Are we witnessing the beginning of a new trend? The history of shareholder proposals to enhance disclosure regarding climate change has been a dismal one. But suddenly, this proxy season, we have climate change proposals succeeding at two—and, as of [May 31, 2017], three—major companies. Is this the start of something big?
The proposals asked each of the companies—Occidental Petroleum, PPL and ExxonMobil—to issue a report providing a “2 degree scenario analysis”—a term that refers to the goal of the Paris Climate Accord of limiting global temperature increases to 2 degrees Celsius (3.6 degrees Fahrenheit). The report would assess the impact on the company’s asset portfolio of long-term climate change, explaining (as stated in the Occidental proxy) “how capital planning and business strategies incorporate analyses of the short- and long-term financial risks of a lower carbon economy,” including specifically, “the impacts of multiple, fluctuating demand and price scenarios on the company’s existing reserves and resource portfolio.” The proposal to Occidental was submitted by Wespath Investment Management and the Nathan Cummings Foundation and was subsequently supported by a coalition of other large asset owners that included CalPERS, and the proposals to PPL and ExxonMobil were submitted by the New York State Common Retirement Fund.