They are hidden amongst the mail, often getting tossed aside for the Economist, Business Week or the new IKEA catalog. “Proxy Information Enclosed” often lays printed across the front as a faint reminder to the stock purchase that was made days to months ago. These often-ignored ballots of corporate policy could offer a new alternative to government intervention for spreading sustainability through the upper echelon of our corporate landscape.
For those like me, proxy statements often get a quick look at best. A glance almost always reveals that I have never heard of any of those running for board positions, nor know enough to vote for or against any of the resolutions. However, a new trend is forming that has investors of public companies using proxy resolutions to drive upper management towards sustainability planning. While this has been slowly happening over the course of the past few years, the change in the game is that it is starting to work.
A blog post by Marc Gunther points to a proxy vote for utility company IdaCorp, based in Boise, Idaho, where investors drew together a 51.2% majority in favor of the company adopting greenhouse gas emission targets—despite the resistance from the company’s management. The win could mark a new trend of American equity owners forcing sustainability up through individual companies.
Of the conservatives that I often pair words with, one of the greatest oppositions to the green lobby is not that they disagree with the need to address climate change, but that they dislike the method of using government intervention to “restrict choices” of citizens to only those considered to be more sustainable. Right-wingers would rather see a free market option that facilitates the opportunity to change lifestyle rather than mandating it. Gathering support for green-goal investing could create a new way to incite change within the framework of capitalism that our country has come to rely on so heavily.
Some could argue that individual investors would be muscled around by larger institutional investing groups, keeping them from achieving results—especially on larger companies that are responsible for more considerable portions of waste production, pollution and energy use. But IdaCorp’s example shows that individuals are joined by non-profits and new funds, adding strength to proxy movements.
Groups like Ceres help coordinate efforts to promote change within company policy. Ceres states its mission as “Integrating sustainability into capital markets for the health of the planet and its people” and operates as a network of environmental organizations, public interest groups and an investor network that collectively manage over $7 billion in assets. That is a number that can be a substantial presence in a larger range of companies. According to Ceres:
A record 68 climate-related shareholder resolutions were filed by investors this year, of which 31 were withdrawn after the companies agreed to positive climate-related commitments.
For conservatives, this should be a win-win. On one hand, it promotes Americans to reinvest their money back into our own businesses, helping to bolster an economy that is in dire need of it. It also acts on a case-by-case basis as the result of nothing more than investors exercising their rights as owners of a company—potentially downplaying the amount of effort needed from Capitol Hill. If the support for green efforts is as strong as polls like Zogby International’s recent inquiry is saying, then private investing dollars could help battle inefficiency and accountability from the private sector side.
Strength in the movement could not have happened at a better time. With many people believing that the worst of the recession is behind us, long term trends in the market are likely bullish, prompting more people to stay invested in companies that have a better chance of turning a profit. Conversely, if this kind of success had happened three years ago, the effort could have faced a devastating setback by numerous investors working to change companies only to see their assets cut in half.