The ability of shareholder activists to force firms to improve
their environmental credentials increased recently after Ford
spelt out how it plans to reach its target of cutting emissions
from its new vehicle fleet by 30 per cent by 2020 - marking
a first in the automotive industry.
The decision to publish its emission reduction strategy came
in the wake of climate change-related shareholder resolutions,
put forward by members of the Investor
Network of Climate Risk Network (INCR) - a green investor
coalition organised by CSR group Ceres
and the Interfaith
Center on Corporate Responsibility (ICCR).
The two groups - which both aim to promote better understanding
for investors of the financial risks and opportunities presented
by climate change - have now agreed to drop their shareholder
resolutions against Ford.
Ford outlined a detailed analysis of its emission goals for
its fleet to investors, demonstrating how its 30 per cent
emissions reduction target could be achieved - a target it
claims is consistent with the 60 to 80 per cent reduction
in emissions by 2050 that Ford and other US companies signed
up to as part of the US
Climate Action Partnership.
Sue Cischke, Ford's group vice president of sustainability,
environment and safety engineering, said that the company
had spent three years studying a range of potential actions
needed to achieve CO2 reduction goals
and had now shared the findings with its institutional investors.
"We realise much work remains to be done and we look
forward to continued collaboration in addressing the challenges
of climate change" - she said.
Investors heralded the move as a victory for shareholder
activism and urged other car manufacturers to release more
details on how they plan to cut emissions in line with the
voluntary targets they have signed up to. Denise Nappier,
state treasurer for Connecticut, which is a a member of the
INCR, said the move represented - "a defining moment
for the automobile industry".
"I encourage other auto companies to follow Ford's lead
and help shape a sustainable environment, conductive for business
growth and success" - she added.
Mindy Lubber, president of Ceres and director of the INCR,
said that although a valiant first step, "Ford, as well
as General Motors, needs to do much more - and quickly - to
reclaim their leadership role in the global marketplace".
The move further underlines the growing pressure listed firms
are under from investors to enhance their green credentials
and disclose more details of their environmental record.
According to recent figures from Ceres, a record 54 global
warming-related shareholder resolutions have been filed with
US companies as part of the 2008 proxy season - nearly double
the number of two years ago.