InvestorsChallenge Natural Gas Companies to Increase Transparency, Reduce Risks toPublic Health and the Environment From Fracking Operations    Shareholders file resolutions withChevron*, Exxon Mobil*, and 8 other companies to spur more responsiblemanagement practices   Boston, MA—For a third consecutive year, concerned investors havetargeted energy exploration and production companies that rely heavily onhydraulic fracturing (fracking)and fail to disclose critical information aboutthe ways they are managing the associated risks.     Public concern about the environmentaland social impacts of fracking operations are growing across the country andcan have real business implications for the companies involved.   “Bans and moratoria are denials of companies’ sociallicense to operate and impose a wide range of costs on companies, ranging fromthe costs of delays to complete loss of access to valuable resources where sunkcosts must be written off,” said Larisa Ruoff, Director of ShareholderAdvocacy for Green Century CapitalManagement (Green Century). “Right now, companies are not providinginvestors, or the communities in which the companies operate, sufficientinformation on the steps they are taking to address and mitigate the risksassociated with hydraulic fracturing operations so shareholders are demandingincreased transparency.”   This year, shareholders have filed resolutions with ten companies,including Exxon Mobil, Chevron and Chesapeake Energy* calling on the companiesto provide a detailed account of how they are addressing the risks associatedwith community concerns, regulatory impacts, tightened regulations, andmoratoria.    “This year’s effort builds on the remarkable successachieved by investors last year, when similar proposals received an average 40percent** vote.  These high votes send strong messages to companies thatsignificant portions of their shareholders require increased disclosure on thisissue,” said Richard Liroff, Executive Director of the Investor Environmental Health Network(IEHN).  IEHN and Green Century coordinate investors’ engagements withcompanies on fracking.    These resolutions are part of a broader investor initiative challengingcompanies to address climate and sustainability risks.  Thus far in the2012 proxy season, investors working with Ceres, a coalition of investors andpublic interest groups working with companies to address sustainabilitychallenges, have filed 86 resolutions with 69 companies.   “Investors are concerned about the financial risks associatedwith the environmental, health, and social impacts of fracking,” saidMichael Passoff, Senior Strategist for As You Sow, which has filed atExxonMobil and Ultra Petroleum* since 2010.  “Concern about watersources, toxic chemicals, and wastewater has led to new regulations in severalstates and proposed federal legislation. Explosions, contamination incidents, and millions ofdollars in fines demonstrate that things can and do go wrong,” hecontinued.   This season, shareholders have a new tool in theirdialogue with companies.  In December, IEHN and the Interfaith Centeron Corporate Responsibility (ICCR) released “Extracting the Facts: An Investor Guide to DisclosingRisks from Hydraulic Fracturing Operations,” which isintended to help increase disclosure and mitigate the impacts of fracking.    “In order to maintain their social license tooperate, companies must fully disclose the steps they are taking to minimizerisks, to acknowledge their challenges and failures, and to clearly define themethods they will use to continually improve operations,” said LauraBerry, Executive Director of ICCR.  “The Guide offers a road map forcompanies to respond to the heightened concerns around fracking, andarticulates industry best practices that will reduce the risks, andconsequently, the impacts.”     Shareholder proposals were filed at Anadarko*,Chesapeake Energy, Chevron, EOG Resources*,Exxon Mobil, Noble Energy*, Penn Virginia*, RangeResources*, Stone Energy*, and UltraPetroleum.  These proposals have been filed by the following investors and investor advisors:  As You Sow,Green Century Capital Management, Mercy Investment Program, Miller/HowardInvestments, Sisters of St. Francis of Philadelphia,and Trillium Asset Management. 
Shareholders file resolutions with Chevron*, Exxon Mobil*, and 8 other companies to spur more responsiblemanagement practices
 
Boston, MA—For a third consecutive year, concerned investors havetargeted energy exploration and production companies that rely heavily onhydraulic fracturing (fracking) and fail to disclose critical information aboutthe ways they are managing the associated risks.  
 
Public concern about the environmentaland social impacts of fracking operations are growing across the country and can have real business implications for the companies involved.
 
“Bans and moratoria are denials of companies’ sociallicense to operate and impose a wide range of costs on companies, ranging from the costs of delays to complete loss of access to valuable resources where sunkcosts must be written off,” said Larisa Ruoff, Director of ShareholderAdvocacy for Green Century CapitalManagement (Green Century). “Right now, companies are not providinginvestors, or the communities in which the companies operate, sufficientinformation on the steps they are taking to address and mitigate the risksassociated with hydraulic fracturing operations so shareholders are demandingincreased transparency.”
 
This year, shareholders have filed resolutions with ten companies,including Exxon Mobil, Chevron and Chesapeake Energy* calling on the companiesto provide a detailed account of how they are addressing the risks associated with community concerns, regulatory impacts, tightened regulations, and moratoria. 
 
“This year’s effort builds on the remarkable success achieved by investors last year, when similar proposals received an average 40 percent** vote.  These high votes send strong messages to companies that significant portions of their shareholders require increased disclosure on this issue,” said Richard Liroff, Executive Director of the Investor Environmental Health Network (IEHN).  IEHN and Green Century coordinate investors’ engagements with companies on fracking. 
 
These resolutions are part of a broader investor initiative challenging companies to address climate and sustainability risks.  Thus far in the 2012 proxy season, investors working with Ceres, a coalition of investors and public interest groups working with companies to address sustainability challenges, have filed 86 resolutions with 69 companies.
 
“Investors are concerned about the financial risks associatedwith the environmental, health, and social impacts of fracking,” said Michael Passoff, Senior Strategist for As You Sow, which has filed at ExxonMobil and Ultra Petroleum* since 2010.  “Concern about watersources, toxic chemicals, and wastewater has led to new regulations in several states and proposed federal legislation. Explosions, contamination incidents, and millions of dollars in fines demonstrate that things can and do go wrong,” he continued.
 
This season, shareholders have a new tool in their dialogue with companies.  In December, IEHN and the Interfaith Center on Corporate Responsibility (ICCR) released “Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations,” which is intended to help increase disclosure and mitigate the impacts of fracking.
 
“In order to maintain their social license to operate, companies must fully disclose the steps they are taking to minimize risks, to acknowledge their challenges and failures, and to clearly define the methods they will use to continually improve operations,” said Laura Berry, Executive Director of ICCR.  “The Guide offers a road map for companies to respond to the heightened concerns around fracking, and articulates industry best practices that will reduce the risks, and consequently, the impacts.”  
 
Shareholder proposals were filed at Anadarko*, Chesapeake Energy, Chevron, EOG Resources*,Exxon Mobil, Noble Energy*, Penn Virginia*, RangeResources*, Stone Energy*, and UltraPetroleum.  These proposals have been filed by the following investors and investor advisors:  As You Sow, Green Century Capital Management, Mercy Investment Program, Miller/HowardInvestments, Sisters of St. Francis of Philadelphia, and Trillium Asset Management. 

Sustainability Reporting describing the company’s environmental, social and governance business practices—co-filed with Walden Asset Management

Hydraulic Fracturing: Community Impacts – Risk Assessment -- disclosure on the impacts of fracking on local community and the financial risks of these impacts. This resolution includes both environmental impacts to water quality, health impacts from exposure to water and air, and is broad enough to include social ills documented in fracking towns.

Here is a sampling of the significant press coverage after last year’s votes.

New: Political Spending Resolution – response to Citizens United ruling. Calls on corporations to review policies and oversight processes related to political spending and public policy, both direct and indirect including through trade associations, and present a summary report by September 2012.

by Claude Solnik
Published: October 3, 2011

It looks like a few firms have agreed to open the books on their political donations, a year after the Supreme Court unceremoniously closed the door on once strict limits to contributions.

A trio of Fortune 500 companies whose stock is held by the New York State Common Retirement Fund have agreed to disclose their political campaign contributions and procedures, after requests from New York State Comptroller Thomas P. DiNapoli.

DiNapoli said Marriott International, Yum Brands (parent of Pizza Hut and Taco Bell) and Limited Brands(parent of Henri Bendel and Victoria’s Secret), whose stock is held by the state’s $146.9 billion retirement fund, agreed to disclose contributions to political campaigns and advocacy groups and outline their approval process for political contributions.

The comptroller and the Center for Political Accountability began a push last year for greater disclosure after the Supreme Court’s Citizens United decision opened the doors to big corporate contributions.

“There’s cause for concern when corporations make it their business to finance campaigns,” DiNapoli said. “Now we’re asking corporations to do the responsible thing for their shareholders and for the public. These three companies have heeded the call.”

After finding that about 70 of the S&P 500 companies had public policies regarding disclosing political donations, the comptroller and the center sent out letters requesting information from the remaining firms.

“We engaged with these companies. Some came forward and said we’ll work with you,” said Eric Sumberg, a spokesman for the comptroller. “We proposed shareholder resolutions at some.”

The retirement fund filed nine shareholder resolutions, leading to agreements with these three firms during the proxy season.

The New York State Common Retirement Fund as of Sept. 16 owned nearly $150 million combined in these firms’ shares including 1.6 million shares of Yum Brands worth $86.2 million; 873,292 shares of Limited Brands worth $35.2 million and 938,109 shares of Marriott International worth $27.4 million.

DiNapoli said he’s continuing to push for disclosure of corporate contributions as a way of monitoring spending of firms whose shares are held by the state an their interaction with the political process.

“Proxy season is in the spring,” Sumberg said. “Over the next couple of months, we’ll look at which companies to engage with the next season. Hopefully, we’ll have more successful engagements.”

Today’s shareholder vote at the Smucker’s annual meeting marked an important step towards getting the company to report on climate risks associated with their coffee business and supply chain. The proposal received roughly 30% support (based on preliminary numbers). While 30% might not sound notable, a recent report on the 2011 proxy season puts the vote in perspective: the report found that investor support for shareholder resolutions on environmental and social issues rose to a 20.5% average approval rate (the first time support has ever reached the 20% mark). 30% sure sounds like a lot when measuring against that baseline. Analysts at Trillium Asset Management and Calvert Investment Management also report that first year resolutions generally garner far less support as investors are initially introduced to the proposals.

This vote sends a clear signal to Smucker’s leadership that shareholders are raising legitimate concerns around disclosure of social and environmental risks in their coffee supply chain. Trillium and Calvert will engage with company representatives in the fall pressing them to respond meaningfully to investor concerns about coffee and climate change. While the two investment firms hope to make progress with the company over the course of the next year, they will reserve the right to re-file the resolution in 2012 if necessary.

Oxfam will help keep the pressure on Smucker’s to adequately respond and we’ll keep you updated on opportunities to engage.

When you think of Smucker’s, jelly and jams typically come to mind, but they are just the tip of the iceberg. The J.M. Smucker Company is actually a leading distributor of Folgers and Dunkin’ Donuts coffee brands (who knew?), with coffee accounting for 40% of the company’s net sales and nearly half of its profits. That’s a whole lot of coffee, considering that the company sells and manufactures many other widely-used household brands like Crisco, Jif, and Pillsbury.

Coffee crops are highly sensitive to weather and temperature fluctuations making it particularly vulnerable to climate change. This past year the cost of coffee skyrocketed following increased demand and poor harvests in high-producing countries like Colombia and Brazil. In 2010 the Securities and Exchange Commission (SEC) adopted new guidance for publicly traded companies, requiring companies to disclose climate change risks, such as physical risks to a company’s assets and supply chains.

Disclosing these risks will create much needed transparency to help investors understand how companies’ supply chains, and the communities that support them, could be impacted by increasingly extreme weather and other likely results of climate change.

This disclosure is essential because community risks are business risks. As climate change increasingly threatens coffee harvests, the impacts are being felt first and worst in the communities where coffee farming is a way of life. But those threats echo all the way up the supply chain. Understanding these risks, and ensuring that companies like Smucker’s are adequately managing the anticipated hazards, is critical to investors and farmers alike.

Reporting in response to the SEC guidance has generally been weak, and Smucker’s is no exception. Very few companies have increased their reporting on material climate risk save for a few sentences added to their annual sustainability reports. This is a bad sign for shareholders who are already feeling the impacts of climate-related risks on their investments.

For example, record high food and commodity prices this year, owing at least in part to increased temperatures and lower crop yields, have led to social unrest in some countries where companies do business and to financial instability in companies unable to pass higher costs onto consumers. Consumers too have felt the pressure, since May 2010, Smucker’s has jacked up prices 34% just to try to stay a step ahead of the commodities market. Smucker’s competitors are responding by making public commitments to sustainability that will help their bottom line.

Already jittery investors are starting to perk up. Two socially responsible investment firms, Trillium Asset Management and Calvert Investment Management, Inc., have filed a shareholder resolution requesting that the Board of Directors provide a report to stockholders describing how the company will manage the social and environmental risks and opportunities connected to the company’s coffee business and supply chain. Shareholders will have a chance to vote for this proposal at tomorrow’s annual meeting at Smucker’s headquarters in Ohio.

Smucker’s has tried to block the resolution and are nervous that disclosing the risks could rattle investors. But if the resolution passes, Smucker’s will be on-the-hook to conduct a detailed risk assessment of climate change on their coffee supply chain and publicly disclose the findings.

Public disclosure of risks is the first step towards ensuring communities in Smucker’s supply chain are adequately protected from impending climate risks such as floods, droughts and extreme weather events. It is critical that small-scale farmers gain access to adequate resources to prepare for and respond to these threats. Not only will such resources will protect communities, they will surely benefit global companies who rely on a stable supply of high-quality coffee beans.

Government policies in support of small farmers are critical to their long term productivity, but this must go hand-in-hand with sound, sustainable corporate practice. This resolution will help multi-national corporations such as Smucker’s to wake up and smell the coffee. As they say, “with a name like Smucker’s, it’s got to be good”. We agree.

Read the original article here.