Net-Zero by 2050: Investor Risks and Opportunities in the context of Deep Decarbonization of Electricity Generation

This report anayzes the twenty largest U.S. publicly traded electric power generators, which combined produce nearly 50 percent of the U.S. electric power sector’s CO2 emissions. Of the twenty, only one (Xcel Energy) has committed to a net-zero target. Seven have set long-term targets that are not yet in line with the net-zero objective, and the remaining twelve have not set any long-term targets at all. None of the companies can yet demonstrate that their capital expenditures are in line with achieving a net-zero target, and many have invested heavily in policy-related activities that oppose climate mitigation efforts.

The report recommends that electric utilities commit this year to net-zero carbon emissions by 2050 at the latest, and adopt four critical boardroom reforms to ensure that their investments, executive compensation, and policy influence are aligned to that target. Given the material risks to investors, the urgency of action, and the complexity of the electricity decarbonization transition required, the report presents a case for holding utility boards of directors accountable if they fail to adopt these reforms.

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Read the press release here


2018 Asset Manager Climate Scorecard

A new report analyzing the world’s thirteen largest asset managers’ U.S. proxy voting in carbon-intensive industries reveals that they’re exerting limited and uneven influence over management, despite calls from shareholders to de-carbonize corporate business models. Overall, the managers demonstrated a high degree of alignment with company management. Moreover, the largest asset managers show the least support for shareholder climate proposals—BlackRock and Vanguard supported only 23 percent and 33 percent, respectively, of climate proposals related to addressing climate change.

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Read the press release here


Asset Managers and Climate-Related Shareholder Proposals: Report on Key Climate Votes

This report finds that in spite of growing support for climate resolutions, approximately half of top asset managers opposed more than 50% of key climate-related proposals in 2017. Also, several top managers – five covered in this study – voted against more than 85% of key climate proposals. Eight of the top ten asset managers failed to support key climate votes more than 50% of the time.

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Spending Against Change Key Metrics Assessment of Climate Change Governance and Political Influence Spending in the Energy and Utility Sectors

This report finds that 21 of the largest energy and utility companies in the U.S. have failed to prioritize environmental and climate risk and have spent at least $673 million over six years to influence elections and regulations. The report warns of the growing risk to investors and shareholders of inadequate board-level governance on climate change issues, including the risk of consumer blowback, increased exposure to financial losses from carbon regulations, and failure to invest in low-carbon energy options that are gaining share in the marketplace.

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The Key Climate Vote Survey

The KCVS is a resource for institutional investors seeking to better manage climate risk in their investment portfolios and ascertain how their investment managers are addressing this risk and promoting boardroom climate competence in their firm-wide proxy voting activities. The identifies the most consequential 2017 votes on climate business risk shareholder resolutions and management proposals to elect directors and approve executive compensation. The KCVS then analyzes the publicly disclosed voting records of the largest global investment managers on these key proposals.

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ExxonMobil (XOM): Board Policies, Composition and Pay Undermine Ability to Mitigate Key Risks

This shareholder brief indicates that the board of directors must undergo substantial reform if it is to competently meet the challenges. While the company has a new CEO and a new board member with climate expertise, the board’s investor engagement policies, composition, succession planning, and pay practices do not reflect corporate governance best practices.

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Utility Climate Change Readiness: A Business Plan Analysis

This study examines the climate change orientation of the 25 largest investor- owned utilities, allowing investors to make informed judgments. It finds that five of the largest US utilities are unprepared for the economic risks of climate change. Duke Energy, Southern, FirstEnergy, DTE Energy and American Electric Power are not pursuing business strategies consistent with the scientific realities of climate change and the accompanying financial, strategic, operational and competitive risks.

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Proxy Voting Conflicts: Asset Manager Conflicts of Interest in the Energy and Utility Industries

This report finds that the managers who tended to vote in favor of management received more in fees and stewarded more assets than all other managers combined, and that their voting practices were even more management friendly at companies with which they had business relationships. The asset managers examined manage assets worth billions of dollars for the retirement plans sponsored by the portfolio companies at which they voted. The managers also receive millions of dollars in fees for managing such plans.

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