Proxy Voting Firms Urge Support for Global Warming Shareholder Resolution Filed with CONSOL Energy

Citing the coal company’s poor disclosure regarding potential financial risks it faces from climate change, two leading proxy voting advisory firms, Proxy Governance, Inc. and ISS Governance Services, have both recommended that investors support a shareholder resolution filed with Pittsburgh-based CONSOL Energy (NYSE:CNX) seeking greater disclosure on the company’s strategies for responding to climate change.

Shareholders will vote on the resolution at CONSOL’s annual corporate meeting Tuesday, April 29 in Pittsburgh.

Given that coal combustion accounts for more than a third of all greenhouse gas (GHG) emissions in the U.S. and given the growing regulatory momentum to reduce greenhouse gas emissions from U.S. power plants, the New York City Pension Funds filed a resolution requesting that CONSOL provide shareholders with a report on how the company is responding to rising regulatory, competitive, and public pressures to significantly reduce carbon dioxide and other GHG emissions from the company’s products and operations. The resolution specifies that the report be submitted to shareholders by September 1, 2008 and be reviewed by an independent committee of directors.

“CONSOL Energy’s current disclosures are inadequate, and we are concerned that the company appears to lag peers on its overall preparedness for climate change,” wrote Proxy Governance in its recommendation to investors published April 13.  “It is clear that coal companies are unlikely to be able to carry on ‘business as usual.’  We believe that company-specific risk exposure to carbon constraints will vary significantly with the extent to which a company takes proactive steps in evaluating and engaging likely future GHG regulation.”

“ISS believes that by improving its climate change disclosure, to potentially include the establishment of appropriate GHG goals from its products and operations, the company could mitigate its risk of exposure to future climate change challenges while simultaneously providing shareholders with a means to evaluate the company’s performance,” added ISS Governance Services, which is owned by the Risk Metrics Group.  “The requested report could benefit the company by providing a means for guiding its overall climate change strategies.  ISS believes that this proposal warrants shareholder support.”

In filing separate resolutions this year with coal producers CONSOL and Massey Energy, New York City Comptroller William Thompson Jr., whose office manages $115 billion in assets, said in a statement last month: “It is now indisputable that climate change poses great risks to companies in the energy industry, especially coal producers. Full and transparent disclosure of companies’ efforts to assess and minimize those risks is of critical importance to investors. Companies that are proactive in assessing and seeking to reduce the impacts, and creating new environmentally friendly technologies, will gain competitive advantage and secure long-term sustainable profitability.”

The resolution with CONSOL is one of a record 55 global warming shareholder resolutions filed with U.S. companies as part of the 2008 proxy season. The resolutions are nearly double the number filed just two years ago and have been filed by some of the nation's largest public pension funds, as well as labor, foundation, religious and other institutional investors. Many of the investors are part of the Investor Network on Climate Risk (INCR), an alliance of over 60 institutional investors with collective assets totaling more than $5 trillion.

“Many US companies are confronting the risks and opportunities from climate change, but others are not responding adequately – and may be compromising their long-term competitiveness as a result," said Mindy S. Lubber, president of Ceres, which helps coordinate the shareholder filings and directs INCR. "Investors want all companies to understand the business impacts of climate change – and plan for it accordingly."

This year’s filings come on the heels of a record high number of resolutions and record high voting support for global warming resolutions in the 2007 proxy season. Investors filed 43 resolutions with U.S. companies last year and average voting support was 21.6 percent.  Along with Ceres, the Interfaith Center on Corporate Responsibility (ICCR), a group of 275 religious investment funds, also coordinates the shareholder filings.