GM and Ford Shareholders File Climate Resolutions
By J.R. Pegg
WASHINGTON, DC, December 12, 2002 (ENS) - Shareholders of Ford and General Motors (GM) have filed resolutions to pressure both automakers into more aggressive action on reducing greenhouse gas emissions from their plants and vehicles.
The resolutions, filed by religious groups that belong to the Interfaith Center on Corporate Responsibilities (ICCR), indicate that the relative inaction by both Ford and GM on climate change is not only an environmental concern, it is also a risk to the financial health of the companies.
"This isn't just about what is bad for the environment, it is also about what is bad for investors of General Motors and Ford," said Sister Patricia Daly, executive director of the Tri-State Coalition for Responsible Investment, which represents some 30 religious orders and Diocesen members from the states of Connecticut, New Jersey and New York.
The resolutions call for both automakers to measure and report to their shareholders on carbon dioxide emissions from their plants and products by August 2003 and to commit to significantly reducing those emissions by 2012, with further reductions by 2020.
They also call for an evaluation of what new public policies would enable and assist the company in achieving those emission reductions.
Cars and trucks are a major source of carbon dioxide, a primary greenhouse gas that has been linked to global warming. U.S. cars and trucks are responsible for some 20 percent of the country's carbon dioxide emissions, accounting for more carbon dioxide emissions than all but three countries in the world.
According to Daly, these resolutions were triggered by the continued efforts of GM and Ford to undermine efforts to increase fuel economy standards at both the state and federal level.
These are the first global warming resolutions filed by GM or Ford shareholders since 1999. Those earlier resolutions, which were filed by many of the same groups, were withdrawn as a sign of support for the automakers' withdrawal from the Global Climate Coalition (GCC), a now defunct industry group that challenged evidence of global warming and lobbied against climate change initiatives.
Recent lobbying against a Senate bill aimed at increasing fuel economy standards as well as opposition to a California law requiring automakers to cut emissions and sell zero emission vehicles finally drained the remaining positive capital either company had earned from leaving the GCC, Daly said.
The resolutions cite the failure of GM or Ford to "to propose alternative plans to achieve comparable environmental results."
Ford and GM, for their part, claim their fuel economy is increasing and that they are already doing much of what these resolutions ask of them. Ford points to its public commitment to improve the fuel economy of its sport utility vehicle (SUV) fleet by 25 percent by 2005 as well as to cut carbon dioxide emissions of its European fleet and manufacturing plants by 25 percent by 2008. The company said a record of its greenhouse gas emissions is publicly available.
GM officials say their company's greenhouse gas emission figures are available in its annual sustainability report as well as on its website.
The shareholders who filed the resolutions and their supporters believe both firms could be doing much more. Japanese automakers, notably Honda and Toyota, have seized the lead in hybrid vehicles and fuel efficiency, and have also recently debuted hydrogen powered fuel cell vehicles. A recent report ranking the environmental performance of automakers by the Union of Concerned Scientists found Ford and GM trailing Honda, Toyota and Nissan.
"Ford and GM should be shedding environmental liabilities instead of being stuck in the mud in yesterday's economy, while the Japanese competition steps boldly ahead to capture the emerging market for greener vehicles," says Kevin Knoblach, executive director of the Union of Concerned Scientists.
"These companies are not at a technological disadvantage compared to Honda or Toyota," he said. "Rather, these companies have been less aggressive and more risk averse at putting the technologies on the road."
Companies with highly rated environmental records perform better financially, Daly said, and the filers of these resolutions do not want to see Ford and GM fall further behind Japanese automakers who have more readily reacted to concerns over global warming.
The current U.S. fuel economy standard, known as the Corporate Average Fuel Economy (CAFE) standard, for cars is 27 mpg and has not been changed since 1985. The standard of 20.7 mpg for light trucks was established in 1996. Critics of raising either standard say smaller, more fuel efficient vehicles are less safe, and mandating higher fuel economy would limit consumer choice.
Officials from the Department of Transportation have drafted a proposal to for a 1.5 mpg increase in the CAFE standard for light trucks, which will be phased in over three years. Environmentalists have labeled this change "miniscule."
The request that Ford and GM increase fuel efficiency and reduce greenhouse gas emissions has national security implications, Knobloch said.
U.S. cars and trucks consume some 11 percent of the world's total oil production and account for 40 percent of U.S. annual consumption.
The United States consumes some 20 million gallons of oil a day, a figure expected to grow to 27 million by 2020, and more than half of the oil consumed in the United States is imported.
Less pollution from vehicles could also have a noticeable impact on public health, Knobloch added. Nearly 100 million Americans live in areas with levels of smog, particulate matter, sulfur dioxide and other pollutants deemed unhealthy by the U.S. Environmental Protection Agency.
Neither Ford nor GM would comment directly on the resolutions, which will be voted on at the companies' annual meetings in spring 2003. How pressured the automakers feel by these resolutions, filed by groups that hold only a fraction of their stock, remains to be seen.
There were 19 global warming resolutions filed in 2002, with support levels averaging 18.8 percent, Cogan said. The resolutions filed with GM and Ford in 1998 and 1999 averaged less than five percent support, but Cogan predicts the current resolutions are likely to find "double-digit support."
"The emerging trend is that institutions are coming to see global warming as an issue that could have a material impact on the companies they own," Cogan said. "They increasingly feel they have a fiduciary responsibility to support more disclosure from management on this issue."
A copy of the shareholders' resolution can be found by clicking here.