A record 43 climate-related shareholder resolutions have been filed with U.S. companies this year to date, and so far 15 have led to “positive” actions by ConocoPhillips, Anadarko Petroleum Corp., Allegheny Energy and TXU Corp., according to Ceres, a national network that works with companies and investors to address sustainability challenges.
Resolutions that went to a vote by shareholders received record-high average voting support of 21.6%, including 39.5% for support of a resolution filed with Allegheny Energy — the highest ever on a global warming shareholder resolution.
The first half of this year’s proxy season also was marked by the first-ever filing of seven resolutions requesting that companies set specific greenhouse gas (GHG) reduction targets from their operations and products.
“It’s clear from these results that growing investor pressure is prompting more U.S. companies to tackle climate change more aggressively,” said Ceres President Mindy S. Lubber. “Many insurers, banks, builders and power companies are boosting their attention to the risks and opportunities from climate change,” but she noted that some companies, “including ExxonMobil, are still not responding adequately.”
The 43 resolutions, seeking more disclosure from companies on their responses and strategies to address climate-related business trends, were filed by state and city pension funds and labor, foundation, religious and other institutional shareholders. The filers collectively manage more than $200 billion in assets.
Of the resolutions that were filed, 15 were withdrawn by shareholders after companies responded “positively” to their requests, Ceres noted. Another 15 went to a vote at corporate annual meetings. The remaining resolutions were either omitted by the Securities and Exchange Commission or were withdrawn by shareholders because of technicalities.
In the oil and natural gas sector, a resolution before ConocoPhillips was withdrawn by Trillium Asset Management and the North Carolina state treasurer after the Houston-based producer announced its support for “an aggressive mandatory federal policy to reduce GHG emissions; committed to spend $300 million on low-carbon research, including alternative fuels committed to set a GHG reduction target; and took several other measures to reduce its climate impact,” Ceres said.
In the wake of major acquisitions that boosted the company’s size by 50%, some Anadarko shareholders filed a resolution to encourage the Houston producer set a GHG emissions reduction goal.
“Anadarko, already a leader among U.S. oil companies in addressing climate change, reaffirmed the company’s commitment to climate risk disclosure, arranging investor meetings with senior executives, and pledging to set a GHG reduction target by June 2008,” said Ceres. Because of its positive move, the resolution was withdrawn.
At ExxonMobil, shareholders owning more than $120 billion, or 31.1%, of the company’s stock supported a resolution requesting the board of directors to adopt quantitative goals based on current technologies for reducing total GHG emissions from products and operations. The resolution, which ultimately failed, was filed by the Sisters of St. Dominic of Caldwell, NJ, and it resulted in the highest support for a climate resolution in the company’s history, Ceres noted.
“Investors are concerned that ExxonMobil has made little progress and continues to lag far behind competitors such as ConocoPhillips, Chevron, Royal Dutch Shell and BP in addressing climate risks and escalating its renewable energy investments,” said Ceres.
Shareholders owning 31% of Houston-based independent Ultra Petroleum Corp. supported a resolution filed by the Nathan Cummings Foundation. The resolution requested that a committee of independent directors of the board assess how the company is responding to rising regulatory, competitive and public pressure to significantly reduce carbon dioxide and other GHG emissions and report to shareholders by Dec. 1, 2007.
Within the electric power and coal sectors, Ceres cited the record-high support for the Allegheny Energy resolution, which was filed by the New York City Pension Funds. The resolution requested that the Pennsylvania-based electric power company produce a report on how it planned to reduce GHG emissions. The resolution received the highest vote of any climate-related resolution.
Investors also filed three resolutions with TXU Corp., “which helped to ensure that a new climate change policy was included in the terms of the proposed acquisition of TXU by private equity firms Kohlberg Kravis Roberts & Co. and Texas Pacific Group,” according to Ceres.
According to Ceres, the New York City Pension Funds, lead filer of one of the three climate resolutions, commended TXU for agreeing to reduce the number of coal-fired power plants it planned to build from 11 to three.
“TXU also announced that it would explore renewable energy sources and invest in alternative energy technologies and create an independent sustainable energy advisory board,” Ceres noted. A third resolution, filed by the Benedictine Sisters of Boerne, TX, asked the company to set emissions reduction targets for GHG and mercury. That resolution will be voted on at TXU’s annual meeting on Sept. 7.
The full report is available at www.ceres.org.
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