Cleco Sustainability Report 2013
|Filer||Calvert Asset Management Company, Inc.|
|Subject(s)||Sustainability Reporting; Water Scarcity|
|Resolved Clause Summary||Sustainability report including ESG performance and water risk analysis|
WHEREAS: We believe tracking and reporting on environmental, social and governance (ESG) business practices makes a company more responsive to a global business environment which is characterized by finite natural resources, changing legislation, and heightened public expectations for corporate accountability. Reporting allows companies to better integrate and gain strategic value from existing sustainability efforts, and identify gaps and opportunities in products and processes, among other benefits.
Sustainability reporting and the demand for ESG information is on the rise globally. In 2011, there was a 46 percent increase in the number of organizations worldwide using the Global Reporting Initiative’s (GRI) Guidelines for their ESG reporting according to the Governance & Accountability Institute. Signatories to the Principles for Responsible Investment (PRI), which represent over $33 trillion of assets under management, integrate ESG factors in investment decision-making.
Sustainability-related challenges, particularly related to water, pose specific challenges for thermo-electric power producers. The U.S. electric power industry accounts for 41 percent of the country’s total freshwater withdrawals, requiring an estimated 136 billion gallons a day for generation and cooling. According to the Department of Energy, “Water shortages, potentially the greatest challenge to face all sectors of the United States in the 21st century, will be an especially difficult issue for thermoelectric generators due to the large amount of cooling water required for power generation.” Water scarcity is increasing and climate change is expected to exacerbate water shortages. This poses a number of risks to electric utilities, including:
• Increased costs due to heightened competition for decreasing water supplies and more rigorous state and federal regulations;
• Reduced production stemming from plant shut downs or other operational disruptions; and
• Inability to use new and developing technologies such as carbon capture and storage due to water scarcity.
Currently, Cleco has limited public information on its strategies and programs aimed at addressing ESG issues, and its disclosure lags behind sector peers. Therefore, proponents encourage the company to produce a comprehensive sustainability report that includes thorough disclosure on water-related risks. Furthermore, last year 34 percent of Cleco’s shareholders supported a similar proposal, demonstrating that a significant portion of the company’s investors seek more comprehensive reporting in this area.
RESOLVED: Shareholders request that Cleco Corporation issue a sustainability report that includes a comprehensive discussion of the company’s sustainability risks and opportunities, including an analysis of material water-related risks. The report should be available by September 1, 2013, be prepared at reasonable cost, and omit proprietary information.
SUPPORTING STATEMENT: We recommend that the report include a company-wide review of policies, practices and metrics related to ESG performance and that Cleco commit to continuous improvement in reporting. We encourage use of the GRI Guidelines (www.globalreporting.org), a globally accepted reporting framework considered the gold standard of reporting. We also recommend the use of one of several water risk mapping tools, such as the WBSCD Global Water Tool, WWF and DEG’s Water Risk Filter, Ceres Aqua Gauge or CEO Water Disclosure Guidelines.