Environmental Finance: Shareholders make Apple, Colgate, Dell act on sustainability
Shareholder resolutions have spurred companies to made commitments to tackle environmental and social risks in their operations and supply chains in 44 out of 108 cases tracked by Ceres in 2012.
Boston-based investor and environmental coalition Ceres tracked filings for shareholder votes at US companies on climate, energy, water, greenhouse gas reductions, sustainability reporting, and governance issues made by members of its Investor Network on Climate Risk.
The level of action during 2012’s proxy season was similar to last year’s, when 109 resolutions were filed by the members leading to 45 companies taking action on them.
The 28 most active filers include some of the largest public pension funds in the US, such as those overseen by the New York State and New York City Comptrollers’ Offices, and the California State Teachers’ Retirement System.
“The 2012 proxy season showed strong progress from a wide range of companies that face sustainability challenges related to climate change, water scarcity and growing supply chain risks,” said Mindy Lubber, president of Ceres.
Examples of filings resulting in company action include pressure from Calvert Investments and the New York State Comptroller’s Office which led to consumer brands giant Colgate and food producer Smucker’s both agreeing to source 100% certified sustainable palm oil for their products.
Another hot topic for shareholders was hydraulic fracturing, or ‘fracking’, a method to extract natural gas that has caused controversy because of its environmental impacts.
Companies including Noble Energy, EOG Resources and Chesapeake Energy agreed to improve disclosure around the risks associated with their hydraulic fracturing operations. In total, shareholders filed 10 resolutions on fracking, which generated a 30% average vote at the companies that declined to negotiate in advance of annual meetings.
“The high votes and corporate commitments on fracking disclosure send strong messages to companies that significant numbers of their shareholders require increased disclosure on this issue,” said Larisa Ruoff, director of shareholder advocacy for Green Century Capital Management.
Meanwhile, Ceres highlighted commitments from Apple, Dell, HP and Intel to encourage or require sustainability reporting by their major suppliers.
“Together, these firms represent more than 50% of the personal computer market, making them some of the most exposed to [supply chain] risk,” said Ceres.
Shareholders also convinced companies including footwear brands Crocs and DSW, and biotechnology company Celgene, to issue sustainability reports.
“When urging companies to issue sustainability reports, investors are asking for more than just disclosure, but rather an outline for sustainable business strategies for long-term growth,” Ceres said.