Aug 20, 2008 12:31 pm US/Pacific
Group: Climate Resolutions On The Rise
CHARLESTON, W.Va. (AP) ―
Support for climate-change proposals may be growing among investors in big U.S. companies.
Shareholder resolutions related to
climate change
more than doubled over the past five years, according to statistics
gathered by a coalition of public interest groups, environmental
organizations and
pension funds.
Moreover, the coalition, Boston-based Ceres, says support for those
measures averaged more than 23 percent in 2008, a new high.
While that's not enough to pass a resolution, Ceres contends rising
vote totals compel companies to act, like a plan by Ford Motor Co. to
reduce
greenhouse gas emissions 30 percent by 2020.
"It's easy to ignore 3 or 5 percent votes, but it's pretty hard to
ignore 22 percent votes or 39 percent votes," said Dan Bakal, director
of electric power programs for Ceres.
Bakal said shareholder activism led to new reports from
Allegheny Energy and other large electricity producers that outline strategies to reduce greenhouse gas emissions. The companies faced
climate change resolutions this year. The proposals were withdrawn after companies agreed to issue the reports, Bakal said.
"It's an indication of movement," he said.
It was similar to what happened after shareholders voted against a
climate change resolution last year, Allegheny spokesman Allen Staggers said.
"That proposal was rejected by stockholders. However, the company
elected to prepare a report simply because it had been a timely issue,"
he said. "The chairman thought it was the right thing to do at the
time."
Deciding to issue a report or take some other action, often with the
side benefit of lowering costs or increasing efficiency, is an
understandable reaction by companies, said Karen Schnatterly, an
assistant professor of management at the University of Missouri.
"They look good," she said.
Ceres says 57 climate-related
shareholder resolutions were filed with U.S. companies in 2008, up from 43 in 2007 and 31 in 2006.
Support likewise has climbed from an average of 17.8 percent in 2006
and 21.6 percent last year. This year, support averaged 23.5 percent,
according to Ceres.
Fewer than half the resolutions end up before shareholders. Ceres
says 26 went to a vote in 2008, and 25 were withdrawn after companies
agreed to address the issue. Five others were withdrawn by proponents
due to technicalities or left out of
proxy statements by the
Securities and Exchange Commission.
Despite Ceres' claims of success, so far none of the proposals has
come close to passing. The best showing the group can cite is a
resolution rejected by the owners of better than 60 percent of
Pittsburgh-based coal mine operator Consol Energy shares.
Thus far, Bakal said he knows of no action by Consol despite the relatively high level of shareholder support.
Consol, which links the vote total to support by an
institutional investor advisory service, sees little value in a report, spokesman Tom Hoffman said.
"We produce coal and
natural gas,"
Hoffman said. "It just doesn't seem to us that there is a whole lot of
value to shareholders to do a study to tell them what they already
know."
Charles Elson,
corporate governance chair at the
University of Delaware, says the lack of victories shows social issues simply haven't attracted mainstream investors, despite support from some large
pension funds.
"I don't think it's caught on yet," Elson said.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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