Sustainable shareholders exert pressure on corporations

The extent to which shareholders can pressurise firms into improving their sustainability policies was underlined once again this week as two of the biggest names in corporate America, Chevron and Home Depot, faced shareholder resolutions demanding that they improve their environmental performance.

At a heated annual meeting in California yesterday, oil giant Chevron defeated several shareholder resolutions relating to its environmental and human rights performance. But a resolution demanding that the company release more information on its climate change strategy was only withdrawn after senior management gave assurances that further details about its emission-reduction policies would be released.

Patricia Daly at Sisters of St Dominic of Caldwell, New Jersey, a faith-based institutional investor that supported the climate change resolution, said it had only withdrawn the proposal following a successful meeting with Chevron executives.

"There was enough in the works so that we, in good faith, had to withdraw our resolution," she told the Associated Press. "In the end, this is really good, good business for the company."

A separate proposal calling for Chevron to formally report on environmental laws in all the countries in which it operates was less successful, garnering just seven per cent of votes. However, a key resolution regarding the company's human rights policies received more than a quarter of votes – a significant increase on similar resolutions tabled in previous years.

But while agreeing to step up its climate change efforts, the company also hit back at some of its environmental critics, with chief executive David O'Reilly arguing that one highly critical report was "insulting to our employees and I think it deserves the trash can".

The company also sought to downplay protests outside the meeting over its activities in Ecuador, where it is facing legal action over claims its subsidiary Texaco was guilty of dumping waste that polluted large areas of rainforest and contributed to serious health problems in local communities.

Chevron maintains that Texaco, which it bought in 2001, has already been cleared of liability and has paid towards clean-up operations in the area.

The news comes as retail giant Home Depot today prepares to face a shareholder vote on its energy plans, accusing the company of lagging behind rivals such as Lowes and Wal-Mart in its adoption of energy-efficiency measures.

The resolution has been filed by the $20 billion Connecticut Retirement Plans and Trust Funds and is supported by other members of the Ceres group of ethical investors.

It calls on the company to put in place formal measures to assess energy use across its operations, establish energy use targets and publicly report on progress against those targets to shareholders.

Connecticut state treasurer Denise L Nappier said the resolution was necessary after the company repeatedly refused to disclose details on its energy-efficiency plans, even after agreeing to do so in 2006.

"Throughout the country – and the world – there is growing recognition of the need to use energy more efficiently," she said. "Home Depot remains unwilling to provide the information and transparency that we have requested – and without a plan, progress cannot be measured. It's time for Home Depot to step up to the plate."

Mindy Lubber, president of Ceres, said that with growing numbers of retailers investing in energy efficiency, Home Depot was putting itself at a "competitive and operational disadvantage” by failing to put in place formal plans to cut energy use.

According to Ceres, the resolutions filed with Chevron and Home Depot are part of a growing trend that has seen a record 67 global warming-related resolutions filed with 58 US and two Canadian companies during this proxy season.