Religious and other institutional investors joined today with Ford Motor Co. in announcing that Ford is the first U.S. auto company to spell out how it plans to reach the goal of reducing by at least 30 percent the greenhouse gas (GHG) emissions from its new vehicle fleet by 2020. The decision by Ford to publish its emission target came in the wake of climate-related shareholder resolutions put forward by members of the Interfaith Center on Corporate Responsibility (ICCR) and the Investor Network on Climate Risk Network (INCR) organized by Ceres.
As a result, related Ford shareholder resolutions have been withdrawn by: the Sisters of St. Dominic of Caldwell, NJ and other members of ICCR, which is a group of nearly 300 religious institutional investors representing over $100 billion in invested funds; and the Connecticut State Treasurer's office, which is active in INCR, a $5 trillion network of investors that promotes better understanding of the financial risks and opportunities posed by climate change. Connecticut holds 565,246 shares of Ford with market value $3,668,446.54 (as of April 7, 2008).
In March, Ford presented concerned investors with a detailed analysis of its fuel emissions goals showing how the 30 percent emissions reduction would be achieved in a manner consistent with the 60-80 percent CO2 reductions by 2050 that Ford and dozens of other U.S. companies have agreed to as part of the U.S. Climate Action Partnership. Previously, the most any U.S. auto company has agreed to do on GHG emissions is to undertake enhanced reporting of climate-related impacts or set a general GHG goal without showing how it would be reached.
Beyond Ford, religious investors are urging General Motors to set specific greenhouse gas reduction targets for its vehicles and operations. A shareholder resolution also filed by The Dominicans of Caldwell is expected to be voted on at GM's annual meeting in June 2008.
Sister Patricia A. Daly, OP, executive director, Tri-State Coalition for Responsible Investment, and representative for the Sisters of St. Dominic of Caldwell, NJ, the lead resolution filer, said: "Ford breaks new ground here as the first corporation to respond to shareowners by agreeing to pursue a specific and clearly defined target for climate-related emissions in their new products. The target is not even the win here; Ford has wrestled with various analyses to arrive at reduction goals. No other company has entered into this discipline. This goes far beyond acknowledging global warming or disclosing emissions. Even as a leader in the 'carbon club' Ford opens the door for other companies and industries to target reductions."
"Ford has spent more than three years studying a range of potential actions we would need to take to achieve these reductions in CO2 emissions," said Sue Cischke, group vice president, Sustainability, Environment and Safety Engineering, Ford Motor Company. "We shared our findings with these institutional investors to help them understand our commitments and strategy. We recognize much work remains to be done and we look forward to continued collaboration in addressing the challenges of climate change."
Connecticut State Treasurer Denise L. Nappier said: "Climate change is a long-term, mounting problem, and for any company to maintain its future shareholder value, it must go from being silent on this issue to moving in the right direction by mitigating the potential financial harm posed by climate change. For this reason, Ford's welcomed response to our climate change resolution is a defining moment in the automotive industry, and I hope it will challenge industry procrastinators. Others may say they're focused on future business growth and success, but they need to step up to the plate and likewise take responsive action. By publicly acknowledging that climate change will affect the auto industry and by committing to taking measurable action to increase fuel economy and reduce CO2 emissions over a specified time, Ford is making news. I encourage other auto companies to follow Ford's lead and help shape a sustainable environment conducive for business growth and success."
Laura Berry, executive director, Interfaith Center on Corporate Responsibility said: "ICCR's model of long-term and persistent engagement by institutional investors who are concerned about all aspects of corporate performance - environmental, social, ethical and financial - is beginning to transform how corporations solve problems and navigate difficult new challenges. Ford's leadership in this area has emerged as a new corporate governance standard on climate."
Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk said: "Ford is taking a critical first step to align its products with the climate change challenge before us. But, let's not fool ourselves, this step is only a beginning. Ford, as well as General Motors, need to do much more, and quickly, to reclaim their leadership role in the global marketplace."
The withdrawals come one month after investors announced that a record 54 global warming shareholder resolutions have been filed with U.S. companies as part of the 2008 proxy season, which is nearly double the number filed two years ago. Companies targeted with resolutions include electric power companies, oil and coal producers, airlines and other businesses that investors believe are not adequately dealing with potential climate-related business impacts, whether from physical changes, emerging climate regulations or growing global demand for low-carbon technologies and services.
This year's filings come on the heels of a record high number of resolutions and record high voting support for global warming resolutions in the 2007 proxy season. Investors filed 43 resolutions with U.S. companies last year and average voting support was 21.6 percent. The shareholder filings are coordinated by the Interfaith Center on Corporate Responsibility and the Ceres investor coalition.
Personal vehicle use accounts for nearly 20 percent of CO2 emissions domestically and represents the second-largest source of greenhouse gas emissions in the U.S. From 1990 to 2006, transportation-related GHG emissions rose by 28 percent due in part to increased travel and a vehicle sales mix that included a significant percentage of larger vehicles.