Shareholders, Working In Concert, Change Kinder Morgan’s Tune On Sustainability

Think back to 2014: At the 20th annual United Nations Climate Change Conference of the Parties (COP 20) in Lima, Peru, political action seemed more achievable than, perhaps, it does today.  And think back to last October:  Despite the COP 21 global agreement reached in Paris in 2015, the United States had declared its intention to withdraw and political action on the climate front seemed stalled.  However, also in those years and around those times, other parties were at the table, advocating for responsible stewardship and disclosure:

  • In 2014, Kinder Morgan saw, for the first time, a climate change-related proposal on its ballot.  Actually, there were three!

  • In 2015, three again; and again in 2016; and every year since.  

  • Institutional investors individually and collectively, through global networks, engaged Kinder Morgan.  Some—including the New York State Comptroller, First Affirmative Financial Network, Zevin Asset Management, Robeco Institutional Asset Management B.V., Mercy Investment Services, and Miller/Howard Investments—filed environmental resolutions.  The requests ranged from publication of a sustainability report, to a 2-degree analysis and scenario report, to a report on methane emissions and reduction targets.   

  • Each year, an increasing number of fellow shareholders voted to support of the resolutions.  

So as politicians wrangled, as lobbyists lobbied…. Investors engaged.  

Each year, an increasing number of #shareholders are voting in support of #environmental resolutions, including action on #climatechange. @Kinder_Morgan @MH_Investment #ProxyPreview #ClimateAction

What was the outcome?

Over these years, Kinder Morgan moved from providing an absolute dearth of information to adding a Methane Reduction Commitment to “recognizing that addressing climate change is a global priority.”

Then, in 2018, a landslide:  Majority votes for two of the three resolutions!  The votes triggered another more impressive event, publication of the company’s inaugural Environmental, Social, and Governance Report in October.  

The report includes many of the suggestions and recommendations investors have requested, including using guidance from the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-Related Financial Disclosures (TCFD).  It’s informed by the Global Reporting Initiative (GRI), CDP (formerly The Carbon Disclosure Project) and the Ceres Roadmap for Sustainability.  Many investors consider these five resources to be best-in-class.  

Kinder Morgan’s report provides information on methane, greenhouse gas emissions reductions and targets, and a timeline for adding additional information going forward.  A 2-degree scenario report is due out in 2019.

Let’s take a moment to acknowledge the result of dozens of letters and conversations with company management, millions of shares voted in support of our resolutions, the support and collaboration of powerful investor networks such as Ceres, the Interfaith Center on Corporate Responsibility and the trillion-dollar UN Principles on Responsible Investment.  All helped by the tenacity of committed proponents.  We don’t know if any single thing finally met the internal company threshold for action, but we know the investor community offered strength and persistence.  

It may take a village to raise a child.  Sometimes it takes the investment world to move a corporation!  But it happens, and we are grateful for it.

Now, back to work.

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Luan Jenifer
Chief Operating Officer, Miller/Howard Investments