PPL shareholder vote backs climate change proposal

Utility not the only company to face such a vote this proxy season

Shareholders of PPL Corporation have asked the utility company to produce reports on how it will be affected by efforts to limit climate change, despite the board opposing such a move.

PPL reports that 56.8 percent of votes, not taking into account abstentions, backed the motion at the company’s recent annual shareholder meeting.

Under the resolution in the company’s proxy statement, shareholders ask PPL to publish, with board oversight, an assessment of the long-term impacts on the company’s portfolio of ‘public policies and technological advances that are consistent with limiting global warming to no more than 2°C over pre-industrial levels.’ The resolution states that such a report could include:

  • How PPL could adjust its capital expenditure plans to align with a 2°C scenario
  • Plans to integrate technological, regulatory and business model changes such as electric vehicle infrastructure, distributed energy sources, demand response, smart grid technologies and customer energy efficiency, as well as corresponding revenue models and rate designs.

The PPL shareholder proposal states that the so-called Paris Climate Agreement, which aims to keep global temperature rise well below 2°C, will begin to shape national policy decisions. The International Energy Agency estimates that the global average carbon intensity of electricity production will need to drop by 90 percent to meet the agreement’s goal, proponents say.

‘As long-term shareholders, we would like to understand how PPL is planning for the risks and opportunities presented by global efforts to keep global temperatures within acceptable boundaries,’ they add.

The proponents state that PPL is the seventh-largest carbon dioxide emitter in the US and relies on coal for more than 60 percent of its power generation. ‘PPL does not have a [greenhouse gas] reduction goal, and does not provide information on its long-term strategy or plan to decarbonize in ways that are consistent with the Paris Climate Agreement,’ they write. ‘As investors, we are concerned that PPL is not properly accounting for the risk of its current high reliance on carbon-intensive generation.’

Allentown, Pennsylvania-based PPL, which says it has more than 10 million utility customers in the US and the UK, is not the only company facing such pressure this proxy season. Occidental Petroleum shareholders recently voted – also against the wishes of the board – to support a motion seeking to require the company to publicly discuss the potential effects of climate change on the company (CorporateSecretary.com, 5/24). 

Writing in the proxy statement, PPL’s board of directors says adopting the proposal would not be in the best interest of shareowners.

‘In the absence of any clear governmental policy directive or regulatory framework specific to a 2°C scenario, assessing such a scenario would be both premature and impractical,’ they argue. ‘To undertake such an assessment in the absence of a clear regulatory framework would require PPL to make a number of assumptions that may not be valid in a broader context. Further, we believe it is unnecessary in light of PPL’s current business mix and our continued actions.’

The board states that more than 80 percent of the company’s 2016 earnings were driven by its non-generating UK and Pennsylvania utility businesses, and that its overall carbon emissions in 2016 were down more than 55 percent from 2011 and 47 percent from 2014.

It also points to steps the company has taken, such as an electric vehicle pilot in the UK and getting a government grant in Pennsylvania to study and deploy technology that will connect more solar-generated electricity to the grid.

‘As we continue to focus on the long-term needs of our shareowners and customers, we will continue to assess a wide range of opportunities and risks associated with environmental and other matters. To the extent we identify risks or opportunities that could have a material impact on PPL, we will disclose them in filings with the [SEC],’ the board writes.

A PPL spokesperson says the board of directors will carefully consider the results of the vote and determine the best path forward, adding that no timetable has been set. ‘At the same time, we remain committed to advancing a sustainable energy future, and we have demonstrated this commitment through many initiatives,’ the spokesperson says, noting that PPL recently issued a sustainability report. ‘Looking ahead, we will continue to assess a wide range of opportunities associated with environmental and other matters,’ the spokesperson adds.


You must be registered to comment.

Please Sign In or Register.

We use cookies to make our website function properly and deliver our services. By using our website, you agree to our use of cookies, please click here to learn how to manage and delete cookies.