Cabot Oil & Gas GHG Goals 2014
|Company||Cabot Oil & Gas Corporation|
|Filer||Walden Asset Management|
|Sector||Oil and Gas|
|Subject(s)||Energy Efficiency (industrial); Greenhouse Gas Emissions; Renewables|
|Resolved Clause Summary||Quantitative goals for reducing GHG emissions|
|Status||Withdrawn; Company will address|
RESOLVED: Shareholders request that the Board of Directors of Cabot Oil & Gas Corporation adopt quantitative goals, based on current technologies, for reducing total greenhouse gas (GHG) emissions from the company's operations; and that the company report to shareholders by fall 2014, on its plans to achieve these goals. Such a report will omit proprietary information and be prepared at reasonable cost.
In September 2013, the Intergovernmental Panel on Climate Change (IPCC), the world’s leading scientific authority on climate change, released its fifth assessment report concluding that human-caused "warming of the climate system is unequivocal," with many of the impacts of warming already "unprecedented over decades to millennia."
In order to mitigate the worst impacts of climate change, the IPCC estimates that a 50 percent reduction in GHG emissions globally is needed by 2050 (relative to 1990 levels).
To mitigate the impacts of climate change, more than 40 national and 20 sub-national government jurisdictions have either implemented or are considering independent carbon pricing mechanisms. In May 2013, President Obama outlined an action plan to address climate change. This comes on the heels of new Corporate Average Fuel Economy (CAFE) Standards, which set new targets for automotive fuel efficiency, and the development of low carbon fuel standards which will prompt development of a new generation of fuels that will be economically and environmentally more sustainable. In short, increased regulation of GHG emissions is underway.
We believe setting GHG emission reduction targets driven by process changes and efficiency gains is good for the bottom line.
• A study of 386 U.S. companies in the S&P 500 by CDP found that 79% of companies “earn a higher return on their carbon reduction investments than on their overall corporate capital investments,” and that energy efficiency improvements earned an average return on investment of 196%, with an average payback period between two and three years.
• Furthermore, CDP reports: “High GHG emitting companies that set absolute emissions reduction targets achieved reductions double the rate of those without targets with 10% higher firm-wide profitability.”
While most S&P 500 companies, including industry peers like Apache and Chevron, have set GHG emission reduction targets, our company lags behind.
We recommend the company consider a range of initiatives, including alternative fuels, capital investment and renewable energy procurement to meet its GHG reduction goal. These approaches can result in benefits, including: reduced regulatory risk related to GHG emissions; reduced financial risk by decreasing volatility of energy prices; and reduction of overall expenditure on energy.
We believe it is vitally important for companies to measure and manage their GHG emissions and their impact on climate change. Creating clear-cut goals will help our company to significantly reduce our carbon footprint by implementing a disciplined business strategy to cut emissions from our operations.