US investors hold firms to account over climate-related challenges

Concern about climate change is growing among US investors, with many putting pressure on companies involved in environmentally risky activities to address key sustainability challenges.

Shareholders in the country filed 110 resolutions to 94 firms on sustainability in businesses exposed to climate-related risks, according to sustainable investment organisation Ceres.

Resolutions proposed by investors focus on energy efficiency, methane and carbon dioxide emissions reduction and limitation of new polluting coal-fired power plants.

The investors submitted potential solutions after companies made commitments to reduce their greenhouse gas emissions, gas flaring and adverse impacts from fracking.

For example, oil producer Continental Resources was questioned over flaring at its well sites and agreed to stop.

Ceres chief Mindy Lubber said, “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.

“Investors saw especially important progress in tackling flaring, hydraulic fracturing and methane emission impacts, all key contributors to climate change.”

Among those who filed resolutions are some of the country largest pension funds, such as the California State Teachers Retirement System (CalSTRS), the New York State and New York City Comptrollers’ Offices, socially responsible investors and religious organisations.

Ceres reported that the number of shareholder resolutions about climate risk and sustainability went up from 30 a decade ago to more than 100 in 2012.

In June, the firm published a blueprint for asset owners and pension funds to help them deal with the risks of climate change, as these will have “profound effects on investment returns in the years to come”, according to Lubber.

Further reading:

Ceres urges investors to integrate sustainability strategies

Global investors call for guidelines for sustainability disclosure

Investors propose disclosure on sustainability performance

Metric launched to help investors compare sustainability of firms

The Guide to Sustainable Investment 2013