Shareholders Continue to Push Energy Companies to Address Climate Change, Fossil Fuels

Several other oil and gas companies were not responsive to shareholder proposals on fracking impacts, and those resolutions received strong investor support when they were voted on at corporate annual meetings, including Exxon (30 percent), Chevron (31 percent) and Pioneer Natural Resources (32 percent).

Fossil Fuel Asset Risks

First-ever resolutions focused on fossil fuel reserve valuation risks were filed with two of the nation’s five largest coal companies, CONSOL Energy in Pennsylvania and Alpha Natural Resources in Virginia. The proposals asked that the companies describe how their extensive coal reserves stood to be impacted – or potentially stranded – due to impending carbon regulations, and what potential impacts these scenarios may have on future value of coal and gas reserves. The resolutions, filed by As You Sow and the Unitarian Universalist Association, received 22 percent and 18 percent investor support, respectively.

2013 analyses by the Carbon Tracker Institute and the International Energy Agency (IEA) found that if government regulations were imposed to limit global warming to 2 degrees Celsius, roughly two-thirds of proven fossil fuel reserves would need to remain underground. These reserves, which account for as much as 50 to 80 percent of the market value of coal, oil and gas companies, would therefore be at risk of becoming “stranded”, thus exposing companies and investors to significant financial risks.

Fugitive Methane Emissions

The International Energy Agency has concluded that methane emissions have a 100-year Global Warming Potential (GWP) – 25 times that of carbon dioxide. In order to mitigate this, Trillium Asset Management filed shareholder resolutions with three natural gas producers, including Spectra Energy, ONEOK, and Range Resources, requesting a report on how the companies are measuring, mitigating, and disclosing methane emissions. The resolutions received strong votes, 35 percent, 38 percent and 21 percent, respectively, indicating broad shareholder support.

“These very high shareholder votes send a clear message to management at Spectra Energy, Range Resources and Oneok that its investors expect the companies to move quickly to stop methane emissions,” said Trillium Asset Management, LLC Vice President Natasha Lamb. “With the President’s Climate Action Plan and the International Energy Agency emphasizing the need to dramatically reduce methane emissions, now is the time for the companies to get ahead of the regulatory risk and implement strong programs that leads to operational efficiencies and stop the release of damaging greenhouse gases.”

Energy Efficiency and Renewable Energy

The New York State Comptroller’s Office, which oversees the New York Common Retirement Fund, withdrew a resolution with DTE Energy after the Michigan-based company committed to expand its public disclosure and programs on energy efficiency and renewable energy offerings. DTE Energy committed to improve its disclosure on the costs and benefits and the greenhouse gas emission reductions associated with energy efficiency and renewable energy. The company also committed to disclose positions it takes related to development of the state’s energy plan this year.

Board Oversight of Environmental and Social Matters

Independent oil and gas companies Denbury Resources and Range Resources, both in Texas, committed to enhance board oversight of environmental and social matters in response to resolutions filed by Calvert Investments.

Source: Ceres.

About Ceres

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 $11 trillion.