Religious Activists Hype More Failed Shareholder Measures
Acton Institute Powerblog

Religious Activists Hype More Failed Shareholder Measures

The religious shareholders of As You Sow and Calvert Investments are heralding last month’s shareholder vote on greenhouse gas reduction targets as an out-and-out victory.

Ummmm … not so fast. Although the press release on the AYS website trumpets: “Shareholders Vote for Greenhouse Gas Reductions at Midwest Utilities,” the facts tell a much different story. Yes, some shareholders did indeed vote in favor of the AYS/CI resolution, but not nearly enough to pass it:

Citing climate change impacts and financial risks of carbon-intense coal assets, shareholders representing billions of dollars of assets voted for carbon reduction targets at FirstEnergy and Great Plains Energy, showing strong support for a pair of shareholder proposals put forth by non-profit As You Sow and investment group Calvert Investments.

All this from shareholder activists apparently unaware of a little government entity called the Environmental Protection Agency, which, for better or worse, won’t announce its final rules for existing and new, modified and reconstructed power plants until this summer. According to the EPA, the agency will release this summer a Clean Power Plan for existing power plants in states, Native American country and U.S. territories; Carbon Pollution Standards for new, modified and reconstructed power plants; and issue a federal plan for meeting Clean Power Plan goals for public review and comment.

And this:

The proposal at FirstEnergy received support from 19.4% of shares voted, representing $2.2 billion in investments. At Great Plains Energy, one in three shareholders (33.8%) voted for the proposal, representing $872 million in investments voting in favor of carbon reduction goals. In total, $3 billion in shareholder assets demanded climate action from the utilities.

This writer, for one, is highly skeptical of the underlying claim that AYS and CI actually control, respectively, 19.4 percent and 33.8 percent of voting shares of FirstEnergy ($48 billion in assets in 2010) or Great Plains Energy ($2.5 billion in 2014). In what way does their minority stake “control” nearly $3 billion in assets – or assets of any size? How do these assets “demand” climate action? This is a financial fiction.

But such is the climate-change fervor of AYS and CI that precious time and resources must be spent to hold FirstEnergy and Great Plains Energy feet to the fire – regardless the immediate impact on fellow shareholders and customers both rich and poor of the two utilities.

Amelia Timbers, As You Sow’s Energy Program Manager, noted that, “Shareholders have spoken – it is time for utilities to proactively manage their carbon pollution and climate risk. The costs associated with operating carbon intense assets like coal plants are expected to increase as climate change worsens; at the same time, renewable energy prices have fallen dramatically and renewable energy has become a cost-effective alternative to coal power.”

The shareholders resolutions cited studies demonstrating that when companies reduce carbon emissions, business performance is benefitted. “We are seeing that carbon pollution is a business risk for utilities, while low carbon energy drives value,” Timbers added.

Let’s suss this out, shall we, Ms. Timbers? “Business performance is benefitted” by reducing carbon emissions according to unnamed studies, she says. Does this mean every company – including…ahem…utility companies, which rely almost exclusively on fossil fuels – increases business performance by lowering carbon emissions? How can this be? Where is her evidence? Sorry, but Ms. Timbers’ assertion falls into the category of wishful thinking.

The AYS press release concludes:

Shareholders have shown increasing support for resolutions calling for greenhouse gas reductions in recent years, illustrating escalating investor concern about companies’ strategies for addressing climate change. These results indicate strong investor desire for corporate action on climate change, and a need for coal-heavy utilities to quickly shift investments to energy efficiency and renewable energy.

“Quickly shift?” Seriously? How do AYS and CI shareholders in general and Ms. Timbers specifically propose to quickly shift from fossil fuels to renewable energy in the near future? In a perfect world, perhaps we could power the grid with renewables from solar and wind to hydroelectric, nuclear and geothermal. But we don’t live in a perfect world, and each of the renewable energy sources listed above has proven severely lacking wherever they are mandated as a replacement.

In the meantime, we have plentiful, cheap and continuously cleaner fossil fuels (natural gas anyone?) to power our vehicles and heat and cool our homes until something else is developed to complement or replace them. This solution isn’t ideal by any stretch of wishful thinking by climate-change adherents, but it’s a reality that benefits the rest of us who recognize the literal translation of utopia is nowhere.

Bruce Edward Walker

has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. He was managing editor of The Heartland Institute's InfoTech & Telecom News from 2010-2012. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2011 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past five years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Flint, Mich., with his wife Katherine.