Investors target companies for poor climate policies

A coalition of environmentally concerned investors is targeting 10 companies that it's identified as lagging behind industry peers in responding to climate change -- and half of them are South-based energy giants. The investors have filed shareholder resolutions urging the firms to focus on the risk and opportunities presented by a warming planet to prevent their stock price from taking a climate-related hit.

The resolutions are among a record 42 global warming resolutions filed with U.S. companies as part of the 2007 proxy season -- nearly double the number of climate-related resolutions filed just three years ago. Demanding greater disclosure from companies on their response to climate-related business trends, the resolutions were filed by state and city pension funds as well as labor, foundation, religious and other institutional shareholders who together manage more than $200 billion in assets.

"Many U.S. companies are confronting the risks and opportunities from climate change, but others are not responding adequately -- and they may be compromising their long-term competitiveness and shareholder value as a result," said Mindy Lubber, president of Ceres, a coalition of investors and environmental groups that helped coordinate the shareholder filings. "We want all companies to understand the business impacts of climate change -- and plan for it accordingly. It's what any corporate director would expect of their CEO."

The 10 companies named to the Climate Watch List include Virginia-based Dominion Resources, which for the past three years has ignored shareholder requests to disclose its financial exposure from possible climate regulations; Dallas-based TXU Corp., which is planning to build 11 new coal-fired plants while shrugging off shareholder requests to reveal how it's responding to pressure to reduce CO2 emissions; and Houston's ConocoPhillips, which has made no significant investments in wind, solar and other renewable energy technologies.

The list also includes Virginia's Massey Energy, the nation's fourth-largest coal producer, which has not disclosed how it intends to respond to pressure to cut greenhouse gas emissions; and Texas-based Exxon Mobil, whose investors are unhappy with its risk disclosure and general lack of response to climate issues.
 

Among the investment managers who joined in creating the Climate Watch List was North Carolina State Treasurer Richard Moore, whose office manages more than $70 billion in pension funds.

"Those companies that are ignoring the serious risks posed by climate change do so at their own peril," Moore said. "Acknowledging the business risks posed by climate change is just good business, and shareholders demand it."

The day after Ceres unveiled the list during a teleconference, comments Moore made during that event were the focus of a Raleigh News & Observer story titled "N.C. a leader in response to warming." In it, Moore noted that no North Carolina-based companies were on the Climate Watch List, and then went on to praise five of the state's companies that he described as "leaders" on the climate issue, including Duke and Progress Energy. Both companies have disclosed their strategies for dealing with climate change, and Duke CEO Jim Rogers has been an outspoken advocate for a national carbon tax.

But Moore's comments stirred up controversy at home among sustainable energy advocates, who say the two utilities have failed to do enough to earn such praise. They point out that Duke is pursuing plans to build additional coal-fired power plants in the state -- and it wants them exempted from any upcoming carbon regulations.

Jim Warren directs the Durham-based N.C. Waste Awareness and Reduction Network, which is part of a coalition of environmental and consumer groups fighting Duke's plans to increase coal burning. He criticized Rogers' position as "aggressively hypocritical," and said he was taken aback by Moore's comments.

But Moore's remarks make a great deal of sense politically: After all, he is considered a likely Democratic candidate for governor in 2008 -- and Progress and Duke Energy's political action committees were among the 10 most generous in the state during the 2006 election cycle, according to a recent analysis (pdf) by Democracy North Carolina, an electoral watchdog group.