Climate Change - Energy Solutions
Most of the proposals that set out possible energy solutions to climate change challenges are about using more renewable energy; a couple ask about energy use, however.
Twelve proposals ask for reports from a jumble of companies—utilities, communications firms, retailers and others—about setting renewable energy use targets. Most are still pending.
The pending resolution at American Tower, Comcast, Community Health Systems, Expedia, General Dynamics, Gilead Sciences and Rite Aid says:
To increase the benefits to our company and to society associated with use of clean energy resources, shareholders request that [the company’s] senior management, with oversight from the Board of Directors, issue a report assessing the feasibility of adopting public, time-bound, quantitative, company-wide goals for increasing energy efficiency and use of renewable energy….within one year…
A resubmission to Kroger seeks a similar report about “assessing the climate change risk reduction benefits of adopting quantitative, time-bound, enterprise-wide targets for increasing its renewable energy sourcing.” The proposal is a resubmission that earned 24.8 percent in 2017. It is substantially the same as one that earned 27.9 percent support in 2016. The same resolution has been withdrawn at Western Union. All the recipients save Kroger and Ameren (which had a related, omitted proposal discussed below) are new targets.
A shareholder group at, MGE Shareholders for Clean Energy, wants aggressive action on renewables uptake and proposes a report within 18 months on how it “can provide a secure, low cost energy future” for “customers and shareholders by eliminating coal and moving to 100 percent renewable energy by 2050 or sooner.”
SEC action and withdrawal:
A detailed proposal to Ameren was omitted because the company pointed out a similar resolution last year did not earn the 10 percent it needed for resubmission. (A similar version of this resolution earned 9.2 percent in 2017 and 11.2 percent in 2016.) The resolution asked for a report on how the company
could protect shareholder value and reduce the risk of stranded assets by aggressive renewable energy adoption including:
- Increasing Ameren’s energy mix to 50 percent renewable energy by 2030.
- Increasing Ameren's energy mix to 100 percent renewable energy by 2050.
- Propose changes to Ameren's strategic plans that could help Ameren achieve the targets identified in (1) and (2) of this resolution.
Comcast is arguing the proposal described above concerns ordinary business since it is about energy expense management and is not significantly related to its business because energy costs are not material to the company. The SEC has not yet responded.
The proponents withdrew at Western Union, citing an agreement, but the company also had challenged the resolution at the SEC, invoking SEC Staff Legal Bulletin 14I. The company said the proposal was not significantly related to its business because it owns only a handful of properties for which it could make decisions about energy use (most are leased).
Entergy has challenged a proposal about distributed energy, which asks it to report
describing how the Company could adapt its enterprise-wide business model to significantly increase deployment of distributed-scale non-carbon-emitting electricity resources as a means of reducing greenhouse gas emissions consistent with limiting global warming to no more than 2 degrees Celsius over pre-industrial levels.
Entergy is invoking Staff Legal Bulletin 14I and says the resolution can be omitted on ordinary business grounds since its focus on distributed energy constitutes “micromanagement.” The company also argues that political battles over renewable energy subsidies are common and do not transcend ordinary business issues, and that its board met to consider the proposal and agrees with this perspective. The SEC has yet to respond. Previous proposals about distributed energy have survived SEC challenges and gone to votes. At Entergy, the resolution earned 35 percent in 2017 and 37 percent in 2016.
Rite Aid has challenged the resolution at the SEC, arguing it relates to ordinary business since it is about energy cost management and a specific type of technology. The challenge notes what it says is a precedent at CVS in 2016 for a renewable energy sourcing request, which was omitted on ordinary business grounds—but that proposal specified a year by which the goals were to be set.
Among the three proposals specifically on energy use, Sustainvest Asset Management asked Apple to require its retail stores to keep their doors shut in the summer when using air conditioning, but the SEC agreed with the company’s contention that it already has addressed the concern with its current policies.
The shareholder group at MGE Energy is reprising its 2017 proposal about electrified transportation options, which received 7.6 percent. It asks that the company
lead a multi-party study of the electrification of the transportation sector in the MGEE service area. The study implementation plan… completed and reported to shareholders within 12 months of the annual meeting. The study implementation plan should include the Company’s strategy to supply renewable energy to the electrified transportation sector, including analysis of long and short-term impacts on carbon reduction, utilization of new company-owned renewable energy, financial and operational opportunities, and risks.