Record Number of U.S. Companies Face Shareholder Concerns About Climate Risks

U.S. and Canadian corporate giants will face a record number of resolutions demanding greater disclosure of climate risks at their annual meetings this spring.

Investors have filed 95 global warming resolutions with 82 firms in every industry — a 40 percent leap over last year's 68 climate resolutions — according to data from Ceres, a Boston-based coalition of investors and environmentalists.

Mindy Lubber, president of Ceres, said the boost signifies "a very clear knowledge" that climate risk is "not only an environmental or social or natural resource concern, but a major financial risk and opportunity."

Jack Ehnes, Ceres board member and CEO of the California State Teachers Retirement System, the second-biggest U.S. public pension, declared it "a very important day for investors."

The increase in resolutions follows recent guidance from the Securities and Exchange Commissions (SEC).

In January, the SEC voted 3-2 to issue interpretive guidance for publicly traded firms to consider coming carbon laws and related issues when determining what information to disclose in their corporate filings — the idea being that climate policy will alter their financial results. The decision marked the first economy-wide climate risk disclosure requirement in the world.

Lubber said that most of the 95 resolutions filed in 2010 pertain to issues in the SEC guidance, including strategies for cutting carbon dioxide emissions and adapting to climate-related impacts, such as rising sea levels.

The list of companies affected includes corporate, banking and utility giants, such as Wal-Mart, Proctor & Gamble, Bank of America and Massey Energy.

Oil majors, most notably ExxonMobil and ConocoPhillips, have found themselves particularly caught in the cross-hairs of investor groups.

This year, the two oil firms were asked to undertake reviews of risks associated with their investments in carbon-heavy oil sands production in Alberta, Canada. Environmental activists have dubbed the tarry bitumen of the oil sands the dirtiest fuel on Earth. Mining it, analysts say, produces two to six times more greenhouse gases than light oil and leaves behind toxic tailings ponds with potentially high cleanup costs.

"Investors want to know what will the return on investment be if low-carbon fuel standards take hold in the United States," Lubber said.

British firms face similar opposition. Shareholders there are seeking risk disclosure from oil sands leader Shell, as well as BP and the Royal Bank of Scotland.

Fair Pensions, a UK-based campaign group, launched an online tool last week to try to "mass mobilize" around the oil sands resolutions. Citizens can contact their pension providers to lobby support for resolutions, or email directly one of BP and Shell's largest shareholders. More than 1,200 people have made their voices heard, the group said.

New Target: Coal Ash

Another hot shareholder issue for 2010 is coal ash, even though it does not fall under the new SEC climate guidance.

Investors led by Green Century Capital Management filed a resolution against Atlanta-based Southern Company, the nation's largest electric power generator and second-biggest carbon polluter, targeting the hazards of coal ash disposal.

"We believe that the environmental hazards associated with coal ash pose substantial financial and regulatory risks to the utility sector," said Larisa Ruoff, director of shareholder advocacy for Green Century.

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