Eco Investors Score Environmental Victories
Once a year, publicly traded companies across America hold annual meetings for their shareholders. The purpose of these meetings is to elect board members, allow management to make presentations on growth outlook and attend to other business that requires shareholder approval.
These meetings, while often either dull town-hall type affairs or overblown media events (depending on the size and scope of the company), can be very important gatherings for investors interested in changing corporate business practices, particularly when management is resistant. The way this is done is through the introduction of shareholder resolutions proposals to be put to a vote by an investor or a coalition of investors with shared goals. In the socially responsible investment world, the filing of shareholder resolutions is one the most effective of ways of getting companies to change their behavior when it comes to CSR issues.
While some shareholder resolutions will make it to a vote, often times, they will be successfully withdrawn prior to a vote when a compromise is reached between management and shareholder. This preemptive move is often done when management doesn’t want too much attention drawn to the issue, but will agree to address some of the key points raised in the resolution.
With annual shareholder meetings of publicly traded companies now largely behind us (they are normally held in the first quarter of a company’s fiscal year), it’s time to take a look at how successful socially responsible investors were in changing corporate behavior when it comes to environmental business practices.
As I wrote in my previous post Climate Change Shareholder Resolution Roundup, according to Ceres, there was a total of 96 climate change and energy-related shareholder resolutions filed by SRI investors in the 2011 proxy season. The majority of these resolutions (66) were filed with electric power and energy companies by large institutional shareholders: pension funds, mutual funds and non-profit organizations.
Earlier this week, The Financial Times ran a piece detailing many of the victories socially responsible shareholder activists had in the climate change arena this year. Some of the highlights include:
20 shareholder resolutions were successfully withdrawn.
Southern Company, the Atlanta-based utility company, has agreed to publish a report analyzing the risks of water shortage by November 2011. The lead filer for this resolution was the Connecticut Treasurer’s Office.
Resolutions for Peabody Energy and Arch Coal to issue reports on greenhouse gas omissions have been withdrawn. The lead filer for both of these resolutions was the New York State Comptroller’s Office.
Resolutions calling on JC Penney and Marriott to adopt climate principles have been withdrawn. The lead filer for both of these resolutions was Calvert Funds.
For readers interested in a more detailed list of SRI shareholder resolutions filed in 2011, the following websites are good resources:
This article originally appeared on Just Means.