Are Corporate Investors Actually Doing Something About Global Warming?
Environmentalists are increasingly effective at pressuring corporations to adopt non-binding pledges to global warming in their operations, according to a new analysis.
These shareholder agreements may be non-binding, but they signal to investors and corporate competitors they are taking the issue seriously, according to a soon-to-be-released report by environmentalist investment nonprofit group Ceres.
Ceres’ analysis found that support for resolutions asking companies to report on the risks of global warming topped 45 percent this year. Support was especially high among energy company shareholders. ExxonMobil, Occidental Petroleum and utility PPL Corporation saw support for such global warming resolutions rise to more than 50 percent for the first time ever.
“Sometimes it takes these symbolic kind of gestures to prompt actual change,” Michael Ferguson, director of U.S. energy infrastructure at the credit rating agency S&P Global Ratings, told Axios. “I don’t think shareholders see climate as a fleeting issue, so even if these resolutions aren’t binding for the moment, policies are going to shift.”
Activist shareholders have been pushing global warming resolutions for years, but didn’t see much success until institutional investors and public pensions got more involved.
“Investment risk is increasing, and investors care – not because they believe or don’t believe in climate change – but because they care about the value of their investments,” Kevin Book, managing director of the research firm ClearView Energy Partners, told Axios. “The issue doesn’t go away just because Trump came to Washington.”
Public pensions and traditional investors have gotten caught up in the so-called” divestment” movement, which has been orchestrated by environmental groups, like 350.org and Greenpeace. Environmentalists claim divestment will “de-legitimize and stigmatize” the fossil fuel industry.
But the movement seems to largely be symbolic.
A 2015 study by the National Association of Scholars found divestment “would have no meaningful effect on the Earth’s temperature.” Previous studies found fossil-fuel divestment can significantly harm an investment portfolio because of higher management fees.
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