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February 15, 2014
ICCR Publishes 2014 Proxy Resolutions and Voting Guide
    by Robert Kropp

The number of shareowner resolutions addressing environmental health filed by members of the Interfaith Center on Corporate Responsibility in 2014 increases sharply over 2013, reflecting the urgency of action on climate change.

The financial case for incorporating environmental, social, and corporate governance (ESG) into investment and business decision-making is well established by now. Perhaps the relationship is best exemplified by the concept of stranded assets, according to which fossil fuel companies will have to leave a significant majority of the assets on their books in the ground if climate change is going to be adequately addressed. The Carbon Bubble, Carbon Tracker called it in a 2011 report, aligning its potential impacts with those of the dot com and housing crashes. But in fact it's likely to be far worse.

The 2014 Proxy Resolutions and Voting Guide was recently published by the Interfaith Center on Corporate Responsibility (ICCR), and there is no shortage of shareowner resolutions filed by the organization's member that seek to mitigate financial risks to investors, companies, and the economy. In fact, several filed by members this year specifically address the issue of stranded assets: “Given the growing public concern about climate change, investors are concerned that actions to significantly reduce GHG emissions could reduce the value of Chevron’s oil and gas reserves and/or related infrastructure before the end of their expected useful life,” a resolution filed with the oil and gas giant states. “Investors require additional information on how Chevron is preparing for potential scenarios in which demand for oil and gas is greatly reduced due to regulation or other climate-associated drivers. Without additional disclosure, shareholders are unable to determine whether Chevron is adequately managing these risks or seizing related opportunities.”

A sharp increase in the number of resolutions addressing environmental health increased the total filed by ICCR members to 193, up from 180 last year. Members also report engaging in 232 dialogues with corporations.

The companies receiving the highest number of resolutions are both in the oil and gas industry. Investors filed seven resolutions with both Exxon and Chevron.

Another two resolutions were filed with Bank of America and PNC, requesting that the financial institutions report on emissions from their lending portfolios. And five resolutions requested that companies review their lobbying practices relating to climate change. “Energy companies have regularly opposed new legislation or regulation addressing climate change,” the Guide states. The text of one such resolution reads, “Company political spending and lobbying on energy policy, including through third parties, are increasingly scrutinized. For example, investors question company public policy advocacy through the US Chamber of Commerce, which often obstructs progress on climate-related legislation.”

As critically important as financial considerations are to sustainable investors, ICCR describes itself as a faith-based investor organization, and issues of social justice are at least as important to its members. “As so much of our work is approached through the social justice lens,” the Guide states, “it is common for a wide variety of resolutions to cite human rights risks.” This year's proxy resolutions include 19 addressing human rights and human trafficking, up from 14 last year. “There is increasing recognition that company risks related to human rights violations, such as litigation, reputational damage, and project delays and disruptions, can adversely affect shareholder value,” one such resolution states.

“In recent years, ICCR members have contributed to the creation of many corporate human rights policies across all sectors,” according to the Guide.

The 2014 Proxy Resolutions and Voting Guide is available for free download on ICCR's website. In addition to the resolutions themselves, the Guide list the companies targeted by the resolutions as well as the ICCR members filing them. The annual publication of this invaluable guide is essential reading for anyone who seeks to understand what the term proxy democracy really means.


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