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Investors Blast 43 Firms for ‘Contradictory’ Climate Stance

AT&T, GE, GM and Ford are among the who’s who of corporate America that has been accused of taking contradictory positions on climate change, in letters by almost two dozen investors and investment groups managing $202 billion in assets.

Investors led by Calvert Investment Management and Walden Asset Management sent a letter (pdf) to 43 companies on the board of the National Association of Manufacturers (NAM), urging them to explain how they reconcile their own greenhouse gas-reduction policies with NAM’s intention to strip the Environmental Protection Agency of its powers to regulate GHGs.

The investors say that many NAM board members have set laudable goals to reduce their GHG emissions, and many of the targeted companies regularly report on their progress towards those goals. They include Abbott Laboratories, AEP, Alcoa, Intel and PPG Industries, which have all released sustainability reports in just the past few months.

In one example, the investors’ letter sent to Michael Gambrell, EVP of manufacturing and engineering at Dow Chemical, commends the company’s sustainability efforts. “Dow has established strong climate change emissions goals with measurable baselines and targets,” the letter says. “The company has led the industry via constructive engagement in climate change public policy with other leading businesses as part of the U.S. Climate Action Partnership. Yet these steps are at odds with our company’s work through NAM.”

The investors object in particular to a NAM letter of March 15, supporting an amendment which would have repealed the authority of the EPA to regulate GHG emissions under the Clean Air Act.

The list of targeted companies includes Johnson Controls, named best corporate citizen by Corporate Responsibility Magazine. The list also names major consulting firms that offer climate change and sustainability practices, including Deloitte, Ernst & Young, Grant Thornton, KPMG and PricewaterhouseCoopers.

Other targeted companies include Air Products & Chemicals, Bayer, Boeing, Clorox, ConAgra Foods, Conoco Phillips, C.R. Bard, CSX Corporation, Devon Energy, Dow Chemical, Ecolab, Eli Lilly & Co., Exxon Mobil, H.J. Heinz, Illinois Tool Works, Ingersoll Rand, Merck & Company, Nucor, Pfizer, Praxair, Procter & Gamble, Ryder Systems, Shell, Sherwin-Williams, Southern Company, Toyota and Verizon.

The letter argues that NAM and its member companies should support EPA regulation of greenhouse gas emissions. The authors say that the EPA rules are not overly costly as NAM claims, and that the rules will actually enhance manufacturers’ competitiveness by encouraging energy efficiency and cost savings. A growing number of investors are supporting EPA regulation of greenhouse gases, the letter writers argue.

The letter asks for more information on the cost saving potential of energy efficiency measures that would be required by EPA regulations, and asks the companies to re-evaluate their involvement with NAM.

“Any company supporting NAM’s recent letter to Congress seeking to block EPA’s authority to regulate greenhouse gases harms their public image and reputation as well as forward progress on environmental issues,” Stu Dalheim, director of shareholder advocacy with Calvert Investment Management, said.

Timothy Smith, senior vice president with Walden Asset Management, said:  “Serving on the board of a trade association comes with the responsibility to govern responsibly and hold the association accountable for lobbying that results in environmental harm.”

Besides Calvert and Walden, investors signing the letters were: the Interfaith Center for Corporate Responsibility, BC Investment Management Corporation, Catholic Healthcare West, Green Century Capital Management, the Christopher Reynolds Foundation, Friends Fiduciary Corporation, PaxWorld Management, Boston Common Asset Management, First Affirmative Finaancial Network, Unitarian Universalist Association, SEIU Master Trust, Portfolio 21 Investments, Miller/Howard Investments, Veris Wealth Partners, Parnassus Investments, Mercy Investment Services, Domini Social Investments, Local Authority Pension Fund Forum, Joyce Moore Financial Services, Henderson Global Investors and Loring, Wolcott & Coolidge.

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17 thoughts on “Investors Blast 43 Firms for ‘Contradictory’ Climate Stance

  1. Who wants the EPA to regualte something that the market will handle. All of the companies being targeting have voluntarily made the decision to improve their carbon footprint without the need for government intervention. That’s the way it should be.

  2. NAM’s overall stance on climate change has long been in conflict with the stated views of many of its corporate members. It’s good to see an effort being made to call out these discrepancies and to try to address with NAM leadership.

  3. “…with NAM’s intention to strip the Environmental Protection Agency of its powers to regulate GHGs.”

    While this statement is further explained in subsequent text, if lifted and taken out of context this statement implies that an industry association has power over the EPA. It is inflamatory and misleading to a young or inexperienced consumer of this article and as such it should be corrected.

  4. Oh how sad. It must be that the named deniers are negatively affecting the Investors portfolios. Maybe if these Investors would take time to investigate they would not be part of the Climate Scam.

  5. This was a well-written shareholder letter to the companies. I hope it draws high-level attention and concern at the companies who received it, and that those companies decide to take immediate and effective steps to address the legitimate concerns raised.

    I look forward to a future EL report on how the companies respond.

  6. EPA’s rules for GHG’s attempt to use the Clean Air Act for something it was never intended, and thus is promoting an administrative process (e.g. permitting and reporting) versus actual GHG reduction.

    Many companies that are minor sources of all other pollutants are now required to get a Title V operating permit because of GHG emissions (EPA estinates 3,000 of these sources). Many of us working in the environmental field have been proud of voluntary reductions of GHG’s. Working now on compliance with EPA’s regulations is zero fun because it is producing no environmental benefit except pushing table scraps to consultant to navigate EPA’s uncertain mess (i.e.Tailoring and Reporting rules for GHG’s)and driving our companies to operate plants elsewhere.

    Cap and trade would have been simple compared to what we have now in the US.

    Too bad the socially conscious investors have such a shallow and trusting opinion of EPA rulemaking. These EPA actions in the name of climate change are really damaging for business and the US economy (with limited to no environmental improvement).

  7. Joe – I do, for one. The market has not been handling the whole climate change issue at all well. Many companies continue to look for excuses, and others engage in greenwashing while avoiding actual effective actions. All this is because companies, and the market; are driven by profit, not by our continued well-being.

    Sure, some positive steps are being undertaken, and I am heartened by them. But not without significant resistance and foot-dragging. We need governmental actions, directives, mandates, and policies; to apply additional pressure for change. Time is not on our side here – climate change is not waiting for us.

  8. Matt, your comment is barely worth a reply. Your so-called “Climate Scam” is, in fact, a real threat. Scientists and scientific institutions all over the world agree. Despite your head-in-the-sand outlook to the contrary.

  9. Jim, you are incorrect in your characterization that the EPA rules are simply “promoting an administrative process (e.g. permitting and reporting) versus actual GHG reduction”. The rules will, in fact, promote actual GHG reduction.

    I’m sure that they will also come with additional paperwork. But there is no doubt that, overall, GHG reduction will also occur as a direct result of the EPA rules. Reductions that many companies have not voluntarily undertaken, and that many will never voluntarily undertake on their own.

  10. Joe is spot on. The market will dictate. If the investors are asking questions, that means they are losing their clients due to the issues being raised. Follow the money all. So, the clients and then investors pull out of said bad corps and moves money…in small pieces…one client at a time, 1000 shares at a time…into truly sustainable corps and so on. The water dripping becomes a full bucket.

    Tipping point is upon these bad corps., if not passed already. The people move the market, not the other way.

  11. Doug, you may say that I am incorrect in characterizing EPA rules, however, I am giving my direct experience, not putting forth a theory.

    EPA’s own justification for the reporting rule, which runs several thousand pages, and is dictating rows and columns on 10 spearate spreadsheets/subreports for our facilities, is to provide EPA data to set the stage for future Cap and Trade.

    At some point responsible regulators need to ask at what cost for the incremental improvement in data and accounting. An online system with one report per facility would have served the purpose well enough (similar to what is done on the state level in CA and MA).

    One size fits all regulations from Washington that drive to Master’s or PhD level data submission is not the right thing for across the board requirements.

    What I see from the EPA looks like “old school” 1970’s and 1980’s micro manage versus a performance based and more enlightened approach to modern industry.

    We need to leverage America’s innovative strength and not always assume more regulations will be better. I can tell you from the front lines (30 years of experience in worker health protection and environmental program management) that the balance is out of whack for GHG regulations in the US.

  12. Jim, your original characterization was that the EPA rules would not promote “actual GHG reduction”. I firmly disagree with that characterization. And while more rules may mean more paperwork, I stand by my point that many companies are today not voluntarily reducing their GHG emissions. And many will not voluntarily reduce them in the future. That fact is undeniable, and it leads directly to the conclusion that we need governmental mandates to bring about the needed changes across the board. Without governmental involvement, our societal response to our urgent GHG problems will be too little, too late.

    You can legitimately complain if you think the paperwork burden is unreasonable. You can even push to modify the reporting burden, as long as the modifications do not reduce the effectiveness in collecting required information. But I maintain that governmental controls, reporting, and reduction mandates are, and will remain, neccesary tools to force the societal responses we need to achieve.

  13. Really Doug? Can you present the “facts” that support your argument. Are you going to present the hockey stick or or the IPCC reports the have numerous errors and misinformation or the fact that James Hanson is always wrong in his predictions. Oh the Rapture. How are all those scientific “models” the jokers have been using worked out. Shall I go on. I am sure you will come up with something. Many scientists are in fact are in dispute of the great claim of AGW and the main cause-CO2 emissions. Interesting that climate has repeatedly changed over the course of Earth’s history.

    Speaking as one that has been in environmental compliance and management for 25 years, the EPA has become nothing but wing of the left meant to tax the American public and industry. This all done with the legislation from the bench. Jim is correct the EPA is unbalanced.

    Further nearly all, if not all of the above funds mentioned are some form of advocacy. Clearly they stand to gain financially from their advocacy. Hook line and sinker. Have a nice day!

  14. Matt, yes, I can supply facts – unlike you, since you are only supplying hype, misinformation, etc. For now, in response to your posting:

    a) It is an outright lie to say that any one scientist is “always wrong”. What a joke of an argument. And a clear example of libel.

    b) The IPCC reports actually have very few identified errors – and the few that have been found have since been corrected. Furthermore, the identified errors didn’t influence the overall conclusions significantly anyway. But I suppose you are unaware of any of those facts.

    c) The scientific models in use have been verified in a number of independent ways, and the overall conclusions rest upon averages of several modeling results – which cancels out independent residual errors even more. But I suppose you didn’t know any of that, either.

    d) Far more scientists are in agreement with the climate change hypothesis than are in dispute of it. The ratio of supporters to skeptics is over 90%. What’s that you say – you didn’t know that either?

    e) Climate changes over the course of Earth history is irrelevant to the issue. The point is that mankind has now introduced a new climate forcing that previously did not exist. That fact is beyond debate.

    f) Choosing to categorize the EPA, or any other entity, as either left- or right- wing, is likewise irrelevant to the truth.

    g) The funds mentioned in the story are “some form of advocacy”??? What does that even mean? I assume they are invested in the companies to whom they sent their letter. As shareholders, they have the right to state their opinions, and to request that the companies listen to their suggestions. There’s nothing wrong with any of that.

    h) Thanks! I am having a good day. The same to you.

  15. Not to pile on, Matt, but I would like to point out that there is not a single scientific organization of national or international standing that disagrees with the consensus opinion that:
    1) The earth is warming
    2) Humans are very likely a significant contributing factor
    3) The outcomes of this warming will be more negative than positive for society.

    For a very long list of reputable organizations, you may look here:
    http://en.wikipedia.org/wiki/Scientific_opinion_on_climate_change

    So although I am sure you are a very intelligent person, if I had to choose between your comments here or the published opinions of literally scores of highly reputable scientific organizations from around the world, I’ll go with the scientists.

    Have a great day.

  16. Accelerated Global Warming is nearing the threshold of gravity and geometry as far as a valid scientific theory. Sure there are people that argue against those theories too, but they succeed only in marginalizing themselves from real discussions.

  17. Precautionary Principle. Isn’t there too much at risk to do nothing? And since Congress can’t decide how to act, EPA is attempting to advance the issue the best they can. And I haven’t been doing the “paperwork”, but it seems they have been fairly reasoned and deliberate – kind of easing their way along – in order to make progress without ruffling too many feathers. And yet, their is a howl of opposition!?!?! I expected/hoped Obama administration would have made this more of a priority – but health care took all their energy it seems. Maybe we should all discuss this from a national security perspective, since there should be common ground there. The efforts of DOE to advance efficiency and renewables is great – we just need more, sooner and faster.

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