Green investors to step up pressure on U.S. utilities after court ruling (updated)
01/07/2022 21:04
(Adds comment from Southern Co, additional comment from Duke
Energy.)
By Ross Kerber
BOSTON, July 1 (Reuters) - Activist investment leaders who
have urged U.S. companies to cut carbon emissions said on Friday
they expect more such efforts following a milestone U.S. Supreme
Court ruling on Thursday that diminished the power of federal
environmental regulators.
By constraining the U.S. Environmental Protection Agency's
authority to regulate greenhouse gas emissions from coal- and
gas-fired power plants, the court put responsibility on
investors looking to slow climate change, said Andrew Behar,
chief executive of the nonprofit group As You Sow, a which often
files shareholder resolutions.
Investors will likely launch more engagements with companies
ahead of the 2023 annual meeting season, Behar said, adding that
executives lately have been more receptive to suggested changes.
"All the models say climate change will be bad for
business," Behar said in an interview. The court's ruling, he
said, means that "corporations have even more responsibility to
their stakeholders" to limit emissions.
Climate issues have gained new attention from top asset
managers and executives as investors pour new cash into funds
that use environmental, social and governance (ESG) metrics to
pick stocks. L1N2Y31MK
For instance among top U.S. utilities this year, Duke Energy
DUK.N vowed to cut more emissions and Southern Co SO.N
agreed to disclose more emissions details as part of deals with
investors, As You Sow said.
Via e-mail a Duke representative said "we and many of our
stakeholders share the view that we can take a leadership role
in tackling greenhouse gas emissions associated with our
business."
Duke had previously said the Supreme Court ruling will not
immediately impact its coal plant retirement dates including a
full exit from coal by 2035.
A Southern representative said the company "has a long-term
constructive relationship with As You Sow and many other
investors and environmental stakeholders and appreciates that
stakeholders are interested in understanding the company’s path
to net zero."
The company is still reviewing the Supreme Court decision,
the representative said.
Mindy Lubber, president of Ceres, a Boston climate advocacy
group that works with asset managers and others, said having
invested heavily in clean power technologies like solar panels
and battery storage, utilities won't likely change course
whatever regulations are limited by the court's decision.
"Everything is not going to stop and go backwards just
because of the Supreme Court ruling," Lubber said. Rather,
utilities could face tougher requests from shareholders next
year such as calls for more specific emission cut schedules or
reviews of their lobbying activities, she said.
Thursday's ruling reduced the power of officials to use the
landmark Clean Air Act anti-pollution law. It is likely to have
implications beyond the EPA as it raises new legal questions
about any big decisions made by federal agencies. L1N2YH1IN
For instance the ruling could also spell trouble for an
effort by a U.S. Securities and Exchange Commission to force
companies to disclose their emissions, legal experts
said. L1N2YI1DM
Investors have looked to standardized disclosures as a way
to pressure heavy emitters.
(Reporting by Ross Kerber; Editing by David Gregorio)
((ross.kerber@thomsonreuters.com; (617) 856 4341; Reuters
Messaging: Ross.Kerber.Reuters.com@Reuters.net))