Record proxy season as shareholders crank up climate demands

Pressure on US firms to develop climate change policies has reached record levels, according to new figures from ethical invetsor coalition Ceres showing that more than 100 climate and energy-related shareholder resolutions were filed during this year's proxy season.

The lobby group said shareholders filed an unprecedented 101 climate and energy-related resolutions with 88 US and Canadian companies, marking an increase of nearly 50 per cent on 2009.

The resolutions are having a clear impact on the environmental policies of many firms with half of those facing resolutions agreeing to the proposals put forward by shareholders without taking the resolution to a vote at their annual general meeting (AGM).

For example, Procter & Gamble agreed to annually report on the amount of palm oil it sources sustainably as of 2011, following a shareholder resolution, while energy firm FirstEnergy agreed to only use dry storage facilities for its coal ash in order to limit the risk of environmenal contamination.

A further 42 resolutions have gone to a vote at AGMs, with 16 achieving at least 30 per cent support, which is a three-fold improvement on last year.

Ceres president Mindy Lubber said the steady increase in climate and energy-related shareholder resolutions was likely to continue in the wake of the BP oil spill in the Gulf of Mexico.

"The BP spill is only the latest reminder of why investors are ratcheting up their attention to climate and other environmental risks across their portfolios," she said. "This year's record results send a powerful message that companies should boost their attention to these issues."

Jack Ehnes, chief executive at CalSTRS, one of the pension funds in the Ceres coalition, argued that there was a strong financial case for investors to file resolutions demanding that firms take climate change risks more seriously.

"If our portfolio companies are to provide long-term shareowner value, they need to be proactive, not reactive, in addressing climate change and other ESG (environmental, social and governance) matters," he explained. "The excessive focus on short-term profits at the expense of all else has proven disastrous and has led to widespread financial issues. But this proxy season's record-breaking results is an encouraging sign that investors and companies are paying increasing attention to long-term drivers of value."