Political action through environmental shareholder resolution filing: applicability to Canadian Oil Sands?

Abstract

Research on the efficacy of social and environmental shareholder resolutions often fails to consider their strategic value in the context of policy outreach. Research on investor-driven governance networks and shareholder activism as a social movement illuminates strategies for organized shareholder coalitions to use a coordinated resolution filing campaign to shape the rules and norms under which business operates. These strategies are examined through qualitative case study analysis of two environmental shareholder campaigns: one organized by Ceres (Coalition for Environmentally Responsible Economies) addressing climate change and the other organized by Investor Environmental Health Network (IEHN) addressing hydraulic fracturing. These case studies show that resolution filing with broad investor appeal and linked to a policy agenda can achieve change beyond targeted companies. Case study insights may contribute to the formation of a Canadian shareholder coalition organized around improved corporate disclosure of Oil Sands risks and improved government monitoring of environmental impacts. Investor groups, mostly Canadian, have framed the environmental and social issues in terms that resonate with the investment community and policy makers. Investor activists in Canada, the US and Europe have filed a number of shareholder resolutions at Oil Sands companies. This marks progress towards investor coalition formation with coordinated shareholder action and a multi-jurisdictional reach.

Keywords:

• shareholder activism
• social movement
• shareholder resolutions
• climate change
• oil sands
• hydraulic fracturing

Notes

Telephone interviews were conducted with Rob Berridge, Senior Manager, Investor Programs and Andrew Logan, Director, Oil & Gas and Insurance Programs, on August 26, 2011, with follow-up interviews with Rob Berridge on October 31, November 8 and November 11, 2011.

See: Kroger Co.’s 2010 SEC proxy filing for the full text of the resolution. http://www.sec.gov/Archives/edgar/data/56873/000120677410001281/kroger_def14a.htm.

Ceres’ Company Network is a network of large public companies with whom Ceres works to integrate environmental and social considerations into business practices. See http://www.ceres.org/company-network.

The Global Reporting Initiative's Year in Review report for 2010/11 shows that as at March 2011 around 1,900 companies globally had adopted GRI sustainability reporting standards. See https://www.globalreporting.org/resourcelibrary/GRI-Year-In-Review-2010-2011.pdf

See: CDP Global 500 Report 2011: Accelerating Low Carbon Growth for a 2010/11 comparison of disclosure by FT 500 corporations. https://www.cdproject.net/en-US/Pages/global500.aspx.

Telephone interview with Richard Liroff on October 30, 2011 as well as follow-up emails.

See: ISS Requests Comments on Proposed Hydraulic Fracturing Policy. Bracewell & Guiliani, October 28, 2011. http://www.bracewellgiuliani.com/index.cfm/fa/news.advisory/item/7f1520b2-f868-43b5-8b51-5aaf0f628fe3/ISS_Requests_Comments_on_Proposed_HydraulicbrFracturing_Policy.cfm.

See: The Green Century Equity Fund Shareholder Response to the Opposition Statement of Chesapeake Energy Inc. Proposal #8 Relating to Hydraulic Fracturing, filed March 6, 2010. http://www.sec.gov/Archives/edgar/data/877232/000121465910001574/c62102px14a6g.htm.

See: As You Sow Foundation Shareholder Rebuttal to the ExxonMobil Opposition Statement Regarding Hydraulic Fracturing Risks, filed April 5, 2011. http://www.sec.gov/Archives/edgar/data/34088/000121465911001530/f53110px14a6g.htm.

‘In issuing comments to a company, the staff [of the Divisions of Corporation Finance and Investment Management] may request that a company provide additional supplemental information so the staff can better understand the company's disclosure, revise disclosure in a document on file with the SEC, provide additional disclosure in a document on file with the SEC, or provide additional or different disclosure in a future filing with the SEC.’ http://www.sec.gov/answers/commentletters.htm.

Aggregate numbers are provided at the TMX website http://www.tmx.com/en/listings/sector_profiles.

See investor letters at NEI Investment's website: http://www.neiinvestments.com.