NY State Comptroller DiNapoli follows up climate resolution successes with more action on GHGs

New York State Comptroller Thomas DiNapoli has seen a run of successes in the New York State Common Retirement Fund’s stewardship campaign on climate shareholder resolutions. Most recently, on April 2, the fund announced that three major US energy companies, DTE Energy, Dominion Energy and Southwestern Energy, had agreed to explain how their businesses will be impacted by efforts to achieve the Paris Agreement’s climate goals and how they will adapt to a lower carbon future. These agreements are as a result of the fund’s filing shareholder resolutions as lead filer at the companies; the resolutions have now been withdrawn. Pressure had been building as resolutions last year received heavy support from shareholders at Dominion (47.8%) and DTE Energy (44.9%). Outstanding resolutions are still in place at Chesapeake Energy, Scana and Great Plains Energy, and similar resolutions have been filed by Arjuna Capital, As You Sow, Zevin and a variety of religious funds. The latest agreements followed several others earlier in the year. First, in January, Duke Energy agreed to analyse how the Paris Agreement’s goal of “restricting global temperatures to no more than 2 degrees Celsius above pre-industrial levels will impact [its] business”. Under the agreement, Duke Energy will produce its climate risk assessment in the first quarter of 2018. As with the latest agreements, this one led to the fund’s resolution requesting the action to be withdrawn. Then, in February, American Electric Power (AEP), one of the largest carbon emitters in the US, adopted new, long-term targets for lowering greenhouse gas (GHG) emissions. AEP’s commitments were published in the same month. A resolution requesting these targets was also withdrawn.Then, in March, DIY retailer Lowe’s announced that “it was making significant progress towards reducing its carbon footprint and increasing the energy efficiency of its stores nationwide”. This agreement was reached without even filing a resolution. The NY fund and Boston Common Asset Management had been in discussions with the company while considering a possible shareholder proposal to seek lower emissions targets, but Lowe’s announcement “made the formal proposal unnecessary”.
In summary, the fund, in partnership with other shareholders, has filed more than 120 climate change-related shareholder resolutions and reached agreements with 43 companies to: analyse climate risks, set GHG reduction targets and renewable energy and energy efficiency goals, prevent deforestation, publish sustainability reports, and appoint directors with environmental expertise. Following up on these successes, DiNapoli wrote letters on April 3 to ten of the largest GHG emitters in the fund’s portfolio asking them to adopt “time-bound, quantitative, company-wide” targets for long-term GHG emissions reductions, based on the needs outlined in the Paris Climate Accord. The letter also asks them to issue a report this year on their plans to achieve these targets. Emissions data provided by the CDP (formerly Carbon Disclosure Project) was used to identify the largest emitters in the fund’s portfolio.
The companies the letters were sent to are: Phillips 66 Co., Xcel Energy Inc., Valero Energy Corp., building materials supplier Martin Marietta Materials Inc., Berkshire Hathaway Inc., generator Calpine Corp., Delta Air Lines Inc., Next Era Energy Inc., Entergy Corp. and Southern Company.