Commercial, Energy Procurement, GHG Emissions, Industrial, Regulation - April 11, 2016
Number of shareholder resolutions filed on climate change increased in 2016
With the 2016 proxy season underway, an analysis of shareholder proposals recently revealed that corporations are facing a record number of resolutions that address climate change and the risk companies face amid the trend toward a lower carbon economy.
According to Proxy Preview 2016, a report released in early March by As You Sow, the Sustainable Investments Institute and Proxy Impact, . Among them, the widely reported one submitted to ExxonMobil: The U.S. Securities and Exchange Commission recently sided with the group of ExxonMobil shareholders that asked the oil production giant to disclose the resilience of its business model amid a growing global effort to combat climate change.
Of the 94 resolutions, the groups said in a news release, 22 ask energy extractors and suppliers to detail how the warming planet will affect their operations and how they will respond if governments follow through with commitments made in the Paris climate treaty in December to keep fossil fuel assets in the ground to prevent damaging temperature increases. A further 18 resolutions focus on the risks from using hydraulic fracturing to extract energy from shale deposits, including 12 seeking methane reduction targets.
Nineteen resolutions ask companies to set greenhouse gas emission reduction targets, according to the report, and another 11 proposals include a push to change energy reserves accounting at two companies and one suggests executive bonuses should be linked to fossil fuel reserves accounting changes.
The groups also found that political activity accounted for another 99 resolutions, including some drawing connections between government inaction on climate change and corporations’ lobbying and election spending.
Proposals on lobbying, which totaled 55, exceed those about election spending, which totaled 40, according to the report. Nine companies face resolutions seeking oversight and disclosure of both election and lobbying expenditures, the groups said.
"In this Paris-meets-politics year, the growing integration of issues for shareholder advocacy is apparent like never before," As You Sow CEO Andrew Behar said in the news release. "We see political spending intertwined with climate change and sustainability directly linked to CEO pay. Investors want companies to take a broad, systemic look at their policies and how they affect responsible action in the broader economy."
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