SEC Supports Increased Transparency at ExxonMobil and Southern Company
Companies’ attempts to keep resolutions off their proxy ballots rejected
April 5, 2011 – The Securities and Exchange Commission (SEC) determined that neither ExxonMobil Corporation* nor Southern Company* provided sufficient information on their operations to satisfy investor concerns expressed in shareholder proposals. Green Century Capital Management (Green Century) filed a shareholder proposal at ExxonMobil requesting increased disclosure on its oil sands operations and at Southern Company requesting increased disclosure on its management of coal ash. The resolutions were challenged by both Exxon and Southern. Green Century manages the environmentally responsible Green Century mutual funds.
“We are thrilled the SEC sided with investors and recognized neither company has adequately responded to our concerns,” said Larisa Ruoff, Director of Shareholder Advocacy for Green Century. “In the absence of meaningful disclosure, investors have no way of fully assessing the risks and rewards from investing in various companies. Shareholders need assurance that companies are candidly disclosing these risks and are adopting best management practices to minimize them,” she continued.
At ExxonMobil, Green Century filed a shareholder proposal challenging the company to disclose more information about its controversial investments in the Canadian oil sands. Canada’s oil sands, also known as tar sands, are the second largest oil resource in the world, comprising over 173 billion barrels in reserves. Extraction and conversion of oil sands into usable fuel is energy-intensive and environmentally-damaging, requiring clear-cutting of the Boreal Forest, extensive water use, and the creation of massive amounts of toxic waste. Investors and independent analysts have raised doubts about the long-term economic viability of oil sands development given the high costs of extracting and converting oil sands, along with risks to future profitability presented by rising carbon costs, environmental regulations, and oil price fluctuations.
At Southern Company, Green Century filed a shareholder proposal pressing the company to provide more transparency on its efforts to reduce environmental and health hazards associated with coal combustion waste contaminating local water sources and how those efforts may reduce risks to the company’s finances and operations. Coal ash is a byproduct of coal-fired power plants that contains arsenic, mercury, lead, and other toxins left after combustion or filtered out of smokestack scrubbers. The health, environmental, and financial risks of managing coal ash came to light in December 2008 when a dam holding back a 1.1 billion gallon coal ash pond belonging to the Tennessee Valley Authority (TVA) burst and covered over 300 acres with toxic sludge. TVA, the federally operated largest power plant in the country, has estimated spill-related costs at $1.2 billion and has been the target of over 50 lawsuits since the spill.
At the companies’ 2010 annual meetings, similar proposals were presented and over 26 percent** and 21 percent** of shares voted at ExxonMobil and Southern Company respectively were cast in support of the proposals. “At both companies, shareholders sent a strong message that a significant portion of the company’s owners are concerned about these issues and require more transparency to better understand the companies’ operations,” Ruoff continued. “We believe both ExxonMobil and Southern Company should respond to its shareholders by providing more information rather than challenging such requests at the SEC,” she said.
Both resolutions will be presented when the companies hold their annual meetings at the end of May.
Green Century Capital Management is an investment advisory firm focused on environmentally responsible investing. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century's mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. Green Century believes that shareholder advocacy is a critical component of responsible investing and actively advocates for greater corporate environmental accountability.
*As of December 31, 2010, neither ExxonMobil Corporation nor Southern Company was held by the Green Century Balanced Fund or the Green Century Equity Fund. Please refer to the Green Century Funds website for current information regarding the Funds' portfolio holdings. These holdings are subject to risk as described in the Funds' prospectus. References to specific investments should not be construed as a recommendation of the securities by the Funds, their administrator, or their distributor.
** The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation.
You should consider the Funds' investment objectives, risks, charges, and expenses carefully before investing. To obtain a Summary Prospectus and/or Prospectus that contains this and other information about the Funds, please click here, email info@greencentury.com, or call 1-800-93-GREEN. Please read the Summary Prospectus and/or Prospectus carefully before investing.
The Green Century Funds are distributed by UMB Distribution Services, LLC. 4/11
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