Investors File a Record 95 Climate Change Resolutions, 40 Percent Increase Over 2009 Proxy Season
BOSTON — Leading U.S. investors announced on March 4, that they have filed a record 95 climate change shareholder resolutions with 82 U.S. and Canadian companies that face far-reaching business challenges from climate change. The 40 percent increase in resolutions filed over last year is a first sign of the growing pressure on companies to disclose climate risks and opportunities in the wake of the recent Securities and Exchange Commission’s climate disclosure guidance and other recent policy developments.
Companies targeted in the 2010 proxy season include some of the nation’s largest coal companies, electric power and oil producers; home builders; big box retailers; financial institutions and other businesses that investors believe are not adequately disclosing and managing potential climate-related business impacts.
To view a complete list of the climate-related resolutions, CLICK HERE
Many of the resolutions filed aim directly at core materiality issues that were the foundation for the SEC’s new interpretive guidance on climate disclosure. Resolutions were filed with ExxonMobil and ConocoPhillips asking them to report on regulatory, legal and reputational risks, as well as environmental impacts, from their extensive Canadian oil sands operations. Both companies are spending many billions of dollars on oil extraction in Canada, which faces a slew of regulatory and legal challenges both in the U.S. and Canada. Oil sands production typically has a significantly higher carbon footprint compared to traditional oil production.
Other shareholder resolutions seek disclosure from electric utilities on their plans for adopting greenhouse gas reduction goals in anticipation of expected carbon-reducing regulations.
The resolutions were filed by many of the nation’s largest public pension funds, as well as labor, foundation, religious and other institutional investors. Many of the investors are part of the Investor Network on Climate Risk (INCR), an alliance of more than 80 institutional investors with collective assets totaling more than $8 trillion.
“We want our companies to closely look at the impact climate change legislation and regulation have on them, to realistically assess those risks, and to consider the indirect consequences of climate change-driven regulation and business trends on their activities,” said Jack Ehnes, CEO of CalSTRS, which manages $131 billion dollars in assets. “The SEC’s interpretive guidance outlines exactly the kind of action we have been asking our portfolio companies to take with regards to the issues raised by climate change. It fits with our role as a long-term investor focused on providing lasting value for the educators of California and their families.”
“As the SEC recently affirmed with its disclosure guidance, climate change presents clear material risks and opportunities for U.S. businesses – and investors have a right to know which companies are well prepared and which are not,” said Mindy S. Lubber, president of Ceres, which helps coordinate the shareholder filings.
The SEC issued new interpretive guidance Jan. 27 that clarifies what publicly-traded companies need to disclose to investors in terms of climate-related material effects on business operations, whether from new carbon-reducing regulations in the U.S. and abroad, the physical impacts of changing weather or business opportunities associated with the growing clean energy economy. More than 50 investors managing $2.1 trillion in assets sent a letter to the SEC yesterday re-affirming their support for the SEC climate guidance.
To read letter, CLICK HERE
Other recent policy developments further bolster investors’ requests for increased disclosure, including the Environmental Protection Agency’s new mandatory greenhouse gas (GHG) reporting rule requiring some 10,000 facilities that are large sources of GHGs to report those emissions to the EPA, beginning data collection on January 1, 2010.
The U.S. House of Representatives passed strong climate and energy legislation in June 2009 that caps greenhouse gas emissions, and Senators Kerry, Lieberman and Graham are working to produce a bipartisan climate bill for Senate consideration within weeks. The EPA is also moving forward with issuing regulations on greenhouse gas emissions for automobiles and certain industrial sectors.
“Investors cannot remain silent to the threats of global climate change, which has the potential to negatively impact businesses and their long-term profitability. The New York State Common Retirement Fund wants the companies it invests in to more clearly assess and better manage the far-reaching risks of climate change,” said New York State Comptroller Thomas P. DiNapoli.
“After decades of responding to shareholder concerns, corporations today are faced with new rules demanding transparency around risk, as well as new opportunities for growth in a green economy,” said Sister Barbara Aires of the Sisters of Charity of St. Elizabeth, a member of the Interfaith Center on Corporate Responsibility (ICCR), which also helps coordinates the shareholder filings.
Investors have made significant progress with companies, successfully negotiating 28 withdrawals thus far this year after the companies made specific commitments in response to the resolutions. A resolution seeking a report responding to rising pressure to reduce carbon emissions was withdrawn from the now-merged coal companies Alpha Natural Resources and Foundation Coal, for a first-ever withdrawal from a coal company. Resolutions concerning rainforest sustainability and deforestation issues were withdrawn with International Paper and Weyerhaeuser. A resolution seeking a report on legal and regulatory risks of First Nation opposition to a major pipeline project in the Canadian oil sands region was withdrawn with Enbridge.
For a full list of withdrawels, CLICK HERE
Ceres is a leading coalition of investors, environmental groups and other public interest groups working with companies to address sustainability challenges such as global climate change. Ceres also directs the Investor Network on Climate Risk, a network of 80 institutional investors with $8 trillion of collective assets focused on the business impacts of climate change.
Source: Ceres
