Ceres Shines a Light on the Power of Shareholder Proxy Votes

Ceres Shines a Light on the Power of Shareholder Proxy Votes

How do you get corporate sustainability goals to surpass the short-term, profit-focused mentality that's fundamental to publicly held enterprises?

One successful tool is to turn that obstacle into a stepping stone. Ceres has just published a look at the successes they've had using shareholder resolutions on climate, energy and sustainability to shift company committments to sustainability.

The short report, Proxy Power: Shareholder Successes on Climate, Energy & Sustainabiity, looks at what successes resulted from 233 sustainability-focused resolutions filed by Ceres' network of investors.

Just under half of those resolutions -- 111, or 48 percent -- were wins, where companies agreed to address the investors' concerns and the resolutions were withdrawn.

report coverAnd once companies agree to address shareholder resolutions, they are good to their word: Analysis of Ceres' data by David Gardiner and Associates found that more than 80 percent of the companies have achieved at least partial fulfillment of their commitments, and 65 percent have completely met their commitments.

Getting companies on board with sustainability commitments prior to shareholder meetings is one way of making change at those companies. But when resolutions come to a vote it can offer a higher-profile chance to raise awareness within the company and the public about the issues at hand, even if the resolutions aren't successful.

The chart below shows the trends in sustainability-focused shareholder resolutions over the past 11 years, and highlights how resolutions are picking up speed quickly, even if successes aren't keeping the same pace.

figure 1

Whether through successful withdrawals or shareholder votes, these resolutions are affecting the dialogue and shifting company behavior in significant ways. The Proxy Power report offers a few examples of big wins in the last three years.

Among the notable examples:

• When As You Sow filed a resolution in 2009 targeting Idaho-based energy company Idacorp's sustainability commitments, the resolution got 52 percent approval from shareholders, and resulted in a commitment from the company to reduce their emissions by 10 to 15 percent by 2013, as well as the launch of its first wind-energy projects and research into solar generation.
• Through shareholder resolutions across a range of companies, investors convinced Hershey and General Mills to commit to sourcing 100 percent certified sustainable palm oil, and Avon to purchase certified sustainable palm oil offsets. Ceres president Mindy Lubber wrote about the commitments for GreenBiz back in 2010.
• Ceres investors targeted KB Homes, one of the nation's largest home builders, to improve the energy efficiency of their homes. Between 2006 and 2010, the company raised the efficiency of new homes by about 15 percent over 2004 models, with 90 percent of its 2010 homes earning Energy Star certification.

The new report from Ceres offers other case studies in environmental hot spots, including oil and gas industries' fracking policies and utility companies' investments in coal-fired power plants.

The report comes as Ceres announces its next round of shareholder resolutions, including 10 electric power companies and 18 oil and gas companies to disclose their strategies for managing the risks posed by climate change and new legislation around greenhouse gas emissions.

The full report, Proxy Power: Shareholder Successes on Climate, Energy & Sustainabiity, is available for download from GreenBiz.com.

Stock market photo via Shutterstock.