~e; shareholder resolution vs. global warming

From human being <human@electronetwork.org>
Date Fri, 13 Dec 2002 23:24:53 -0600

// some interesting news, shareholder democracy to lobby
// companies to address global warming through business
// policies, which could result in the transformation of
// industrial organizations into wholly different companies.
// in this way, when government regulation is non-existent
// to a degree to enact changes, when businesses themselves
// have internal contradictions, and even workers unions,
// where people on the floor and on the line have one view
// and managers and bosses have another... yet when it comes
// down to consumer pocketbooks, maybe movements towards a
// more sustainable system will begin making good business
// sense, taking risks, and reaping the rewards of innovating...
// (this has to do with EM for several reasons, a few being
// that of changing economies, new types of cars such as
// electric/hybrid/fuel-cells, and also the spread of info
// via the media when it reflects upon itself, globally back
// to the local, and may increase the power of people to help
// determine the course of things, through new media relations...)

GM and Ford Shareholders File Climate Resolutions

By J.R. Pegg


WASHINGTON, DC, December 12, 2002 (ENS) - Shareholders of Ford and 
General Motors (GM) have filed resolutions to pressure both automakers 
into more aggressive action on reducing greenhouse gas emissions from 
their plants and vehicles.

The resolutions, filed by religious groups that belong to the 
Interfaith Center on Corporate Responsibilities (ICCR), indicate that 
the relative inaction by both Ford and GM on climate change is not only 
an environmental concern, it is also a risk to the financial health of 
the companies.

"This isn't just about what is bad for the environment, it is also 
about what is bad for investors of General Motors and Ford," said 
Sister Patricia Daly, executive director of the Tri-State Coalition for 
Responsible Investment, which represents some 30 religious orders and 
Diocesen members from the states of Connecticut, New Jersey and New 

"The high greenhouse gas intensity of U.S. vehicle manufacturers 
undermines the competitive positioning of U.S. automakers both here and 
abroad, as the world, including their competitors, move forward to 
address climate change," said Daly, speaking on behalf of her 
organization as well as the ICCR.

The resolutions call for both automakers to measure and report to their 
shareholders on carbon dioxide emissions from their plants and products 
by August 2003 and to commit to significantly reducing those emissions 
by 2012, with further reductions by 2020.

They also call for an evaluation of what new public policies would 
enable and assist the company in achieving those emission reductions.

Cars and trucks are a major source of carbon dioxide, a primary 
greenhouse gas that has been linked to global warming. U.S. cars and 
trucks are responsible for some 20 percent of the country's carbon 
dioxide emissions, accounting for more carbon dioxide emissions than 
all but three countries in the world.

According to Daly, these resolutions were triggered by the continued 
efforts of GM and Ford to undermine efforts to increase fuel economy 
standards at both the state and federal level.

GM and Ford also had the highest carbon emissions of the top six U.S. 
automakers in 2000, Daly said, and GM's "carbon burden" grew 13 percent 
between 1990 and 2000, with Ford's increasing 26 percent over the same 

These are the first global warming resolutions filed by GM or Ford 
shareholders since 1999. Those earlier resolutions, which were filed by 
many of the same groups, were withdrawn as a sign of support for the 
automakers' withdrawal from the Global Climate Coalition (GCC), a now 
defunct industry group that challenged evidence of global warming and 
lobbied against climate change initiatives.

Recent lobbying against a Senate bill aimed at increasing fuel economy 
standards as well as opposition to a California law requiring 
automakers to cut emissions and sell zero emission vehicles finally 
drained the remaining positive capital either company had earned from 
leaving the GCC, Daly said.

The resolutions cite the failure of GM or Ford to "to propose 
alternative plans to achieve comparable environmental results."

Ford and GM, for their part, claim their fuel economy is increasing and 
that they are already doing much of what these resolutions ask of them. 
Ford points to its public commitment to improve the fuel economy of its 
sport utility vehicle (SUV) fleet by 25 percent by 2005 as well as to 
cut carbon dioxide emissions of its European fleet and manufacturing 
plants by 25 percent by 2008. The company said a record of its 
greenhouse gas emissions is publicly available.

GM officials say their company's greenhouse gas emission figures are 
available in its annual sustainability report as well as on its website.

Both automakers are pursuing hybrid vehicles, with Ford aiming to 
release a hybrid SUV next year that the company predicts will get 35-40 
mpg in the city and 27-29 mpg on the highway. By comparison the 2003 
Ford Explorer XLS gets 17 mpg in the city and 21 mpg on the highway.

The shareholders who filed the resolutions and their supporters believe 
both firms could be doing much more. Japanese automakers, notably Honda 
and Toyota, have seized the lead in hybrid vehicles and fuel 
efficiency, and have also recently debuted hydrogen powered fuel cell 
vehicles. A recent report ranking the environmental performance of 
automakers by the Union of Concerned Scientists found Ford and GM 
trailing Honda, Toyota and Nissan.

"Ford and GM should be shedding environmental liabilities instead of 
being stuck in the mud in yesterday's economy, while the Japanese 
competition steps boldly ahead to capture the emerging market for 
greener vehicles," says Kevin Knoblach, executive director of the Union 
of Concerned Scientists.

"These companies are not at a technological disadvantage compared to 
Honda or Toyota," he said. "Rather, these companies have been less 
aggressive and more risk averse at putting the technologies on the 

Companies with highly rated environmental records perform better 
financially, Daly said, and the filers of these resolutions do not want 
to see Ford and GM fall further behind Japanese automakers who have 
more readily reacted to concerns over global warming.

According to the shareholder resolutions, available and emerging 
improvements to conventional technologies could allow automakers to 
build a fleet of vehicles that average some 40 miles per gallon (mpg) 
by 2012. Hybrid gasoline-electric vehicles could boost that average to 
at least 55 mpg by 2020, the shareholders add, and these "fuel economy 
gains can be achieved without sacrificing safety, comfort or utility 
for consumers."

The current U.S. fuel economy standard, known as the Corporate Average 
Fuel Economy (CAFE) standard, for cars is 27 mpg and has not been 
changed since 1985. The standard of 20.7 mpg for light trucks was 
established in 1996. Critics of raising either standard say smaller, 
more fuel efficient vehicles are less safe, and mandating higher fuel 
economy would limit consumer choice.

Officials from the Department of Transportation have drafted a proposal 
to for a 1.5 mpg increase in the CAFE standard for light trucks, which 
will be phased in over three years. Environmentalists have labeled this 
change "miniscule."

The request that Ford and GM increase fuel efficiency and reduce 
greenhouse gas emissions has national security implications, Knobloch 

U.S. cars and trucks consume some 11 percent of the world's total oil 
production and account for 40 percent of U.S. annual consumption.

The United States consumes some 20 million gallons of oil a day, a 
figure expected to grow to 27 million by 2020, and more than half of 
the oil consumed in the United States is imported.

Less pollution from vehicles could also have a noticeable impact on 
public health, Knobloch added. Nearly 100 million Americans live in 
areas with levels of smog, particulate matter, sulfur dioxide and other 
pollutants deemed unhealthy by the U.S. Environmental Protection Agency.

Neither Ford nor GM would comment directly on the resolutions, which 
will be voted on at the companies' annual meetings in spring 2003. How 
pressured the automakers feel by these resolutions, filed by groups 
that hold only a fraction of their stock, remains to be seen.

Shareholder resolutions on global warming are on the rise and are 
gaining more support, according to Doug Cogan, deputy director of the 
Social Issues Service of the Investor Responsibility Center (IRRC), an 
independent research firm that tracks proxy voting activity.

There were 19 global warming resolutions filed in 2002, with support 
levels averaging 18.8 percent, Cogan said. The resolutions filed with 
GM and Ford in 1998 and 1999 averaged less than five percent support, 
but Cogan predicts the current resolutions are likely to find 
"double-digit support."

"The emerging trend is that institutions are coming to see global 
warming as an issue that could have a material impact on the companies 
they own," Cogan said. "They increasingly feel they have a fiduciary 
responsibility to support more disclosure from management on this 

A copy of the shareholders' resolution can be found by clicking here.

Copyright Environment News Service (ENS) 2002. All Rights Reserved.

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