SGI members score progress with utilities on climate change

This year, SGI members filed resolutions with two midwestern utilities: CMS Energy and WEC Energy Group. Each resolution aimed for the public disclosure of an assessment of the long-term business impacts of limiting global warming to under 2-degrees Celsius, as adopted by the Paris Climate Agreement.

We have great news: both resolutions have been withdrawn as the companies agreed to the main components of the resolutions. Despite the Trump administration’s decision to end the Clean Power Plan, both midwestern utilities rise to meet the challenges of climate change. In fact, CMS announced last week that they reduce carbon emissions by 80 percent and no longer using coal to generate electricity by 2040.

Sr. Ruth Geraets, PBVM of the Sisters of the Presentation of the Blessed Virgin Mary of Aberdeen, SD who led the filing of the resolution at CMS Energy said, “My congregation is concerned about climate change and the critical need to reduce greenhouse emissions because our mission calls us to care for creation. As longterm shareholders in CMS, we believe having a strategy in place to meet climate challenges head-on will improve CMS’ competitive position over the long term. We were pleased to see CMS step up to this challenge with its recently announced clean energy breakthrough goals.”

With respect to the dialogue with WEC Energy Group, on behalf of the School Sisters of Notre Dame, Central Pacific Province, Tim Dewane said, “Pope Francis has said, ‘Reducing greenhouse gases requires honesty, courage and responsibility.’ We thank WEC Energy Group for its efforts in this regard so far. We believe they are not only good for the planet, but they are also in the bottom-line best interests of the company, its customers and shareholders.”

“These two utility companies are climate leaders in the Midwest,” said Frank Sherman, Executive Director of SGI. “They recognize that market forces and their customer base are pushing them to exceed federal climate regulations and state renewable portfolio standards. Although they are big companies, utilities have a very local focus and are highly dependent on the social license granted by the communities where they operate.”

Our partners at ICCR shared a press release about this win which can be found here.

ICCR 2018 Proxy Resolutions and Voting Guide

A key tenet of socially responsible investing is the voting of proxies. Proxy voting gives shareholders a say in the workings of corporations, allowing those who own the company to decide on matters of corporate governance. Reviewing both company and shareholder sponsored resolutions is critical in supporting good governance and effective socially responsible practices.

ICCR recently published their 2018 Proxy Resolutions and Voting Guide (download here). This annual Guide has been published since 1974.  This year’s Guide outlines the proxy season, contextualizes the 10 issue areas, and provides the language of the 266 resolutions that were filed by ICCR members. It also describes shareholder advocacy and the proxy process (pg 213). They hosted a webinar (slides here; listen here) to provide an overview of the proxy season and profile a few of most important campaigns including: gender pay gap and paid family leave; ethical labor recruitment; methane emissions; pollinator decline; and drug pricing and the opioid crisis. ICCR members have already negotiated 33 substantive agreements with companies, and have withdrawn their resolutions as a result. Successes include:

  • Costco agreed to disclose its gender and race-based pay gaps;
  • T. Rowe Price has hired a new responsible investing official;
  • AT&T agreed to its first-ever disclosure on key sustainability goals;
  • Marten and Saia agreed to begin training their drivers to spot human trafficking;
  • WEC Energy Group agreed to prepare a 2 degree scenario assessment report (led by School Sisters of Notre Dame).

You are encouraged to use ICCR’s Proxy Resolutions and Voting Guide to vote your proxies or to ask your asset manager to vote them for you.

Voting your proxies

Frank Sherman, Executive Director (Seventh Generation Interfaith, Inc.)

Shareholders have partial ownership of the companies they hold in their portfolios. They rely on a Board of Directors to act on their (as well as other stakeholder’s) behalf to oversee the management of the company. Shareholders are given the opportunity, typically annually, to voice their opinions by electing the Board Directors and voting on various proposals included in the company’s proxy statement. For responsible investors, this is more than an opportunity – it’s a responsibility.

Asset owners, asset managers, hedge funds, and asset service providers typically rely on proxy service companies to recommend how to vote on company proxies based on their research and guidelines. The two largest proxy service companies are Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Company (GL). Ceres ​recently published guidelines that indicate how these proxy service firms will typically issue their recommendations on various ​environmental, social and governance (​ESG​)​ resolutions​. Shareholders ​that propose resolutions to companies ​can influence the proxy service company recommendations by meeting with their analysts to explain / support ​their proposal.

Typically​,​ asset manager​s​ ​(e.g. Merrill Lynch, Fidelity, CBIS, etc.) ​will ​vote your proxies for you based on their proxy service firm’s recommendations unless you give them specific instructions to do something different (which they may or may not follow). You have an option to ​tell them that you want to ​vote your own proxies.

On the other hand, if you ​own mutual funds or ​exchange traded funds (​ETF’s​) rather than individual equities​, you forfeit your right to vote ​company​ proxies to the fund management company​ who often vote with management’s recommendations​​. You also lose the right to ​fil​e shareholder resolutions​.​ A responsible investor will consider the social and environmental profile of the ​mutual ​fund​ or ETF, as well as the fund management company​ which will be voting your proxies. Some of the better ones are ICCR members! In any event, investing in mutual funds or ETF’s is an impediment to direct corporate engagement. You may want to dedicate a portion of your portfolio for holding individual equities to facilitate this strategy.

As socially responsible investors, SGI members understand that their investment portfolio is a catalyst for change. We should ensure we use all the tools available to us to make that change.​

ICCR releases 2017 Proxy Resolutions and Voting Guide

Accompanying photo used with permission, Interfaith Center for Corporate Responsibility

ICCR recently published its 2017 Proxy Resolutions and Voting Guide. The Guide outlines the proxy season and contextualizes the 283 resolutions that were filed by ICCR members, with a deeper dive on several key campaigns they are leading. Read the Executive Summary or download the full report. ICCR hosted a webinar to provide an overview of the upcoming proxy season in advance of the public release of the Guide. Listen to the webinar recording.  Or, view the side deck here.
SGI members are advised to forward the Guide to their financial managers with instructions to vote your proxy in support of these resolutions.