PPL shareholders pass resolution for climate strategy assessment
- A majority of shareholders in Pennsylvania utility PPL Corp. last week urged company management to publish a report on how climate change policies and technological innovations will affect the company's bottom line, according to Allentown The Morning Call.
- Some 57% of shareholders voted in favor of the non-binding proposal at the PPL shareholder meeting last week in Kentucky. The vote, reportedly a first for the power sector, followed a similar decision by shareholders of Occidental Petroleum, which was supported by about 66% of shareholders.
- Investor focus on climate change policy has been growing in recent years. The shareholder resolutions call for an examination of goals related to the United Nations Paris accord, which seeks to limit global warming to 2 degrees Celsius.
It's still not clear if the United States will maintain its seat at the global climate policy table, but investors are keenly interested in how environmental strategies will impact a company's bottom line.
Last week, PPL investors urged the company to develop a report examining the "risks and opportunities" associated with climate policy, and Reuters notes that Exxon Mobil investors will consider a similar proposal at the company's annual meeting next week.
PPL shareholders want to know how policies related to the U.N. climate accord could impact their bottom line. Noting that coal is about 60% of PPL's power mix, the proposal expresses concern the utility "is not properly accounting for the risk of its current high reliance on carbon-intensive generation," according to the Morning Call.
PPL's shareholder vote the first time an electric utility has made such a decision, the paper reports. The votes also reflect a growing interest in corporate governance centered on sustainability.
The 2015 Paris agreement calls for keeping the impact of climate change below 2 degrees Celsius. For the United States, that would mean a roughly 80% economywide reduction in greenhouse gas emissions from 2005 levels. While on the campaign trail, Trump vowed to exit the deal, but it remains to be seen whether the administration will follow through.
Some world leaders expect a decision on Paris to come this week at the G7 summit in Italy. The Washington Post reported yesterday that European leaders are warning of "lasting damage" to international relations, should the U.S. abandon the agreement.
In a letter to EPA Administrator Scott Pruitt, German's minister of the environment said warned of possible fallout.
“I am very concerned that a U.S. withdrawal from the Paris Agreement would cause lasting damage to the long-standing mutual trust and close cooperation between our two countries and between the U.S. and other countries in Europe and elsewhere,” German Minister Barbara Hendricks wrote in the letter.
PPL Chairman, President and CEO William Spence said at the company's annual meeting that the utility holding company is "investing $16 billion in infrastructure through 2021 to build a smarter, more secure energy grid and to advance a cleaner energy future."
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