Paris-Aligned Climate Lobbying

Resolution Text

RESOLVED: Shareholders of Duke Energy (“Duke”) request that the Board of Directors conduct an evaluation and issue a report within the next year (at reasonable cost and omitting proprietary information) describing if, and how, Duke’s lobbying activities (direct and through trade associations and social welfare and nonprofit organizations) align with the Paris Climate Agreement’s goal of limiting average global warming to well below 2 degrees Celsius and how the company plans to mitigate risks presented by any misalignment.

Supporting Statement: According to the United Nation’s Environment Programme’s  2019 annual “Emissions Gap Report”[1] critical shortfalls remain between the commitments national governments have made and the actions needed to prevent the worst effects of climate change. Companies have an important and constructive role to play in closing these gaps.

Corporate lobbying activities that are inconsistent with meeting the goals of the Paris Agreement present regulatory, reputational and legal risks to companies and their investors. Delays in implementation of the Paris Agreement increase the physical risks of climate change, pose a systemic risk to economic stability and introduce uncertainty and volatility into our portfolios. We believe that Paris-aligned climate lobbying helps to mitigate these risks and contributes positively to the long-term value of our investment portfolios.

Trade associations and other politically active organizations that speak for business but too often present forceful obstacles to progress in addressing the climate crisis are particularly concerning to investors.

Two hundred institutional investors managing $6.5 trillion in assets wrote to Duke in 2019 seeking information on how the company is managing this critical governance issue, and investors have also raised these concerns in meetings with the company and in a follow up letter sent in the fall of 2020. Duke’s reply has not been responsive to this request.

In 2020 Duke committed to reach “net zero” emissions by 2050, in line with the goals of the Paris Agreement. To reach this goal, laws and regulations to support Duke’s investments in new technologies and clean energy resources are needed at local, state and federal levels.  However, investors lack enough information to understand whether Duke works to ensure that its direct lobbying activities and its support for indirect lobbying by trade associations and nonprofit organizations aligns with its net zero goals, and whether Duke takes action to address any misalignments.

Duke is a member of the U.S. Chamber of Commerce and its CEO is a member of the Business Roundtable; both recently issued new climate change policies but only after lobbying for many years against effective climate change regulations.[2] Duke does not disclose its support for politically active social welfare and nonprofit organizations.  However Duke has been linked in recent years with controversial groups, including the American Legislative Exchange Council,[3] which has supported state anti-climate laws and regulations; the Utility Air Regulatory Group,[4] which worked to roll back federal climate regulations; and the Consumer Energy Alliance,[5] which promoted the Atlantic Coast Pipeline and has opposed state level climate action.

 

[1]https://www.unenvironment.org/resources/emissions-gap-report-2019 

[2] https://www.politico.com/newsletters/the-long-game/2020/09/22/climate-week-hot-air-490392; https://www.responsible-investor.com/articles/influencemap-industry-lobby-groups-have-made-minimal-progress-in-reforming-their-anti-climate-lobbying 

[3] https://www.bizjournals.com/charlotte/news/2018/03/28/duke-energy-won-t-comment-on-top-state-lobbyists.html

[4] https://www.politico.com/story/2019/02/20/epa-air-pollution-regulations-wehrum-1191258

[5] https://www.facingsouth.org/2019/12/big-energy-front-group-launches-push-troubled-atlantic-coast-pipeline

Co-filer

Rob Fohr
Presbyterian Church (USA)
Mary Minette
Daughters of Charity, Province of St Louise
Andrea Westkamp
Benedictine Sisters of Virginia
Nora Nash
Sisters of St. Francis of Philadelphia

Lead Filer

Mary Minette
Mercy Investment Services