As in the past, most of the proposals that set out possible energy solutions to climate change challenges are about using more renewable energy, often coupled with questions about energy use and energy efficiency. Many of these resolutions have proven to be fertile ground for agreements before and four already have been withdrawn this year. In all, nine proposals have been filed to date; only one has been challenged.

The proposals are quite similar. Investors want Archer Daniels Midland, Goodyear Tire & Rubber, Harley Davidson and Yum Brands to report

assessing the feasibility of adopting quantitative, company-wide goals for increasing the company’s use of renewable energy and any other measures deemed prudent by company management, to substantially reduce the company’s greenhouse gas emissions and climate change risks associated with the use of fossil fuel-based energy.

NYSCRF proposals to Dollar General, Keurig Dr Pepper and Under Amour similarly ask for a study on company-wide goals to increase clean or renewable energy use “to substantially reduce the company’s greenhouse gas (GHG) emissions and climate change risks associated with the use of fossil-fuel-based energy,” with a report within one year.

MGE Energy shareholders have a more precise request, seeking a report by October 2020 “describing how they can provide a secure, low cost energy future for their customers and shareholders by eliminating coal and moving to 100% renewable energy by 2050 or sooner.” The proponents are concerned about two coal plants owned by the company and the financial risks they may pose to the company given cheaper renewable energy sources and customer preferences.

Finally, Green Century asked Verizon Communications to “report assessing the feasibility of increasing the scale, rigor, and pace of Verizon’s utilization of renewable energy and other measures deemed prudent by company management to substantially reduce the Company’s greenhouse gas emissions and climate change risks associated with the use of fossil fuel-based energy.”

Withdrawals—Company commitments for action or continued dialogue have produced withdrawals so far at Archer Daniels Midland, Dollar General, Goodyear and Verizon Communications.

SEC action: MGE Energy has lodged a challenge, contending the proposal is ordinary business.

ELECTRIC VEHICLES DRIVE SHIFT TO LOW CARBON ECONOMY

As companies consider how to reduce their emissions to comply with the goals of the Paris Climate Treaty, they can look to electric vehicles as a feasible option. Carbon emissions from vehicles contribute significantly to global warming, and the transportation sector is one of the larger contributors to greenhouse gas emissions (GHG) in the U.S. As institutional investors seek to offset and mitigate the rising levels of carbon and other GHGs, electric vehicles (EVs) are an increasingly viable solution. With sales of EVs growing faster than predicted a few short years ago, the outlook for EV production and adoption is becoming increasingly robust.

Mary Jane Mcquillen
Head of Environmental, Social and Governance Investment, ClearBridge Investments

Robert Buesing, JR.
Research Analyst for Consumer Staples, ClearBridge Investments

Pawel Wroblewski, CFA
Director, Portfolio Manager, ClearBridge Investments