Investors Persuade Big-Box Retailers to Disclose Energy and Climate Performance

Investors Persuade Big-Box Retailers to Disclose Energy and Climate Performance

In response to shareholder requests, two leading big-box retailers and the nation's largest shopping mall company have agreed to significantly expand reporting and disclosure on energy-efficiency performance, with the two big-box retailers also agreeing to discuss greenhouse gas emissions.

Investors persuaded The Home Depot in Atlanta, Ga., Lowe’s in North Wilkesboro, N.C., and the Simon Property Group in Indianapolis, Ind., to disclose their strategies and performance on energy efficiency and climate-related topics. The three companies collectively manage more than 500 million square feet of building space and are especially vulnerable to energy costs for heating, cooling and lighting their buildings.

Investors requested the reports through shareholder resolutions filed with the companies last fall. While those resolutions were withdrawn over the past few weeks, similar requests have been filed and are still pending with Liberty Property Trust, Centex Corp., Standard Pacific, Bed Bath and Beyond, and Whole Foods.

"Both Lowe’s and The Home Depot deserve credit for agreeing to expand their reporting to shareholders on energy efficiency and greenhouse gas emissions," said Lance E. Lindblom, president and chief executive officer of the Nathan Cummings Foundation, which filed the shareholder resolutions with Lowe’s, The Home Depot, and a half-dozen other companies. "As concerns about rising energy prices and climate change continue to increase, we believe the focus on energy efficiency will intensify. Companies, such as The Home Depot, that think strategically about these issues will be better positioned financially in the years ahead."

The Nathan Cummings Foundation was joined in filing the resolutions by several religious investment funds that are part of the Interfaith Center on Corporate Responsibility (ICCR), a group of over 200 religious investment funds, many of which are actively involved in filing global warming shareholder resolutions. Catholic Healthcare West co-filed the resolutions with The Home Depot and Lowe’s, while the Benedictine Sisters co-filed only with The Home Depot.

The Home Depot and Lowe's have agreed to disclose information relating to the following:
  • Green/renewable power consumption
  • Specific information on kWh of solar power generated by the companies
  • Company policies on energy efficiency
  • Companies’ integrated energy management systems
  • Facility operation and maintenance programs as they relate to energy efficiency
  • Company views on GHG emissions
The Home Depot also agreed to discuss the following:
  • How energy efficiency measures impact its bottom line
  • Targets for renewable energy usage
  • Targets for reducing GHG emissions or emissions intensity
  • Climate change and its possible implications for the company’s operations
The New England Yearly Meeting of Friends Pooled Funds (Quaker) and the Sierra Club Mutual Funds filed a similar energy efficiency resolution with Whole Foods. The resolution focuses entirely on the company’s energy efficiency programs and performance, and does not relate to its recent announcement to purchase 100% wind-generated power for all of its North American stores.

"Whole Foods has taken an important leadership position in purchasing renewable wind energy, but is still missing a significant opportunity to bolster its bottom line through improved energy efficiency," said Mark Orlowski, board member of the New England Yearly Meeting of Friends Pooled Funds, expressing his disappointment in the company’s failure to respond positively to the shareholder resolution.

The companies are among more than two-dozen U.S. businesses -- including seven electric power companies, four oil and gas companies, six real estate firms, four big-box retailers, two insurance companies, two banks and one auto company -- with whom investors filed global warming shareholder resolutions as part of the 2006 proxy season.

The resolutions are part of growing effort by leading U.S. investors seeking more disclosure and action from U.S. companies on the risks and opportunities they face from climate change. The investors include many of the nation’s largest city, state and private pension funds, as well as labor, foundation, religious and other institutional investors. Many of the investors are part of the $3 trillion Investor Network on Climate Risk, an alliance of more than 50 institutional investors directed by Ceres.

"More investors than ever before are recognizing that climate change is a serious business issue and are demanding answers from companies on their strategies for dealing with it," said Mindy S. Lubber, president of Ceres, an investor coalition that helped coordinate the shareholder resolution filings.

This year’s filings come on the heels of record-high voting support for global warming resolutions in the 2004 and 2005 proxy seasons. Investors achieved 28% voting support on a resolution with ExxonMobil in 2005 -- the highest support level on a climate-related resolution at the company.