We have been writing for some time about the deceptive Prop 23 campaign that is utilizing tons of out-of-state money to try and roll back California’s landmark law regarding Climate Change, AB 32. Now the Los Angeles Times is reporting that shareholders at these corporations are filing shareholder resolutions challenging the contributions. While the resolutions are being advanced by small shareholders - the Unitarian Church is the source of the resolution directed to Valero’s Board - there is a real chance that larger, institutional investors like the New York City pension fund, might join in and give the resolutions a real shot at passage. Nevertheless, a spokesperson for Valero dismissed the resolution as the work of a “shareholders activist group.”
From a purely corporatist perspective, Valero has a point. After all, spending a few million dollars in a deceptive political campaign - does anyone really believe for an instant that their opposition to AB 32 is out of concern for the potential loss of jobs in California? - is chump change compared to what they would need to do to bring their heavily polluting refineries into compliance with the law.
There are actually two interesting things about this story. The first is that a group of shareholders, small though they are, might spark an uprising to demand that these oil companies actually behave in a way that is not entirely about the immediate bottom line. After all, corporations exist for the benefit of its shareholders and those shareholders are free to redefine that benefit in any (legal) way that they choose. Perhaps a benefit that looks toward the future of a changing climate is one that a corporation’s Board could reasonably pursue.
The second interesting part of the story is how large institutional investors are set to come out in opposition to Prop 23. From the article:
The announcement marks the beginning of a concerted campaign by a group of large investors to defeat Proposition 23 and preserve the California law cutting industrial and vehicle emissions. Next week, several large investment firms — including one of the world’s largest, Deutsche Asset Management — are expected to formally announce opposition to Proposition 23.
“If Prop. 23 passes, it would be a considerable setback for renewable energy investment in the U.S.,” said Mayura Hooper, a spokesman for Deutsche Asset Management. “Investors require consistent and long-term policies, and if a leader like California suspends its regulatory framework for climate change, there is a high risk that other states will follow.”
So it isn’t just the “enviro-wackos” (as some would label us) who oppose Prop 23 - it is also the investment funds that have historically driven a great deal of new, hi-tech business growth in this traditionally cutting-edge State. Of course, what the hi-tech investors fear - that if California falls back, so will others - is just what the fossil fuel industry is hoping will occur. But they aren’t just hoping - they are pouring their shareholders’ money into the fray.
High time that some of those shareholders say, “Not so fast.”