Fund's proxies to support resolutions that seek the elimination of the use of PVC.

Mercury: Green Century will vote the Fund's proxies to support resolutions that seek the elimination of the use of mercury in consumer and medical products.

Genetically Engineered (GE) Foods: Green Century will vote the Fund's proxies to support resolutions requesting that a company report on and reduce its use of GE ingredients, as well as resolutions asking for the labeling of such foods.

Preservation Issues
The natural environment is the ecological bedrock on which all life depends. Yet from the extinction of species to the vanishing wilderness, the pursuit of short-term gain has come at a terrible cost to our natural heritage. Green Century supports the preservation of our environment - for its own sake, for its ecological value, and for the inspiration and wonder it provides for the world's people. Green Century supports the protection of natural ecosystems, large and small, around the world, as well as the endangered and threatened species that need them to survive. Green Century will help to preserve our environment by voting the Fund's proxies as described below. When given the opportunity to vote on other preservation issues, Green Century will choose to vote in whatever way supports the preservation of our wilderness and public lands.

Arctic National Wildlife Refuge and other wilderness areas: Green Century will vote the Fund's proxies to support resolutions asking a company not to conduct destructive operations, such as oil drilling or mining, in these areas.

Ancient Forests: Green Century will vote the Fund's proxies to support resolutions that promote the elimination of sales of wood from ancient forests.

Sprawl and Open Space: Green Century will vote the Fund's proxies to support resolutions that demand that a company not unnecessarily destroy or develop open spaces and wilderness areas.

Tobacco Issues

The tobacco industry has created an environmental and public health disaster. Almost 5 million people die each year from tobacco-related illnesses. Green Century believes that the industry must take responsibility for the production, marketing, and distribution of its products so that consumers, especially children and non-smokers, are not harmed. Green Century will help to bring about this change by voting the Fund's proxies as described below. When given the opportunity to vote on other issues in this area, Green Century will choose to vote in whatever way supports responsible tobacco industry policies. Green Century will, on behalf of the Fund, support resolutions which aim to limit or eliminate tobacco sales, use and advertising.

Sales to Minors: Green Century will vote the Fund's proxies to support resolutions that call on retailers to stop selling cigarettes and resolutions that ask retailers to ensure that they are not selling tobacco products to minors.

Smoke-Free Policies: Green Century will vote the Fund's proxies to support resolutions that encourage restaurants and other businesses to adopt smoke-free policies.

Tobacco Advertising: Green Century will vote the Fund's proxies to support resolutions that request that media companies report on the effects of tobacco advertising and that encourage restrictions on such advertising.

Corporate Governance Issues

The name Enron has become synonymous with poor corporate governance. But the problems that brought down Enron are much broader and deeper than the scandals that have plagued all too many of this country's largest companies in recent years. When corporations are not controlled by a strong system of democratic corporate governance, they are then able to ignore the best interests of their shareholders. This betrayal of shareholders' best interests harms not only the shareholders but also other stakeholders such as the company's employees, the general public, and the environment. Green Century believes that a strong system of democratic corporate governance is necessary to protect investors and other stakeholders from corporate mismanagement and malfeasance. Green Century will help to bring about needed reforms by voting the Fund's proxies as described below. When given the opportunity to vote on other issues in this area, Green Century will choose to vote in whatever way supports more democratic corporate governance policies.

General
Management Compensation and Environmental and Social Performance: Green Century will vote the Fund's proxies to support resolutions that request reports on the link between executive compensation and a company's record on environmental and social issues.

Director and Executive Compensation: Green Century will vote the Fund's proxies to support resolutions that request a report on director and executive compensation, as well as resolutions that would require policies to restrict compensation to reasonable levels.

Auditor Independence: Green Century believes that auditors who provide non-audit-related services, other than tax services, to a company could have a conflict of interest. Therefore, Green Century will vote the Fund's proxies to support the re-appointment of a company's auditor only if the auditor did not receive any non-audit-related fees, excluding fees related to tax services, from the company in the previous year. Also, Green Century will vote the Fund's proxies to support resolutions that encourage companies to have only audit-related services and tax services provided by the company's auditor.

In-Person Annual Meetings: Some companies have lobbied for the right to replace in-person annual meetings with meetings held via the Internet. Green Century believes that this practice would limit shareholder democracy; thus, Green Century will vote the Fund's proxies to support resolutions asking companies to commit to continuing to hold in-person annual meetings.

Political Contributions: Green Century will vote the Fund's proxies to support resolutions encouraging a company to cease contributing to political parties or partisan activities.

Boards of Directors
Green Century will, on behalf of the Fund, support resolutions designed to enhance the independence and diversity of boards of directors and, where possible, to encourage concern for corporate environmental responsibility among the members of a board of directors.

Candidates for Director: Green Century will vote the Fund's proxies to support only those candidates who, to the best of Green Century's knowledge, have a demonstrated commitment to the environment. Green Century will, on behalf of the Fund, oppose all other candidates.

Staggered or Classified Boards: Some companies stagger the terms of their directors; thus, all directors are not up for election each year. Green Century believes this practice limits opportunities for shareholder democracy; thus Green Century will vote the Fund's proxies to support resolutions that would eliminate staggered boards.

Cumulative Voting: This practice allows shareholders to cast all of their director votes for one candidate. Green Century believes cumulative voting aids in the election of truly independent directors to a company's board. Thus, Green Century will vote the Fund's proxies to support resolutions to allow cumulative voting.

Independent Boards: Green Century will vote the Fund's proxies to support resolutions that require a majority or more of a company's directors be independent of the company.

Independence of Committees: Green Century will vote the Fund's proxies to support resolutions that require that audit, compensation, and nominating committees of directors be filled exclusively with independent directors.

Diversity of Board: Green Century will vote the Fund's proxies to support resolutions encouraging companies to adopt policies to promote a diverse slate of board of directors' candidates.

Corporate Structure
Employee Stock Ownership Plans (ESOP's): Green Century will vote the Fund's proxies to support resolutions to create and maintain these plans as a means of fostering employee ownership.

Stock Option Plans: Green Century will vote the Fund's proxies to support stock option plans only if at least 90% of the options granted under the plan are granted to non-executive level employees.

Stock Issuance: Green Century will vote the Fund's proxies to support the issuance of stock of a company unless Green Century has reason to believe that the company's investment banker has a conflict of interest or the issuance is designed to thwart a takeover bid.

Reporting and Disclosure of Information Issues

Public disclosure of information is fundamental to this country's financial system. Investors who are armed with accurate and complete information about a company can hold that company accountable for its performance. Unfortunately, all too often companies do not disclose significant risks that their business faces, especially when these risks concern environmental and social issues. Green Century believes that investors and the general public are entitled to information relating to a company's performance in all areas, including environmental and social impacts of a company's operations. Green Century supports further regulatory action to require that public companies disclose risks relating to environmental and social issues. Green Century will help to support greater disclosure by voting the Fund's proxies as described below. When given the opportunity to vote on other issues in this area, Green Century will choose to vote in whatever way supports disclosure of information.

Environmental Reports: Green Century will vote the Fund's proxies to support resolutions requesting that a company disclose information on the company's programs or activities regarding the environment.

Standards of Conduct: Green Century will vote the Fund's proxies to support resolutions that request that a company report on and develop policies to regulate their conduct overseas, especially regarding their environmental impact.

Standards for Vendors: Green Century will vote the Fund's proxies to support resolutions that request that a company report on and develop policies to regulate the conduct of its vendors, suppliers, and contractors overseas, especially regarding their environmental impact.

Natural Resource Extraction in Developing Countries: Green Century will vote the Fund's proxies to support resolutions that request a report on the impact of natural resource development on the environment and on indigenous populations.

CERES Principles: Green Century will vote the Fund's proxies to support resolutions asking a company to adopt the CERES Principles.

Fair Lending Practices: Green Century will vote the Fund's proxies to support resolutions requesting that a company report on the potential results of adopting fair lending practices, including prohibitions on redlining and on predatory or discriminatory lending.

Excessive Drug Prices: Green Century will vote the Fund's proxies to support resolutions requesting that a company report on policies that would ensure that consumers are charged a reasonable price for prescriptions medications.

Equal Employment and Affirmative Action Reports: Green Century will vote the Fund's proxies to support resolutions that request a report on issues relating to equal employment opportunity and affirmative action programs.

Discrimination based on Sexual Orientation: Green Century will vote the Fund's proxies to support resolutions that request that a company report on its reasons for not adopting policies to prohibit discrimination based on sexual orientation.

Pay Equity: Green Century will vote the Fund's proxies to support resolutions requesting that a company disclose pay comparisons between its women and minority employees and other employees to ensure that all employees are fairly compensated.

Miscellaneous Issues

Green Century will vote the Fund's proxies on a case-by-case basis on any other issues that may arise for which a policy has not been specified.

 

For More Information, contact Green Century at 1-800-93-GREEN, or email info@greencentury.com.

 


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