The activist investor group Ceres recently issued its findings with respect to 2013 shareholder resolutions relating to corporate sustainability issues, including climate change, supply chain issues, and water-related risks. Ceres tracked more than 100 shareholder resolutions filed with 94 U.S. companies, reporting that environmental/social resolutions accounted for 40 percent of resolutions, up from 30 percent just three years ago.
Ceres reports that many of the resolutions directed to the manufacturing and service industries involved requests for board oversight of corporate sustainability issues as well as for comprehensive disclosure of data through sustainability reports. Ceres's analysis found that shareholders achieved favorable results in a number of key areas, including the following:
Responsible Sourcing and Supply Chain Management. A number of shareholder groups filed resolutions to press for "sustainable" sourcing of raw materials, in these cases primarily sustainable palm oil supplies. Ceres reports that a number of companies targeted by the resolutions agreed to convert to palm oil certified by one or more sustainability-focused organizations, such as the Roundtable on Sustainable Palm Oil, which oil supply has a smaller greenhouse gas footprint than palm oil generated from more invasive clear-cutting practices. Similarly, though focused more specifically on social issues, investors pressed for consideration of sustainability in supply chain management, coming in large measure on the heels of the human tragedies of the Bangladesh building fire.
Corporate Sustainability Reporting. Companies in a number of sectors (financial, manufacturing, housing) agreed to begin comprehensive sustainability reporting as a result of shareholder resolutions. In one instance, a resolution filed with a large manufacturer seeking sustainability reporting received more than 67 percent of shareholder votes, indicating strong investor interest in sustainability data, including data related to climate change and greenhouse gas emissions.
Separately, Ceres performed an additional review of resolutions related specifically to climate change and fossil fuel use. Among other findings, Ceres reported that investors filed a number of resolutions with energy sector companies and that more than 40 such resolutions were withdrawn after the target companies agreed to reduce greenhouse gas emissions, gas flaring, and adverse impacts from hydraulic fracking.
These reports reflect the continued focus by activist investor groups on sustainability reporting generally and on climate change issues and risks specifically. This has been a consistent trend in recent years and places continued pressure on corporate boards to closely evaluate their company's sustainability data and to anticipate and manage activist investor resolutions such as the ones highlighted in these reports.
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