The 2011 proxy season is shaping up to be a major one for environmental activists
Shareholders have filed a record 66 resolutions on climate and energy issues so far this proxy season, a new study shows.
Investors at companies in the coal, electric and oil sectors filed 41 resolutions, up 50 percent on the number of environmental resolutions filed at such companies last year, according to Ceres, a Boston-based public interest coalition that addresses sustainability challenges.
The resolutions revolve around issues that can have an impact on business transactions now and in the future. They concern companies’ analysis of the financial risks associated with water scarcity and pollution, as well as firms’ production of sustainability reports. They also address the sourcing of sustainable palm oil and the use of renewable energy.
‘Adjusting to a world profoundly shaped by climate change is a key challenge for all leading companies,’ says Mindy Lubber, president of Ceres. ‘Ensuring investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is essential.’
The recent surge in climate-related concerns takes place as the US’ Environmental Protection Agency (EPA) and other groups push for greenhouse gas regulation. ‘Investors see climate risks as getting more serious – for example, shareholders would like to know what companies’ plans are in light of these looming regulations,’ says Rob Berridge, senior manager of investor programs at Ceres.
Last week, the EPA established its Clean Air Act Standards for boilers and incinerators in an effort to reduce toxic air emissions. ‘The EPA is certainly gearing up to regulate the flow of carbon dioxide in the US; this is also a requirement of the Supreme Court,’ adds Berridge.
At the same time, high-profile disasters – such as the BP oil spill and the Massey Energy mine explosion in West Virginia that killed 29 people – have caused shareholders to home in on the strategies companies are using to manage business risks.
‘Investors are motivated to see their companies prepare for the future,’ explains Berridge. ‘So they are filing a lot of resolutions that ask companies about their risks and their techniques to address them. Pollution is a form of waste and, if you are not energy-efficient, you let other companies become leaders in the future.’
Of the 66 resolutions filed so far, 12 have been withdrawn after companies made promises to tackle climate change in response to the resolutions.
Companies hit by climate and energy-related resolutions include Dominion, Dynergy, Massey Energy, Southern and Xcel. Companies where shareholders have called for sustainability measures include Amazon, Avon, Dr Pepper Snapple, SunTrust Banks and Time Warner.
This article was originally published by Corporate Secretary, IR magazine’s sister publication.
