One way of judging investor sentiment is through the types of investor resolutions filed each year. This year, a record 95 resolutions involving climate change have been filed. That is a 40 per cent increase over last year’s proxy season, according to Ceres, a coalition of investors, environmental groups and other public interest groups working to address sustainability issues.
It says that the 95 resolutions have been filed with 82 US and Canadian companies, including some of the US’ biggest coal companies, electric power and oil producers; homebuildiers; big box retailers; financial institutions and other businesses investors believe are not adequately disclosing and manging potential climate-related business impacts. These include ExxonMobil, ConocoPhillips, Southern Company, and so on.
In the words of Mindy Lubber, president of Ceres, which helps coordinate the shareholder filings:
As the SEC recently affirmed with its disclosure guidance, climate change presents clear material risks and opportunities for US busiensses – and investors have a right to know which companies are well prepared and which are not.
Jack Ehnes, chief executive of the California State Teachers’ Retirement System, which manages $131bn in assets, put it this way:
We want our companies to closely look at the impact climate-change legislation and regulation have on them, to realistically assess those risks, and to consider the indirect consequences of climate change-driven regulation and business trend son thei ractivities. The SEC’s interpretive guidance outlines exactly the kind of action we have been asking our portfolio companies to take with regards to the issues raised by climate change. It fits with our role as a long-term investor focused on providing lasting value of for the educators of California and their families.
The SEC issued guidance in late January to clarify what publicly-traded companies must disclose to investors in terms of climate-related material effects on business operations.
So even as Congress fears signing climate legislation into law, it seems investors are increasingly behind it. They realise the world is changing, and companies are going to have to start accounting for carbon emissions at some point. Better get the framework in place now, so the risks all this will pose to US companies will become clear. That will give them a better sense of the potential impact on their investments.