Tuesday, June 9, 2009

Mutual Funds and Climate Change: Growing Support for Shareholder Resolutions

Climate change related shareholder resolutions that involve U.S.-based companies were supported in 2008 at an all time high of 24 percent by mutual fund companies.

Put another way, "mainstream U.S. mutual fund" firms supported climate change resolutions nearly 24 percent of the time, a large increase over the 14.7 percent level at which they supported similar resolutions in 2007.

A recent Ceres' report said:
"The increased support mirrors rising overall investor support for climate change resolutions in recent years.  It comes as the business case for supporting climate-related resolutions is increasingly clear, as regulation of greenhouse gas emissions is now a reality in many regions of the U.S. and federal regulations are a strong possibility.

"When fund companies vote against climate resolutions it raises serious questions about whether they are violating their fiduciary duty by not representing their customers' long-term financial interests.  That's because climate change can pose major financial risks to the companies the funds invest in."
Among the leading mutual fund firms voting in favor of climate change resolutions were:
  • Charles Schwab
  • Credit Suisse
Just one more issue that company management teams and boards of directors need to be considering in their business plans...

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