SEC Climate Change Guidelines Lead to New Shareholder Resolutions

By Dale Wannen

If recent talk about climate change hasn’t already rattled every CEO’s corporate cage, then yesterday’s news regarding shareholder resolutions should do the trick.  It was announced during a phone-based news conference today that investors filed a record 95 climate change resolutions against companies ranging from coal mining to big box retailers.  That’s a 40 percent increase over last year.

This is mostly due to the SEC’s recent guidance talk on climate change disclosure.  As the SEC starts to keep a closer eye on these behemoth companies and their long-term impact on the environment, investors are clawing at an opportunity to voice themselves and have the SEC standing co-pilot.  And these investors have big money in the game.  Jack Ehnes, CEO of CalSTRS, which manages $131 billion (yes, billion)  in assets says,  “We want our companies to closely look at the impact climate change legislation and regulation have on them, to realistically assess those risks, and to consider the indirect consequences of climate change-driven regulation and business trends on their activities.  The SEC’s interpretive guidance outlines exactly the kind of action we have been asking our portfolio companies to take with regards to the issues raised by climate change.”

This all sounds well and good, but the question remains, “will companies listen?”  For example, ExxonMobil and ConocoPhillips are facing resolutions regarding their involvement with the energy and water intensive extraction of oil from the Canadian oil sands.  This area may possess the largest oil reserve in the world.  We can only hope that these companies are pressured enough by shareholders to alter their method of extraction and walk away, but with billions invested it may prove difficult.  Also, we have to hope that the SEC’s “guidance” remains firm enough to take action if these entities are not transparent.

As record filings of climate change resolutions continue to mount throughout the years and shareholders continue to vote their shares, corporations will hopefully take wind of the fact that times are changing and it will be imperative that they change too.

Dale Wannen is a portfolio manager with Harrington Investments a Napa, CA, firm specializing in Socially Responsible Investing. He previously worked as a financial advisor for UBS in San Francisco. Also, Wannen is currently an MBA student in sustainable management at San Francisco’s Presidio Graduate School and, as an avid bird enthusiast, sits as the treasurer and board member for the non- profit San Francisco Bay Bird Observatory.

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