Investor Groups Balk at Oil Companies' Support of Prop. 23
Institutional investor groups concerned about corporate funding of political campaigns are expected to announce shareholder resolutions Wednesday that will challenge three energy firms making big-dollar contributions to halt California's landmark law limiting greenhouse gas emissions.
The resolutions target Occidental Petroleum Corp., Valero Energy Corp. and Tesoro Corp., which have contributed to an $8-million campaign on behalf of Proposition 23, which would effectively repeal the state's stringent global warming rules.
The resolutions will come initially from a tiny group of shareholders. Green Century Capital Management in Boston, which is co-filing the resolution challenging Los Angeles-based Occidental, holds fewer than 100 shares in the company. Valero and Tesoro are based in San Antonio.
Wednesday's announcement is sponsored in part by the Investor Network on Climate Risk, which represents institutional investors with $9 trillion in assets, showing the prospect of broad future support for the resolutions.
The announcement marks the beginning of a concerted campaign by a group of large investors to defeat Proposition 23 and preserve the California law cutting industrial and vehicle emissions. Next week, several large investment firms — including one of the world's largest, Deutsche Asset Management — are expected to formally announce opposition to Proposition 23.
At the same time, the resolutions underscore the growing use of shareholder pressure on corporations to disclose details of their political spending.
This year, shareholders of Target Corp. and others objected to the company's support for a Republican gubernatorial candidate in Minnesota with a record of opposing gay rights. Target apologized and promised to review its donation policies.
"Leading institutional investors both large and small are concerned that Prop. 23 … would be a step backward," said Mindy Lubber of the Investor Network.
California's public pension funds are not taking an official position on the shareholder resolutions. But a member of the board of New York City's pension system, one of the nation's largest, said he was interested in the resolution and had supported resolutions like it in the past. Similar interest has been expressed privately by other pension fund executives.