Wednesday, February 14, 2007

Companies Pressed to Define Green Policies

NY Times
February 13, 2007


Correction Appended

Tracey C. Rembert, the coordinator of corporate governance and engagement for the Service Employees International Union, acknowledges that Wells Fargo is the country’s largest purchaser of renewable energy offsets and has specialists on staff studying all of the implications of climate change on its businesses.

Still, Ms. Rembert’s union has filed a shareholder’s resolution asking Wells Fargo to specify how it is addressing both the risks and market opportunities presented by global warming.

She wants to know if Wells Fargo is lending money to companies that could be forced into bankruptcy because of greenhouse gas regulations, if the bank is financing new technologies for alternate energy or if it is offering consulting services to clients on climate issues.

“We want them to rethink their business, and set themselves up to take strategic advantage of climate change,” Ms. Rembert said.

The New York City Comptroller’s Office feels the same way about Dominion Resources, an electric power and natural gas company, and Massey Energy, a coal mining company. The Sierra Club Mutual Fund feels that way about the retailer Bed Bath & Beyond, and the Calvert Group about ACE Insurance.

All of them are calling upon companies to provide proof that their business decisions also consider issues involving climate change.

“It is incumbent on us as trustees of pension funds to find out how companies are mitigating risk to our investments from climate change,” said Kenneth B. Sylvester, assistant comptroller for pension policy for the New York comptroller.

According to Ceres, a coalition of investors and environmental groups, investors have filed 42 resolutions asking for such information during the 2007 proxy season, up from 31 last year. And today, Ceres will issue a list of 10 companies that shareholders say are not looking at climate change through an investor’s eye and may not be investing in alternative energy technologies.

“This has nothing to do with social investing,” the president of Ceres, Mindy S. Lubber, said. “These investors are owners who want the companies to stop being laggards when it comes to minimizing risk and taking advantage of opportunities.”

Like most corporate hit lists regarding global warming issues, the Ceres list is heavily weighted with energy companies. In addition to Dominion and Massey, it includes Exxon Mobil, Allegheny Energy, Consol Energy, Conoco Phillips and TXU. In each case, the investors are complaining that the companies do not pay enough attention to the impact of climate change on their bottom lines — and thus share prices. “Renewables are the fastest growing segment of the energy market, and ConocoPhillips is letting an important market opportunity go by,” said Shelley Alpern, director of social research and advocacy for Trillium Asset Management Corporation. Conoco could not be reached for comment.

Many companies say they are bewildered at their inclusion. “The way we shape our future business footprint and strategy will certainly evolve as the policies evolve,” a spokesman for Dominion Resources, Mark G. Lazenby, said.

Lisa Singleton, a spokeswoman for TXU, said that the company, which has been criticized by environmental advocates for its plans to build coal-fired plants, has dedicated almost $2 billion to new technologies. And, she said, it has posted much of the information on its Web site.

Other companies say they are being faulted not for inaction, but for silence. Michael J. Callahan, vice president and corporate council of Bed Bath & Beyond, said that his company was “addressing the issues” that climate change poses, but “we have not produced the type of reporting that a group such as Ceres is seeking.”

Mary S. Wenzel, vice president of environmental affairs for Wells Fargo, is more specific. Ms. Wenzel said Wells Fargo has invested $125 million in renewable energy projects in the last six months, and has lent more than $750 million to developers of green buildings in the last few years.

“We have not issued the kind of public policy statements that shareholders seem to want,” she said, “but we are certainly demonstrating that we are addressing risk and seizing opportunities.”

Maybe so — but Ms. Rembert still wants more proof.

“Climate change will involve regulatory risks, reputational risks and physical risks to the companies in any bank’s portfolio,” she said. “We need to know that Wells Fargo is ahead of the curve in addressing it.”

Correction: February 14, 2007

An article in Business Day yesterday about 10 companies that Ceres, a coalition of investors and environmental groups, says may not be paying enough attention to global warming, rendered incorrectly a word in a quotation from Mary S. Wenzel of Wells Fargo, who discussed the bank’s track record on green investing. She said, “We are certainly demonstrating that we are addressing risk and seizing opportunities” — not “ceasing” opportunities.

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