Shareholders crank up demand for climate change action

Shareholder pressure on firms to step up their efforts to address climate change is continuing to rise, according to figures last week from the Ceres lobby group showing that the 2009 US proxy season saw a record 68 climate-related shareholder resolutions filed by investors.

There was also further evidence that the resolutions are working, with Ceres – which represents investors with collective assets of $7 trillion (£4.3tr) and lobbies firms to disclose their climate change strategies – reporting that 31 resolutions were withdrawn before they went to a vote after the companies involved agreed to new climate-related commitments.

In addition, the 2009 proxy season saw the first majority shareholder vote in favour of a climate change resolution when Idaho-based utility IDACORP saw more than 51 per cent of shareholders vote for the establishment of greenhouse gas reduction goals, while six of the 28 resolutions that were voted on secured more than 30 per cent support.

"Investor pressure is prompting more companies to see the value of making their businesses more climate-friendly," said Mindy S Lubber, president of Ceres. "By measuring and lowering the carbon footprint of their operations and products, these companies will have a distinct advantage as the global economy shifts to cleaner energy sources."

Michael Passoff, associate director for As You Sow, the lead filer on the IDACORP resolution, hailed the vote as a major breakthrough in the history of shareholder activism. "The game-changing majority vote at IDACORP shows that investors want companies to do more to address climate change," he said. "It is the first environmental resolution to get a majority vote in 30 years of shareholder activism."

There are also signs that further victories are likely in the future, with Ceres reporting that influential financial analysts increasingly support climate-related resolutions. For example, RiskMetrics Group supported three quarters of the resolutions that went to vote, while PROXY Governance supported 15 resolutions representing more than half the number that were voted on.