Investors have achieved notable victories during this year’s shareholder proxy season, with a near record 110 shareholder resolutions filed with 94 U.S. companies on hydraulic fracturing, flaring, fossil fuel reserve risks and other climate- and sustainability-related risks and opportunities.
The majority of resolutions filed within the energy sector focused on strategies recently promoted by the International Energy Agency in its report, Redrawing the Energy-Climate Map, to reduce sector-wide greenhouse gas (GHG) emissions at no net economic cost, and in some cases, economic gain.
Some of these strategies include:
· Targeted energy efficiency measures in buildings, industry and transport.
· Limiting the construction and use of the least-efficient coal-fired power plants.
· Cutting methane emissions in half by 2020.
According to the report, investors withdrew more than 40 resolutions after the companies made positive commitments to reduce GHG emissions, gas flaring and adverse impacts from hydraulic fracturing. Other shareholder successes included strong votes — as high as 38 percent — on resolutions asking oil and gas companies to set methane emission reduction goals. First-time resolutions regarding fossil fuel reserve risks — also known as carbon bubble resolutions — received up to 22 percent support.
Filers of the resolutions include some of the nation’s largest public pension funds, such as the California State Teachers Retirement System and the New York State and New York City Comptrollers’ Offices; socially responsible investors such as Green Century Capital Management and Trillium Asset Management; and religious, labor and other institutional investors, who collectively manage more than $500 billion in assets.
“The strength of this year’s proxy season shows unwavering investor concern about how companies, especially energy companies, are managing the profound climate-related risks of fossil fuel production, including traditional and unconventional oil and gas extraction,” said Mindy Lubber, president of Ceres. “Investors saw especially important progress in tackling flaring, hydraulic fracturing and methane emission impacts, all key contributors to climate change.”
Another report released earlier this year by advocacy group As You Sow, the Sustainable Investments Institute and Proxy Impact found that a record number of investors filed shareholder resolutions on environmental and social issues in 2012.