SustainableBusiness.com reported recently that a record 109 shareholder resolutions were filed during this year’s proxy season to urge U.S. and Canadian companies to address climate change, fossil fuel usage and related sustainability issues. An additional 48 resolutions were withdrawn after the companies made voluntary commitments to address these issues, according to the report on research conducted by the Interfaith Center on Corporate Responsibility.
The most common sustainability-related topics were natural gas fracking, fossil fuel usage for electric power, water scarcity, oil refinery safety, and sustainability reporting (including climate or greenhouse gas reduction strategies).
Among the examples cited in the report was Walden Asset Management re-filing a resolution with Layne Christensen to push the company to issue a sustainability report. Last year’s resolution on the same topic produced a 60.3 percent vote in favor. This year, Layne Christensen of Mission Woods, Kansas, which provides drilling services for water infrastructure, mineral exploitation and energy, recommended a “FOR” vote on Walden’s resolution, which led to a 92.8 percent vote in favor. The company also published its first sustainability report.
Many so-called experts believe the success of such resolutions, and companies’ willingness to at least entertain the possibility of additional sustainability measures, will embolden the activists to be ever more aggressive. But I’m not convinced. I actually think there is an opportunity here for many well-intentioned, communications-savvy companies to get ahead of the activists, who certainly have other, potentially more contentious issues that they are pursuing through shareholder resolutions.
My sense is that even many mid-sized companies are now acknowledging the potential “shared value” (see this Harvard Business Review article for a discussion of this concept) in proactively addressing sustainability issues at the Board and senior management level without being under the high-profile pressure of a pending shareholder resolution or other “hammer.” Implementation will be smoother and the results will be better.