Climate resolutions ‘having big impact’

By Jonathan Birchall in New York
Published: August 20 2008 19:15

A coalition of investors and environmental groups claimed on Wednesday that climate change-related shareholder resolutions filed in the US this year had achieved breakthrough results, reflecting growing investor concerns over global warming.
Of 57 resolutions filed by a range of socially concerned investors, almost half were withdrawn after companies ranging from Continental Airlines to El Paso made commitments on setting targets for reducing greenhouse gas emissions and other issues.

According to Ceres, a group that co-ordinates environmental initiatives by investors and activist groups, the 24 resolutions that went to a vote secured a record high average of voting support of 23 per cent, up from just over 17 per cent for the resolution votes two years ago.
While activist resolutions are always defeated in a vote, they have frequently contributed to US companies adopting policies that they initially resist – with Wal-Mart’s new embrace of environmental and social sustainability targets the most high-profile example.
This year’s tally included four climate-range related resolutions presented to ExxonMobil that were supported by the Rockefeller family, the company’s longest continuous shareholders, causing significant embarrassment to its management.
In reviewing this season’s effort, Ceres highlighted new commitments made this year on energy-efficient building from two leading US homebuilders, KB Home and Centex, which have both been targeted by resolutions calling for clearer reporting of their policies on energy-efficient building.
A resolution calling on KB Home to set targets for reducing CO2 emissions was withdrawn after it said it was publishing a sustainability report that included a commitment to new energy-efficiency standards from next year.
Centex opposed a similar resolution at its annual meeting, but subsequently also announced new standards for the energy efficiency of its homes.
Laura Shaffer, of the Nathan Cummings Foundation, the investor that filed with the two homebuilders, said it was “difficult to draw a direct line” between resolutions and company actions. “But the resolutions are a very valuable tool for getting an issue before the board of directors and shareholders.”
In a sign of changing attitudes towards climate change, all the resolutions filed with US homebuilders this year had the support of Risk Metrics and Proxy Governance, two of the big three US proxy vote advisory firms.
Three years ago, neither firm supported similar resolutions at the companies.
Copyright The Financial Times Limited 2008