Numerous religious organizations, such as churches/synagogues, hospitals, and foundations with investments in major corporations, have recently filed shareholder resolutions requesting these corporations to disclose their energy efficiency performance and greenhouse gas emissions.
They did this through the Interfaith Center on Corporate Responsibility ( www.iccr.org ), an organization that exists for this very purpose. The corporations include Home Depot, Lowe’s, and Bed Bath and Beyond. Some corporations have complied, others have requests still pending.
The ICCR sounds like a terrific way for religious communities to engage their beliefs. Shareholders would be a point of great leverage, no?
Still, how can we be reasonably sure this will lead to substantive change, and not just greenwashing?
3 comments
October 3rd, 2006 at 12:31 pm
Stuart Price
Resolutions that prompt corporations to disclose GHG emissions and other env. issues can be very effective in at least highlighting the basic issues for shareholders. However, without strong support from the Board of Directors, these resolutions can be short-lived.
As a part-time financial manager, I believe we can have more significant impacts if we first team with those corporations that tend to agree with the basic premise of reducing GHGs to mitigate climate changes.
Most major corporations have already documented how they stand on the climate change issue. Some, like Exxon Mobil, may not cast themselves as green companies, but they do at least recognize the issue and put their engineers to work mitigating emissions. Others - like BP, Duke Energy, Home Depot, and Bank of America - make more aggressive and more transparent efforts to make a difference.
BTW, such companies are also more likely to endorse mandatory GHG limits at the federal level.
Based in Washington, I am very interested in teaming with fellow Yale F&ES participants to facilitate such corporate participation/education.
What do you think?
October 4th, 2006 at 2:02 pm
Tom Harris
I think it makes sense for shareholders to pressure companies on issues they consider important. However, if they are going to do this, they need to properly research the issue first and then understand whether the issue is an important one or not or else their pressuring is simply following political correctness and may be worse than useless. In this case, many stockholders would discover that there is an enormous debate raging in the climate science community about the magnitude of the human contibution to global climate change. I think most investors would sensibly conclude that until the science is more mature, pressuring companies to do something, or not to do something, about GHG emissions is a costly gamble and that they should wait until the verdict is in before deciding what to do (if anything).
Take a look at the 23 minute on-line video to see what I mean: http://www.friendsofscience.org/index.php?ide=3
October 19th, 2006 at 8:59 am
Caroline Rennie
Corporations are, as Robert Monks puts it, externality machines. The goal of the corporation is to ensure that it has the lowest possible costs to manufacture, market and distribute its products. One means is to ensure that costs to the environment, largely free today, are born by the community or nature. Hence some mining company’s practice of declaring bankruptcy at the end of the mine’s life, and put closure and remediation costs on the local community.
Public (stakeholder) pressure that creates costs to the corporation - poor public relations, legislative initiatives, and shareholder pressure, are the most direct levers we have today to encourage corporations to step up and take responsibility. Or, we ensure that this responsibility is defined by law.
This doesn’t need to be so, as this project shows. Today many corporations use CSR as a way of managing potential stakeholder pressure, but not as means to inform their business. Interface is a clear example of a company defining its business in terms of sustainable practices, and giving itself a timeline to meet that goal. This is the transformation that shareholders-as-owners can effect - changing the frame from defensive, mitigation and risk management, to opportunity.
The buffer that we must address is the mutual funds - who are actually the shareholders today, and who are not rewarded on long-term vision. The big question is how we create “reponsibility” and sustainability understanding in this sector - and how we create structural mechanisms to ensure rewards for investments in more sustainable companies.