Investors filed an unprecedented number of shareholder resolutions during the 2010 proxy season, pressing companies to boost their attention to the risks and opportunities posed by climate change.
Investors filed a record 101 climate and energy-related resolutions with
88 U.S. and Canadian companies, which is nearly 50% higher than
last year, according to the advocacy group Ceres.
Key results included majority votes at coal mining company Massey Energy (NYSE: MEE) (53.1%) and water infrastructure services company Layne Christensen (Nasdaq: LAYN)(60.3%).
A record 51 resolutions were withdrawn after the companies agreed to positive climate change and energy-related commitments. A resolution with Ohio-based FirstEnergy (NYSE:FE) was withdrawn after the company committed to use dry coal ash storage, and a resolution with Procter & Gamble (NYSE: PG) was withdrawn after the company agreed to report on the percentage of sustainably sourced palm oil procured on an annual basis, beginning next year. Traditional palm oil production frequently involves burning large areas of rainforest and is a major contributor to global greenhouse gas (GHG) emissions.
Sixteen of the 42 resolutions that went to a vote achieved 30% or greater support, nearly three times the number that achieved that level of support in 2009.
”The BP spill is only the latest reminder of why investors are ratcheting up their attention to climate and other environmental risks across their portfolios,” said Mindy Lubber, president of Ceres, a national coalition of investors and environmental groups that helped coordinate this year’s shareholder filings with the Interfaith Center on Corporate Responsibility (ICCR). “This year’s record results send a powerful message that companies should boost their attention to these issues.”
“If our portfolio companies are to provide long-term shareowner value, they need to be proactive, not reactive, in addressing climate change and other ESG matters,” said CalSTRS CEO Jack Ehnes. “The excessive focus on short-term profits at the expense of all else has proven disastrous and has led to widespread financial issues. But this proxy season’s record-breaking results is an encouraging sign that investors and companies are paying increasing attention to long-term drivers of value.”
CalSTRS, the nation’s second largest public pension fund, manages $132 billion in assets and filed several resolutions this year, including the ConocoPhillips (NYSE: COP) oil sands proposal and the Chesapeake Energy (NYSE: CHK)resolution.
Key highlights of the 2010 proxy season:
- First-ever resolutions on coal ash risks, filed by As You Sow, received high votes at CMS Energy (NYSE: CMS) (43.1%) and MDU Resources Group (NYSE: MDU) (40.5%).
- TJX (NYSE: TJX) agreed to ramp up its climate and sustainability-related efforts, including producing a full sustainability report by 2011, disclosing its climate risks and creating a U.S. green team whose sole purpose is to improve the MA company’s sustainability performance. TJX acted in response to several years of dialogue with investors and a resolution filed this year by Newground Social Investment.
- A majority (53.1%) of Massey Energy shares were voted in favor of a measure filed by the New York City’s Comptroller’s Office calling for an adoption of quantitative goals for reducing GHG emissions. The vote was one of the highest ever for a climate-related shareholder proposal, and came after an April mining disaster that killed 29 miners in West Virginia. (Massey reported the vote as 36.8% in favor because it included 20.9 million abstaining votes as votes against the resolution. The resolution got 25.1 million votes in favor and 22.2 million votes against.)
- A majority of Layne Christensen shares (60.3%) were voted in support of a resolution requesting that the company issue a report on environmental, social and governance (ESG) issues, including water management and its GHG emissions. The resolution was filed by Walden Asset Management.
- A resolution filed by Calvert Investments with grocer Kroger (NYSE: KR) garnered 40.7% support. The resolution asked Kroger to issue a report on how the company will assess and manage the impacts of climate change on the corporation, specifically with regards to its supply chain. The high vote demonstrates shareholder concern about climate risk even at companies that are not major direct GHG emitters. It also shows that the climate disclosure guidance issued by the SEC in February parallels the type of disclosure investors are seeking from companies.
This year’s climate 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.
For more information on the resolutions, download the 2010 Resolutions Tracker at the link below.
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