Shareholders drop resolutions as Ford outlines emission plans

The ability of shareholder activists to force firms to improve their environmental credentials increased this week after Ford spelt out how it plans to reach its target of cutting emissions from its new vehicle fleet by 30 per cent by 2020, marking a first in the automotive industry.

The decision to publish its emission reduction strategy came in the wake of climate change-related shareholder resolutions put forward by members of the Investor Network of Climate Risk Network (INCR), a green investor coalition organised by CSR group Ceres and the Interfaith Center on Corporate Responsibility (ICCR).

The two groups – which both aim to promote better understanding for investors of the financial risks and opportunities presented by climate change – have now agreed to drop their shareholder resolutions against Ford.

Ford outlined a detailed analysis of its emission goals for its fleet to investors, demonstrating how its 30 per cent emissions reduction target could be achieved – a target it claims is consistent with the 60 to 80 per cent reduction in emissions by 2050 that Ford and other US companies signed up to as part of the US Climate Action Partnership.

Sue Cischke, Ford’s group vice president of sustainability, environment and safety engineering, said that the company had spent three years studying a range of potential actions needed to achieve CO2 reduction goals and had now shared the findings with its institutional investors.

"We realise much work remains to be done and we look forward to continued collaboration in addressing the challenges of climate change," she said.

Investors heralded the move as a victory for shareholder activism and urged other car manufacturers to release more details on how they plan to cut emissions in line with the voluntary targets they have signed up to.

Denise Nappier, state treasurer for Connecticut, which is a a member of the INCR, said the move represented "a defining moment for the automobile industry" .

"I encourage other auto companies to follow Ford's lead and help shape a sustainable environment conductive for business growth and success," she added.

Mindy Lubber, president of Ceres and director of the INCR, said that although a valiant first step, "Ford, as well as General Motors, needs to do much more and quickly, to reclaim their leadership role in the global marketplace".

The move further underlines the growing pressure listed firms are under from investors to enhance their green credentials and disclose more details of their environmental record. According to recent figures from Ceres, a record 54 global warming related shareholder resolutions have been filed with US companies as part of the 2008 proxy season, nearly double the number of two years ago.