Shareholders Press Companies on Climate Change

by kespeland on March 17, 2008


Publicly traded companies hold annual meetings not only to discuss their performance but also to ask shareholders to vote on company business. Often that business includes proposals or resolutions from shareholders themselves, calling on a company to change certain practices or address an issue. This year, shareholders filed a record 54 resolutions asking companies respond to climate change, some of which may come up for a vote at annual meetings this spring. One of those comes from the Louisville-based headquarters of the Presbyterian Church of the United States. Reverend Bill Somplatsky-Jarman oversees the organization’s nearly 2 billion dollars in assets under management. He says he hopes their shares in ConocoPhillips will sway the energy giant to do more to reduce greenhouse gas emissions.

Our goal is to work with a company to help them see the benefit of being forthright in addressing global climate change. We’ve had success with other companies in doing that, and we hope, we were hoping ConocoPhillips would have a similar response.”

But Somplatsky-Jarman says company executives have declined to meet with him to discuss the proposal. The resolution asks ConocoPhillips first to adopt specific goals for reducing greenhouse gas emissions from their products and operations. But Somplatsky-Jarman wants the company to look even further ahead.

And then to begin planning for what are the implications for them as a fossil fuel-based company basically for living in a carbon-constrained world, which is going to come about as we try to address climate change.”

Trillium Asset Management also has a pending environmental resolution with ConocoPhillips. But the ability to win a majority of shareholder votes on this and the Presbyterian Church’s resolution seems shaky. Shareholders voted down two environmental resolutions on the ballot last year. Still, Rob Berridge with the socially responsible investors’ coalition Ceres says this shareholder activism isn’t just about curbing global warming. It’s about ensuring a steady, profitable return. Berridge gives this example:

If you’re a coal company in the United States and you’re not preparing for the transition to a low carbon economy, investors have reason to worry about the long-term prospects for your business.

His organization oversees the Investor Network on Climate Risk, which tries to help investors and businesses get a handle on the financial risks and opportunities climate change creates. The networks 60 major investors manage more than a whopping $5 trillion dollars in assets, collectively. But are resolutions really making any verifiable difference? Rob Berridge cites the electric power industry. Investors filed several resolutions with electric companies and several, he says, have already been agreed to –without going up for a vote.

The investors this year asked the companies to report on how they’re working with the people who regulate the electric utilities to allow the utility to implement energy efficiency programs, and to allow the utility to get paid for that work. So the shareholders of the utility can get rewarded even if the utility is selling less power.”

Berridge says most resolutions this proxy season have to do either with getting companies to set quantifiable goals for reducing emissions or to disclose the financial risks they face because of climate change. And he says there’s an ongoing discussion with the Securities and Exchange Commission to require that kind of disclosure.

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