August 13, 2008

Corporate Boards Paying Attention To Environmental Issues

About 25 percent of Fortune 500 companies now have a board committee overseeing environmental issues, compared with fewer than 10 percent five years ago, according to Ceres President Mindy Lubber, Wall Street Journal reports.

Companies like Integrys Energy Group, Quicksilver Resources, and Tesoro have created separate environmental panels, joining established ones at companies like DuPont, Occidental Petroleum. and Rohm & Hass.

Such panels try to ensure decision makers effectively handle conservation efforts, new environmentally-friendly ventures, compliance with environmental regulations and related business risks.

A good example is the special panel at American Electric Power. It was created in 2003 in response to a shareholder resolution urging the director to assess how the company would deal with potential regulations to reduce CO2 and other power-plant emissions. In 2006, the panel was awarded the highest U.S. ranking for board involvement in climate change from Ceres.

Still, less than one-fifth of energy industry executives surveyed by KPMG said sustainability was a permanent agenda item at board meetings, and 29 percent said it had never come up at such gatherings.

Activists say focusing board committees on the environment doesn’t ensure eco-friendly behavior; citing Exxon Mobil Corp, which has a special panels to monitor safety, health and the environment but is criticized for the lack of a comprehensive strategy to lower GHG emissions.

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