First-Ever Majority Vote, Tougher Mountaintop Removal Scrutiny, Cancelled Coal Plants Among Highlights
BOSTON, Aug. 24 /PRNewswire/ -- Investors engaging with U.S. and Canadian companies on the financial risks and opportunities from climate change achieved major breakthroughs in the 2009 proxy season, including a first-ever majority vote (51.2 percent) with IDACORP, an electric utility in Idaho, asking it to establish greenhouse gas (GHG) reduction goals. A record 68 climate-related shareholder resolutions were filed by investors this year, of which 31 were withdrawn after the companies agreed to positive climate-related commitments. Six of the 28 resolutions that went to a vote achieved 30 percent or greater support, including one filed with coal company Massey Energy that received 45.6 percent support, or $458.1 million in shares.
Among the key highlights of the 2009 proxy season, with further details being provided below:
- Following a 51.2 percent majority vote in May, IDACORP agreed to adopt GHG reduction goals by year's end, issued its first RFP (request for proposal) for a wind farm and submitted a smart grid proposal to utility regulators;
- Chevron, which investors had placed on a Climate Watch List last spring, agreed in May to develop and disclose a business plan setting an annual GHG emissions reduction target for its operations, and to track emissions from its products;
- NV Energy (formerly Sierra Pacific Resources), after agreeing to provide expanded disclosure of its strategy to address climate change, announced it would increase its renewable energy generation and abandon a 1,500-megawatt coal plant;
- Citigroup agreed to establish a due diligence process for mountain top removal (MTR) coal mining related loans and to consider shareholder input in the development of that process; and
- Pulte, the nation's largest homebuilder, agreed to establish quantitative emissions reduction goals for its operations.
"Investor pressure is prompting more companies to see the value of making their businesses more climate-friendly," said Mindy S. Lubber, president of Ceres, a leading coalition of investors and environmental groups that helped coordinate this year's shareholder filings along with the Interfaith Center on Corporate Responsibility (ICCR). "By measuring and lowering the carbon footprint of their operations and products, these companies will have a distinct advantage as the global economy shifts to cleaner energy sources."
"This type of action reflects a growing corporate awareness of the value that addressing climate change issues adds to a company's long-term growth prospects, particularly considering the reality of climate change's effects on the way we do business going forward," said CalSTRS Chief Executive Officer Jack Ehnes. "Encouraging our portfolio companies to take on climate change challenges will position them to succeed in tomorrow's business environment and that benefits California's educators."
"I am very pleased with the progress that my office, on behalf of the New York City Pension Funds, and other institutional investors have made in placing assessment and disclosure of the risks posed by global warming on the agenda of companies, particularly those in the energy industry," said New York City Comptroller William C. Thompson, Jr. "As fiduciaries, we are obligated to diligently pursue efforts to ensure that the risks of global warming are adequately assessed, disclosed, and mitigated across all investments in our Funds' portfolios, and to capitalize on related investment opportunities."
"As U.S. and global policy initiatives progress, shareholders are grateful to see a more sustainable, long-term business plan in the midst of carbon constraints nationally and internationally. A concise strategy with clear reduction goals for both operations and products offers investors confidence in this time of volatility in both the oil and gas and financial sectors," said Sister Patricia Daly of the Sisters of St. Dominic of Caldwell, New Jersey, the lead filer on the withdrawn Chevron resolution.
"The game-changing majority vote at IDACORP shows that investors want companies to do more to address climate change," said Michael Passoff, Associate Director for As You Sow, the lead filer on the IDACORP resolution. "It is the first environmental resolution to get a majority vote in 30 years of shareholder activism."
The 2009 global warming resolutions sought increased energy efficiency, as an important driver of bottom-line savings for companies; GHG emissions reductions; and greater disclosure from companies on their strategies for addressing climate-related risks and opportunities. The resolutions were filed by state and city pension funds, foundations, and religious, labor and other institutional shareholders. The filers collectively manage more than $300 billion in assets.
Of the 68 resolutions filed, a record 31 resulted in company agreements and withdrawal of the resolutions. Twenty-eight resolutions went to a vote at this year's corporate annual meetings; six resolutions were omitted by the SEC and three failed to reach a vote for technical reasons.
Financial analysts are increasingly supporting climate-related resolutions. RiskMetrics Group (RMG) supported at least 21 resolutions (75 percent of the resolutions that went to vote) and PROXY Governance, Inc. (PGI) supported 15 resolutions (53.6 percent). A third key financial analyst of shareholder resolutions in the U.S., Glass Lewis, however, opposed all climate-related resolutions tracked by Ceres.
Investors also filed resolutions with 27 companies asking them to provide company-specific sustainability reports detailing how they are managing environmental, social, and governance (ESG) issues beyond climate change. Overall this proxy season, more than a dozen companies have committed to producing a first-time sustainability report.
For more details on company agreements, see Highlights from the 2009 Climate Change Proxy Season: http://www.ceres.org/Page.aspx?pid=1121.
About Ceres
Ceres is a leading coalition of investors and environmental groups working with companies to address sustainability challenges such as climate change. Ceres also directs the Investor Network on Climate Risk, an alliance of 80 institutional investors with collective assets totaling more than $7 trillion. www.ceres.org, www.incr.com
About ICCR
For 35 years, the Interfaith Center on Corporate Responsibility has been a leader of the corporate social responsibility movement. ICCR's membership is a coalition of nearly 300 faith-based institutional investors representing over $100 billion in invested capital. ICCR-member religious institutional investors sponsor over 200 shareholder resolutions on major social and environmental issues. (http://www.iccr.org)
