Investors are nervous about California’s ballot initiative Proposition 23, which would overturn the state’s landmark Global Warming Solutions Act of 2006 or AB 32. Last week, 23 investors announced that they filed shareholder resolutions with oil companies Occidental Petroleum, Valero Energy Corp. and Tesoro Corp. All three of the oil companies have funded Proposition 23. The shareholder resolutions request Board reviews and oversight of the companies’ political contributions and policies.
Valero and Tesoro have spent $4 million and $1.5 million on Proposition 23, while Occidental spent $300,000. Investors who filed shareholder resolutions include Nathan Cummings Foundation, Green Century Capital Management, Investor Network on Climate Risk, and Walden Asset Management.
Laura Campos, Director of Shareholder Activities at the Nathan Cummings Foundation, said that shareholders are “concerned Tesoro’s support for the highly controversial Proposition 23 could lead to a decrease in shareholder value by damaging the company’s reputation and negatively impacting the business environment in a state where Tesoro has significant operations.”
“Climate change is a serious threat to our planet and economy. We are concerned that Prop 23 will remove important market signals necessary to transition to cleaner business practices,” said Larisa Ruoff, Director of Shareholder Advocacy for Green Century Capital Management.
“That Valero and the other companies are using company money for such overt political purposes is both inappropriate and reflects poor governance,” said Mindy Lubber, president of Ceres and Director of the Investor Network on Climate Risk.
“These three companies ought to conduct a thorough board-level review of their political expenditures and their decision-making process for political spending and report to shareholders,” said Tim Smith, senior vice president at Walden Asset Management.
Investors issue statement urging voters to reject Proposition 23
This week 68 investors who collectively manage $415 trillion in assets issued a statement urging voters to reject Proposition 23. The signers of the statement include Catholic Health Care West and VantagePoint Venture Partners, both California-based firms. In total 18 California-based firms signed the statement.
“As investors, we need certainty about the policies that govern the sectors in which we invest so that we can make strategic, profitable investments over the long term,” the statement declared. “This policy certainty, however, would be eliminated if Proposition 23 passes….(it) would cause California to lose billions of dollars of investment and thousands of jobs to competitors like China, Japan, Germany, or other U.S. states that have more stable commitments to clean energy policy.”
The statement said that if Proposition 23 passes, California’s “role as a national clean energy leader” would be undermined. In turn, passage of the ballot initiative might end up leading “to the rollback of environmental protection mechanisms in other states that look to California as a model for environmental policy — further harming our clean tech industries.”
The statement went on to say that Proposition 23 “could in turn delay our entire nation’s transition to cleaner energy and greater energy independence, all while sending a negative message to the rest of the world about America’s leadership in clean energy technologies.”
The Proposition 23 Series will continue through the election.