Almost 40 percent back Sempra Energy climate-lobbying proposal
A shareholder proposal regarding Sempra Energy’s lobbying in relation to climate change has gained significant – though not majority – backing.
Roughly 38 percent of votes cast at the company’s May 14 AGM were in favor of a proposal brought by co-filers As You Sow, Calvert Research and Management and Illinois State Treasurer Michael Frerichs. The proposal asks the Sempra Energy’s board to issue a report describing ‘if, and how, Sempra’s lobbying activities (direct and through trade associations) align with the Paris Agreement’s goal to limit temperature rise to [1.5°C] and how Sempra plans to mitigate risks presented by any misalignment.’
The proponents write in a supporting statement: ‘Corporate lobbying activities that seek to prevent climate-related laws and regulations present growing risk to investors. Delays in implementing the Paris Agreement’s decarbonization goals increase the physical risks of climate change, pose systemic risk to economic stability, and introduce uncertainty and volatility into investor portfolios.
‘While Sempra discloses how its trade associations align with its own views on climate change, current reporting does not disclose whether its lobbying is aligned with Paris goals, especially regarding natural gas use.’
The company unsuccessfully requested that the SEC grant it no-action relief to exclude the proposal from its proxy statement, arguing that as per Rule 14a-8(i)(10) it has substantially implemented the measure. In that request, Sempra Energy argues that its existing disclosures on its website regarding its direct and indirect lobbying activities, including how those activities align with the Paris Agreement’s goal of limiting global temperature rise, are ‘directly responsive to each element of the proposal.’
The board urged shareholders to vote against the proposal, arguing in the proxy statement that ‘the company’s existing thorough and transparent lobbying disclosures provide all material information needed by investors to understand and evaluate the extent and scope of our lobbying activities, including as they relate to sustainability and global warming, such that the requested report would be duplicative and unnecessary.
‘More importantly, as reflected in our annual corporate sustainability reports and other public disclosures, we have demonstrated our ongoing commitment to the environment and fighting global warming with a strong track record of transparency and achievement in this area.’
‘This proposal underscores shareholder concern about anti-climate lobbying activities, whether done directly by a company or by its trade association,’ says Lila Holzman, senior energy program manager of As You Sow, in a statement following the vote. ‘Shareholders want companies to ensure their lobbying is aligned with the Paris goals.
‘With this strong vote, investors are demanding answers as to how Sempra will resolve the apparent disconnect between its lobbying activities and the need to align its enterprise with the ongoing net-zero energy transition.’
A representative for Sempra Energy did not respond immediately to a request for comment.