"Corporate Shareholders Are Getting Nervous About How Climate Change Will Affect Their Investments"
Shareholders and large pension funds are getting skittish about how climate change could threaten the companies they’ve invested in. That’s according to The Daily Climate, which picked up on a new data release by Ceres — a U.S. organization dedicated to more sustainable business practices — that documents corporate shareholder meetings throughout the United States.
Ceres’ numbers show that in this year’s recently-concluded round of shareholder meetings, 110 shareholder resolutions were filed at 94 different U.S companies, related to everything from climate change, to hydraulic fracturing disclosure, flaring, the future environmental and financial risks of fossil fuel exploration, and environmental sustainability.
Some of the US’s largest public pension funds were among those filing resolutions, including the California State Teachers’ Retirement System and the New York State and New York City Comptrollers’ Offices. Ceres estimates that along with other large institutional investors these groups manage funds worth in excess of $500 billion in assets.
“The strength of this year’s proxy season shows unwavering investor concern about how companies, especially energy companies, are managing the profound climate-related risks of fossil fuel production, including traditional and unconventional oil and gas extraction,” said Mindy Lubber, president of Ceres.
According to The Daily Climate investor resolutions concerned with climate change have shot up from about 30 ten years ago to over 100 last year. And the year before that, in 2011, in the run up to the COP 17 climate talks, international investors representing $20 trillion in assets worldwide sent a letter calling for “renewable energy, energy efficiency and decarbonisation” policies to create new jobs and businesses, spark innovation, and provide a framework for sustainable long-term economic growth.
One of the two issues that came up the most in the filings was a lack of transparency regarding company exposure to climate change risks — “without qualitative reporting, shareholders cannot be assured that a company is taking real steps to minimize these risks,” the head of a major investment fund pointed out. The other issue was the possibility that fossil fuel companies could be left unable to exploit their reserves if governments actually take the steps necessary to rein in greenhouse gas emissions. A report earlier this year from the Carbon Tracker Initiative and the London School of Economics estimated that $6 trillion could be wasted purchasing oil, coal, and natural gas reserves depending on the police choices made by the international community.
Largely due to that latter risk of “unburnable” reserves, Norway’s Storebrand recently decided it would exclude 13 coal companies and 6 oil sands companies from its $30 billion or more in assets. HSBC also issued a a company-by-company report of the risks, and Standard & Poor’s even released a new ratings service of oil company’ creditworthiness based on these factors.