*[Enwl-eng] Shareholder Resolution Raises Concerns About PotentialCarbon Bubble
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Mar 13, 2013, 5:27:57 PM3/13/13
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One source for a discussion of the idea of a carbon bubble is a report
by the Carbon Tracker Initiative, titled Unburnable Carbon: Are the
World's Financial Markets Carrying a Carbon Bubble?, which can be
accessed at:
http://www.carbontracker.org/wp-content/uploads/downloads/2012/08/Unburnable-Carbon-Full1.pdf
* * *
http://insideclimatenews.org/news/20130307/investor-shareholders-activism-as-you-sow-carbon-bubble-climate-change-global-warming-fossil-fuels-consol-alpha
*Shareholders File First-Ever 'Carbon Bubble' Resolutions*
Shareholder activists are concerned that fossil fuels could become
unburnable because of climate laws---and they want firms to divulge the
financial risks.
By Maria Gallucci, InsideClimate News
Mar 7, 2013
Illustration Omitted:
Mining operations of Consol Energy. The coal company is one of two
fossil fuel companies being targeted in carbon bubble resolutions by
shareholder activists. Credit: Consol Energy
Two advocacy groups have come up with a new tactic to show how climate
change---and laws to deal with it---could make investments in fossil
fuel companies riskier and rock financial markets.
In a pair of first-of-their-kind shareholder resolutions, the groups
have asked two of the nation's largest coal producers to report to
investors how much of their coal assets would be left "stranded" in the
ground if the United States were to pass sweeping greenhouse gas
regulations.
As You Sow, a shareholder advocacy group for environmental issues, filed
a resolution with CONSOL Energy late last year. The Unitarian
Universalist Association, a religious organization that promotes social
justice, filed a similar resolution with Alpha Natural Resources.
The groups' point is that coal and other energy companies would be
dangerously overvalued in a carbon-regulated world, thus creating a
"carbon bubble" that could one day pop.
"This carbon bubble is so big, it's going to make the housing bubble
look like chump change," Andrew Behar, CEO of As You Sow, said in an
interview. "It's another order of magnitude."
The carbon bubble concept is relatively new, born out of a recent
scientific paper that has united climate change activists and some in
the financial community in a common pursuit: to rethink the value of
investments in coal, oil and gas.
The paper, published in 2009 in Nature, said that at current rates of
fossil fuel burning, the world could face catastrophic warming in as
soon as a dozen years. The finding triggered international attention,
because the values of energy companies---which represent a significant
portion of stock traded in financial markets---are pegged to future
earnings from selling fuels that may have to stay underground.
According to a recent report by banking giant HSBC, major firms like BP,
Shell and Statoil could lose up to 60 percent of their market values if
countries get tough on carbon.
Shareholder activists often use shareholder votes to challenge fossil
fuel companies on climate change issues, but this is the first time
social investment groups filed carbon bubble resolutions.
They represent a "new and powerful way" of pressuring firms to act on
global warming, said Dan Bakal, director of electric power programs at
Ceres, a coalition of sustainability focused investors with $11 trillion
in assets. "I think it's likely that more investors will get involved in
this kind of activity."
But Bakal said that using the image of a carbon bubble is a bit
misleading. The devaluing of fossil fuel stocks "would probably happen
in a fairly incremental way. It wouldn't be like a bubble bursting."
Both As You Sow and the Unitarian Universalist Association are part of
Ceres' Investor Network on Climate Risk, a group of investors and
environmental and public interest organizations.
Nick Robins, who heads the Climate Change Center of Excellence at HSBC
in London and was co-author of the bank's carbon report, said the
shareholder resolutions are part of a larger awakening to the concept of
stranded assets.
"Investors are being more demanding on company management to show that
their capital expenditures ... can pay off in a low-carbon world,"
Robins said.
Both of the social investor groups said they expect to file more
carbon-bubble resolutions in the years to come. But Robins cautioned
these are still "very early days" in the movement to quantify the risk
of stranded fossil fuel assets.
"It's the beginning of a much longer and more profound discussion," he said.
The National Mining Association and American Coal Council did not
respond to questions about concerns of stranded assets.
The coal company resolutions were announced Thursday in a report by As
You Sow and other sustainable investment groups that said in total, 92
resolutions relating to climate and environmental issues were filed in
the 2013 proxy season---the time of year when all shareholders get to
vote on company issues. It's about the same number of resolutions filed
last year.
'A Lot of Information Is Coming Together'
Danielle Fugere, president and chief counsel at As You Sow, said they
got the idea for carbon bubble resolutions after reading reports from
financial analysts and institutions---which were inspired by the Nature
paper---showing that up to 80 percent of fossil fuel reserves would have
to remain untouched to prevent uncontrollable warming.
"A lot of information out there is coming together. So we acted," said
Fugere.
Fugere said her group has long filed resolutions on behalf of
individuals who hold stock in coal companies, including CONSOL Energy,
which is based near Pittsburgh and accounted for about 6 percent of the
nation's coal production last year.
Behar, As You Sow's CEO, said it targeted CONSOL on the carbon bubble in
large part because the coal company is investing heavily to expand its
reserves and production of lower-carbon natural gas.
CONSOL is "actually forward thinking, as much as a coal company can be
... and we saw that maybe the management there would be more open to
having this conversation," he said.
The resolution says investors are concerned that "a portion of CONSOL's
coal and gas reserves ... may become unusable, unmarketable, or
otherwise not economically viable as a result of greenhouse gas
restrictions." It calls on CONSOL to disclose its "action plans and risk
scenarios" to investors in the event of such regulations.
Lynn Seay, a spokesperson for CONSOL Energy, said only that the firm
will be addressing shareholders concerns in a proxy statement, which
will be filed in the next couple of weeks.
The Unitarian Universalist Association (UUA) filed a similar resolution
with Alpha Natural Resources, a large coal company in Bristol, Va., that
produced over 10 percent of the nation's coal last year.
Tim Brennan, UUA's treasurer and chief financial officer, explained that
the group has worked with Alpha Natural Resources in previous
shareholder discussions to push the firm to file its first
sustainability report, which it did in mid-2012. But Brennan said the
report's section on climate change didn't focus enough on risks to the
company's assets under aggressive climate laws.
"We think it's important for shareholders to understand more about
[those risks], so we can understand the long-term value of the company,"
he said.
Ted Pile, a spokesperson for Alpha Natural Resources, said that the
company would also address the resolution, "including detailed
information in support or opposition," in its proxy statement in early
April.
Concerns about a carbon bubble are also fueling a related campaign: the
fast-spreading divestment movement coordinated by 350.org, a climate
advocacy organization founded by author and activist Bill McKibben.
Students at more than 250 universities in North America have asked their
schools to sell off their endowments' holdings in fossil fuel companies
on moral grounds, and a few have agreed.
Several faith-based organizations are also considering divestment, as
are some local governments, including the City of Seattle.
Fugere of As You Sow has championed the divestment movement from the
start. Several years ago her organization and others began calling on
colleges to divest from coal companies in particular. "It's just one
more factor in pressuring our government to take action on climate
change," she said.
Still, not everyone in the community of socially responsible investors
agrees that divestment is an effective strategy.
Brennan said he feels that "to divest takes you out of the conversation
and away from the table. I think we're better off owning the shares and
being engaged with the companies." The UUA's investment committee has
not made a formal official statement on divestment, he noted.
Fugere said she believes it's possible to do both. "I don't think it's
contradictory to hold a few shares" and also call for divestment.
*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this
material is distributed, without profit, for research and educational
purposes only. ***
From: "Yahoo Newsgroups" <vasi...@ramapo.edu>
Sent: Tuesday, March 12, 2013 1:11 PM
Subject: News: Shareholder Resolution Raises Concerns About Potential Carbon
Bubble
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-------------------------------------
ONLY if your address is subscribed:
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by the Carbon Tracker Initiative, titled Unburnable Carbon: Are the
World's Financial Markets Carrying a Carbon Bubble?, which can be
accessed at:
http://www.carbontracker.org/wp-content/uploads/downloads/2012/08/Unburnable-Carbon-Full1.pdf
* * *
http://insideclimatenews.org/news/20130307/investor-shareholders-activism-as-you-sow-carbon-bubble-climate-change-global-warming-fossil-fuels-consol-alpha
*Shareholders File First-Ever 'Carbon Bubble' Resolutions*
Shareholder activists are concerned that fossil fuels could become
unburnable because of climate laws---and they want firms to divulge the
financial risks.
By Maria Gallucci, InsideClimate News
Mar 7, 2013
Illustration Omitted:
Mining operations of Consol Energy. The coal company is one of two
fossil fuel companies being targeted in carbon bubble resolutions by
shareholder activists. Credit: Consol Energy
Two advocacy groups have come up with a new tactic to show how climate
change---and laws to deal with it---could make investments in fossil
fuel companies riskier and rock financial markets.
In a pair of first-of-their-kind shareholder resolutions, the groups
have asked two of the nation's largest coal producers to report to
investors how much of their coal assets would be left "stranded" in the
ground if the United States were to pass sweeping greenhouse gas
regulations.
As You Sow, a shareholder advocacy group for environmental issues, filed
a resolution with CONSOL Energy late last year. The Unitarian
Universalist Association, a religious organization that promotes social
justice, filed a similar resolution with Alpha Natural Resources.
The groups' point is that coal and other energy companies would be
dangerously overvalued in a carbon-regulated world, thus creating a
"carbon bubble" that could one day pop.
"This carbon bubble is so big, it's going to make the housing bubble
look like chump change," Andrew Behar, CEO of As You Sow, said in an
interview. "It's another order of magnitude."
The carbon bubble concept is relatively new, born out of a recent
scientific paper that has united climate change activists and some in
the financial community in a common pursuit: to rethink the value of
investments in coal, oil and gas.
The paper, published in 2009 in Nature, said that at current rates of
fossil fuel burning, the world could face catastrophic warming in as
soon as a dozen years. The finding triggered international attention,
because the values of energy companies---which represent a significant
portion of stock traded in financial markets---are pegged to future
earnings from selling fuels that may have to stay underground.
According to a recent report by banking giant HSBC, major firms like BP,
Shell and Statoil could lose up to 60 percent of their market values if
countries get tough on carbon.
Shareholder activists often use shareholder votes to challenge fossil
fuel companies on climate change issues, but this is the first time
social investment groups filed carbon bubble resolutions.
They represent a "new and powerful way" of pressuring firms to act on
global warming, said Dan Bakal, director of electric power programs at
Ceres, a coalition of sustainability focused investors with $11 trillion
in assets. "I think it's likely that more investors will get involved in
this kind of activity."
But Bakal said that using the image of a carbon bubble is a bit
misleading. The devaluing of fossil fuel stocks "would probably happen
in a fairly incremental way. It wouldn't be like a bubble bursting."
Both As You Sow and the Unitarian Universalist Association are part of
Ceres' Investor Network on Climate Risk, a group of investors and
environmental and public interest organizations.
Nick Robins, who heads the Climate Change Center of Excellence at HSBC
in London and was co-author of the bank's carbon report, said the
shareholder resolutions are part of a larger awakening to the concept of
stranded assets.
"Investors are being more demanding on company management to show that
their capital expenditures ... can pay off in a low-carbon world,"
Robins said.
Both of the social investor groups said they expect to file more
carbon-bubble resolutions in the years to come. But Robins cautioned
these are still "very early days" in the movement to quantify the risk
of stranded fossil fuel assets.
"It's the beginning of a much longer and more profound discussion," he said.
The National Mining Association and American Coal Council did not
respond to questions about concerns of stranded assets.
The coal company resolutions were announced Thursday in a report by As
You Sow and other sustainable investment groups that said in total, 92
resolutions relating to climate and environmental issues were filed in
the 2013 proxy season---the time of year when all shareholders get to
vote on company issues. It's about the same number of resolutions filed
last year.
'A Lot of Information Is Coming Together'
Danielle Fugere, president and chief counsel at As You Sow, said they
got the idea for carbon bubble resolutions after reading reports from
financial analysts and institutions---which were inspired by the Nature
paper---showing that up to 80 percent of fossil fuel reserves would have
to remain untouched to prevent uncontrollable warming.
"A lot of information out there is coming together. So we acted," said
Fugere.
Fugere said her group has long filed resolutions on behalf of
individuals who hold stock in coal companies, including CONSOL Energy,
which is based near Pittsburgh and accounted for about 6 percent of the
nation's coal production last year.
Behar, As You Sow's CEO, said it targeted CONSOL on the carbon bubble in
large part because the coal company is investing heavily to expand its
reserves and production of lower-carbon natural gas.
CONSOL is "actually forward thinking, as much as a coal company can be
... and we saw that maybe the management there would be more open to
having this conversation," he said.
The resolution says investors are concerned that "a portion of CONSOL's
coal and gas reserves ... may become unusable, unmarketable, or
otherwise not economically viable as a result of greenhouse gas
restrictions." It calls on CONSOL to disclose its "action plans and risk
scenarios" to investors in the event of such regulations.
Lynn Seay, a spokesperson for CONSOL Energy, said only that the firm
will be addressing shareholders concerns in a proxy statement, which
will be filed in the next couple of weeks.
The Unitarian Universalist Association (UUA) filed a similar resolution
with Alpha Natural Resources, a large coal company in Bristol, Va., that
produced over 10 percent of the nation's coal last year.
Tim Brennan, UUA's treasurer and chief financial officer, explained that
the group has worked with Alpha Natural Resources in previous
shareholder discussions to push the firm to file its first
sustainability report, which it did in mid-2012. But Brennan said the
report's section on climate change didn't focus enough on risks to the
company's assets under aggressive climate laws.
"We think it's important for shareholders to understand more about
[those risks], so we can understand the long-term value of the company,"
he said.
Ted Pile, a spokesperson for Alpha Natural Resources, said that the
company would also address the resolution, "including detailed
information in support or opposition," in its proxy statement in early
April.
Concerns about a carbon bubble are also fueling a related campaign: the
fast-spreading divestment movement coordinated by 350.org, a climate
advocacy organization founded by author and activist Bill McKibben.
Students at more than 250 universities in North America have asked their
schools to sell off their endowments' holdings in fossil fuel companies
on moral grounds, and a few have agreed.
Several faith-based organizations are also considering divestment, as
are some local governments, including the City of Seattle.
Fugere of As You Sow has championed the divestment movement from the
start. Several years ago her organization and others began calling on
colleges to divest from coal companies in particular. "It's just one
more factor in pressuring our government to take action on climate
change," she said.
Still, not everyone in the community of socially responsible investors
agrees that divestment is an effective strategy.
Brennan said he feels that "to divest takes you out of the conversation
and away from the table. I think we're better off owning the shares and
being engaged with the companies." The UUA's investment committee has
not made a formal official statement on divestment, he noted.
Fugere said she believes it's possible to do both. "I don't think it's
contradictory to hold a few shares" and also call for divestment.
*** NOTICE: In accordance with Title 17 U.S.C. Section 107, this
material is distributed, without profit, for research and educational
purposes only. ***
From: "Yahoo Newsgroups" <vasi...@ramapo.edu>
Sent: Tuesday, March 12, 2013 1:11 PM
Subject: News: Shareholder Resolution Raises Concerns About Potential Carbon
Bubble
------------- * ENWL * ------------
Ecological North West Line * St. Petersburg, Russia
Independent Environmental Net Service: http://www.bellona.ru/enwl/
Russian: ENWL(discussions), ENWL-inf(FSU information), ENWL-misc(any topics)
English: ENWL-eng (world information)
en...@lew.spb.org, enwl...@lew.spb.org, en...@lew.spb.org, en...@lew.spb.org
Subscription, Moderator: vf...@lew.spb.org or en...@enw.net.ru
Archive: http://enwl.bellona.ru/pipermail/
and http://groups.google.com/group/enwl/
SEE ALSO: http://www.bellona.org (English)and http://www.bellona.ru
(Russian)
RSS: http://groups.google.ru/group/enwl/feeds?hl=ru
(C) Please refer to exclusive articles of ENWL
-------------------------------------
ONLY if your address is subscribed:
Enwl-eng mailing list
Enwl...@enwl.bellona.ru
http://enwl.bellona.ru/cgi-bin/mailman/listinfo/enwl-eng
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