by James Hyatt
Encouraged by recent Securities and Exchange Commission guidance, institutional investors have filed a record 95 shareholder resolutions on climate change issues for the 2010 proxy season.
The resolutions, up 40% from last year, have been presented to some of the nation’s largest coal companies, electric power and oil producers, home builders, big box retailers, financial institutions and “other businesses that investors believe are not adequately disclosing and managing potential climate-related business impacts,” according to the Ceres coalition of groups working on sustainability issues.
Ceres directs the Investor Network on Climate Risk, composed of 80 institutional investors with collective assets of $8 trillion.
The SEC in January said a number of areas involving climate change may trigger disclosure requirements when they involve the impact of legislation and regulation, the impact of international accords, the indirect consequences of regulation or business trends, and physical impacts of climate change.
“We are not opining on whether the world’s climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics,” SEC Chairman Mary Schapiro said at the time. “Today’s guidance will help to ensure that our disclosure rules are consistently applied.”
“We want our companies to closely look at the impact climate change legislation and regulation have on them, to realistically assess those risks, and to consider the indirect consequences of climate change-driven regulation and business trends on their activities,” said Jack Ehnes, CEO of CalSTRS (California State Teachers’ Retirement System), which manages $131 billion dollars in assets.
Mindy S. Lubber, president of Ceres, said “climate change presents clear material risks and opportunities for U.S. businesses – and investors have a right to know which companies are well prepared and which are not.”
Investors often withdraw proposals when they receive a positive response from companies; 28 resolutions have been withdrawn this year, Ceres said.
Resolutions filed so far include measures asking for disclosures from ConocoPhillips on how it is addressing the impact of oil sands operations; from ExxonMobil on oil sands investments and reduction of greenhouse gases; and from Southern Company on GHG emissions targets and on the hazards of coal waste disposal.