A group of leading US investors today announced the formation of a Climate Watch List, a list of 10 companies that have been identified as lagging behind their industry peers in their responses to climate change. As part of this effort, investors have filed shareholder resolutions with the 10 companies - and 26 other US businesses - aimed at improving their focus and attention to the business risks and opportunities from climate change.
The Climate Watch companies include influential electric power companies, oil producers, coal companies and other businesses that investors believe are not adequately dealing with potential climate-related business impacts, whether from physical changes, emerging climate regulations, or growing global demand for climate-friendly technologies and services.
The resolutions are among a record 42 global warming resolutions filed with U.S. companies as part of the 2007 proxy season - nearly double the number of climate-related resolutions filed just three years ago. The resolutions, seeking greater disclosure from companies on their responses and strategies to 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.
The Climate Watch companies include:
Banking & Financial: Wells Fargo
Electric Power: TXU, Dominion Resources, Allegheny Energy
Coal: Massey Energy and Consol Energy
Oil & Gas: ExxonMobil and ConocoPhillips
Retail: Bed Bath & Beyond
"Many US companies are confronting the risks and opportunities from climate change, but others are not responding adequately - and they may be compromising their long-term competitiveness and shareholder value as a result," said Mindy S. Lubber, president of Ceres, a leading coalition of investors and environmental groups that helped coordinate the shareholder filings. "We want all companies to understand the business impacts of climate change - and plan for it accordingly. It's is what any corporate director would expect of their CEO."
"Those companies that are ignoring the serious risks posed by climate change do so at their own peril," said North Carolina State Treasurer Richard Moore, whose office manages more than $70 billion in pension funds. "Acknowledging the business risks posed by climate change is just good business, and shareholders demand it."
"Legislation to reduce greenhouse gas emissions looks increasingly likely," added Leslie Lowe, director of the Energy and Environment Program at the Interfaith Center on Corporate Responsibility, an association of 275 faith-based institutional investors. "Investors want to know whether companies are prepared to meet the challenge of reducing CO2 in their operations and products. They want companies to set voluntary reduction goals and tell the market how they plan to meet those goals."
"Scientific projections of the potential destructive impacts of climate change on the global economy are now incontrovertible. Companies in every industry, especially energy sectors, must act now to assess and mitigate climate change risks," said New York City Comptroller William Thompson Jr., whose office filed resolutions with electric power and coal companies. "To enable investors to make informed investment decisions, companies must provide full and transparent disclosure of the actions they are taking to address the risks and opportunities of climate change."
The Climate Watch companies:
Dominion Resources Inc.: Dominion has balked at shareholder requests the past three years to disclose its potential financial exposure from foreseeable climate regulations. This year's resolution, filed by the New York City Comptroller's Office, requests that Dominion prepare a climate risk report, just as a dozen other US power companies already have done. The VA-based company emitted 62 million tons of CO2 from its power plants in 2004. (NYC Comptroller Contact: Jeff Simmons, 212-669-2636)
TXU Corp: TXU, which is proposing to build 11 coal-fired plants in Texas, has been targeted with three resolutions requesting reports on how the company is responding to growing regulatory pressure to reduce CO2 emissions and how enhanced energy efficiency programs in Texas could impact its ability to sell new power. The resolutions were filed by the New York City Pension Funds, Connecticut State Treasurer's Office and Benedictine Sisters of Texas. (CT State Treasurer Contact: Robyn Belek, 860-702-3013)
ConocoPhillips: Unlike BP, Chevron and other major oil producers, ConocoPhillips has made no significant investments in wind, solar and other renewable energy technologies that will be in increasing demand in the years ahead. The resolution filed by Trillium Asset Management and the North Carolina State Treasurer requests that the board of directors prepare a report on how it is responding to rising competitive and regulatory pressure to significantly develop renewable
energy sources. (Trillium Contact: Shelley Alpern 617-423-6655 and NC State Treasurer Contact: Sara Lang, 919-807-3132)
Wells Fargo: Unlike Bank of America and JP Morgan Chase, which have set specific goals to reduce GHG emissions from their lending activities, Wells Fargo has been unresponsive to shareholder requests for comprehensive emission reduction goals relating to its business. The resolution filed by the Service Employees International Union and 10 other filers requests that the CA-based company develop specific GHG reduction goals regarding its operations, lending activities and project financing. (SEIU Contact: Tracey Rembert, 202-297-4162)
Bed, Bath & Beyond: Unlike Lowe's, the Home Depot and other major retailers, Bed Bath & Beyond has been unresponsive to shareholder requests that it disclose its strategies and performance on energy efficiency and other climate related issues. Last year's resolution requesting a report on its energy efficiency efforts received more than 27 percent support. This year's resolution was filed by the Nathan Cummings Foundation and the Sierra Club Mutual Fund. (Nathan Cummings Foundation Contact: Laura Shaffer, 212-787-7300 x233)
Massey Energy: Given that coal combustion accounts for about 35 percent of all GHG emissions in the US and given the growing regulatory momentum to reduce emissions from power plants, the New York City Pension Funds have filed a resolution with the VA-based company requesting a report on how the company is responding to growing regulatory and competitive pressure to significantly reduce GHG emissions. Massey is the nation's 4th largest coal producer. (NYC Comptroller Contact: Jeff Simmons 212-669-2636)
Consol Energy: Given that coal combustion accounts for about 35 percent of all GHG emissions in the US and given the growing regulatory momentum to reduce emissions from power plants, the New York City Pension Funds have filed a resolution with the PA-based company requesting a report on how the company is responding to growing regulatory and competitive pressure to significantly reduce GHG emissions. Consol is the nation's largest bituminous coal producer. (NYC Comptroller Contact: Jeff Simmons, 212-669-2636)
ExxonMobil: Investors are dissatisfied with the company's climate risk disclosure and general lack of response to climate issues. Unlike other major oil firms, which are making tangible investments in low-carbon technologies, ExxonMobil has been unresponsive to investor requests for a decade regarding strategies intended to meet growing demand for diversified energy sources. The five resolutions request that the board develop comprehensive GHG emission reduction goals and disclose its plans for responding to climate legislation. The resolutions were filed by the CT State Treasurer, the Tri-State Coalition for Responsible Investment and the Midwest Capuchin Order. (Tri-State Coalition Contact: Sister Pat Daly, 973-670-9674)
ACE Limited: Unlike AIG and other industry peers, insurer ACE Limited has refused various investor requests to disclose its strategies, policies and potential exposure from climate change. The resolution filed by the Calvert Group requests that ACE's board of directors provide a report describing the company's strategy and actions relative to climate change, including the effects that climate change may have on the company. (Calvert Group Contact: Stu Dalheim, 301-961-4762)
Allegheny Energy: Based in Greensburg, PA, Allegheny is one of the 20 largest CO2 emitters in the country's electric power industry, with 45 million tons emitted in 2004. Allegheny has not responded to repeated requests for disclosure regarding its potential exposure to foreseeable climate regulations. The New York City Comptroller's office has filed a resolution requesting a report on how it is responding to growing regulatory and competitive pressure to significantly reduce greenhouse gas emissions. (NYC Comptroller: Jeff Simmons, 212-669-2636)
In addition to the Climate Watch companies, investors filed resolutions with the following other businesses. The list of investors filing resolutions with each of the companies can be found at http://www.ceres.org or http://www.iccr.org
Auto: General Motors, Ford
Building Companies: Boston Properties, Centex, *D.R. Horton, Kroger, *Standard Pacific, Pulte Homes, *Toll Brothers
Retailers: *Costco, CVS, Whole Foods
Coal: Arch, *Ameren
Electric Power: Sempra, Southern
Insurance: Hartford, Prudential, Chubb
Oil & Gas: *Anadarko, Chevron, EOG, Ultra Petroleum
S&P 500: *Bemis, *Teradyne, Starwood Hotels
*Resolution withdrawn after company agrees to comply with shareholder resolution request.
- 208 Regulation