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Investors challenge 10 electric power companies on climate change and air pollution risks
Leading U.S. investors today announced they have filed shareholder resolutions with Southern Company, FirstEnergy, Ameren and seven other electric power providers, pressing them to disclose their plans for managing the risks associated with climate change and pending clean air regulations.
Most of the resolutions press companies for information that will help investors assess the companies’ readiness for complying with the Environmental Protection Agency’s Mercury and Air Toxics Standards, which goes into effect in 2014. Electric utilities will need to replace aging coal-fired power plants with cleaner generation sources like natural gas or renewables, or retrofit older plants with pollution control technology, to comply with the new standard.
“Leading electric utilities are expanding energy efficiency programs, adding renewable energy generation, and switching from coal to natural gas to diversify their strategies for providing cleaner electricity,” said Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, which helps coordinate the resolutions. “Investors want to know which companies are ahead of the curve in making this shift, which will help them comply with the new mercury standard and eventual climate regulations.”
The New York State Comptroller’s Office filed resolutions with DTE Energy, CMS Energy and Ameren--each of which relies on coal for more than three quarters of its power generation--asking the companies to assess actions to build shareholder value and reduce greenhouse gas emissions (GHGs) and air pollution via comprehensive energy efficiency and renewables programs for customers. The Comptroller filed a similar resolution last year with FirstEnergy, which recently announced that it would retire six old coal-fired plants in Pennsylvania, Ohio and Maryland in order to reduce emissions.
Other resolutions filed in the electric power, homebuilding and natural gas sectors in recent years have achieved significant improvements as detailed in Proxy Power: Shareholder Successes on Climate, Energy & Sustainability.
“Reducing pollution is not just an imperative for the world, it’s a necessary step for companies to remain at the cutting edge of this industry,” said New York State Comptroller Thomas P. DiNapoli. "Working with Ceres, we are urging companies to find ways to be transparent, sustainable and profitable in the context of our current regulatory environment."
Ameren received an additional resolution from the shareholder advocacy group As You Sow, asking it to report on plans to reduce company exposure to coal-related costs and risks, including progress toward achieving goals to minimize commodity risk, emissions other than GHGs, costs of environmental compliance, and construction risk. Duke Energy and FirstEnergy, and Empire District Electric Company, received similar resolutions.
"Due to a changing regulatory landscape and increased market pressures from low-cost natural gas and alternative energy sources, electric utilities reliant on coal are exposed to significant financial risk," said Corinne Bendersky, As You Sow’s Energy Program Manager. "We want companies to report on plans to minimize coal-related risks, demonstrating to investors that they are prepared to meet these challenges and protect shareholder value."
Other resolutions filed include:
- The New York City Comptroller John C. Liu filed resolutions with GenOn and Dynegy asking the companies to report on plans for setting GHG reduction goals.
- FirstEnergy and Southern Company also received resolutions from Green Century Capital Management asking them to report on plans for managing the environmental financial, legal, and reputational risks associated with coal ash disposal. Ameren received a similar proposal from the Midwest Coalition for Responsible Investment.
- The New York State Comptroller filed a resolution with Duke Energy (which is merging with Progress Energy) seeking disclosure on actions the company could take to expand energy efficiency and renewable energy programs.
The resolutions filed with electric power companies are part of a broader investor initiative challenging companies to address climate and sustainability risks. The resolutions were filed by some of the nation’s largest public pension funds, foundations, and religious, labor and other institutional investors. Many of the investors are members of Ceres’ Investor Network on Climate Risk (INCR), which has 100 members managing over $10 trillion in assets.
Thus far in the 2012 proxy season, investors coordinating with Ceres have filed 86 resolutions with 69 companies, including businesses with direct exposure to climate change, such as oil and gas companies, and companies with indirect but significant exposure through their supply chains or products, such as food, clothing and telecommunications firms. For the complete list, see http://www.ceres.org/files/press-files/shareholder-resolutions-tracked-by-ceres/. These resolutions are a subset of the hundreds of sustainability-focused resolutions filed this year.
Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful coalition of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets totaling more than $10 trillion. For more information, visit www.ceres.org and www.incr.com.