LEILA FADEL, HOST:
Over the next few months, shareholders in publicly traded companies will be gathering at annual meetings to weigh in on how companies are run. They'll vote on issues like executive pay and who sits on corporate boards. And a big focus again this year is climate change. Michael Copley joins us from NPR's climate desk to explain what's going on. Good morning, Michael.
MICHAEL COPLEY, BYLINE: Hey. Good morning, Leila.
FADEL: So these are companies that millions of Americans are invested in through their retirement funds. So which issues are getting a lot of attention at these meetings?
COPLEY: Yeah, so every year, investors can submit what are called shareholder resolutions. It's just a way to ask a company to do something, and all the shareholders get to vote. According to one recent tally, shareholders had filed more than 500 resolutions so far this year, asking companies to address environmental, social and corporate governance issues. Out of all those resolutions, almost a quarter focus on climate change. And more climate resolutions have been filed so far this year than at the same point in 2022.
FADEL: So why so many resolutions now?
COPLEY: You know, I've heard a couple explanations. One is just that more investors are worried about climate change. Scientists working for the United Nations recently said the Earth's on track for catastrophic warming that'll bring more extreme weather - stuff like hurricanes, floods and droughts - that can cause a lot of economic damage in addition to human suffering. The other thing is U.S. regulators have made it harder for companies to block certain kinds of shareholder resolutions.
FADEL: OK, so what kind of things are investors asking for?
COPLEY: You know, I think in general, investors are trying to understand how companies are contributing to climate change and how they're dealing with the problem. So they want companies to make plans for cutting greenhouse gas emissions. Investors also want to know how companies are preparing for changes in the economy and new regulation - so shifting to more renewable energy and electric vehicles. I talked to Kirsten Snow Spalding at Ceres. It's a nonprofit that works on sustainability issues. Here's how she described it.
KIRSTEN SNOW SPALDING: In layman's terms, it's set targets. Issue plans. Give us clear disclosure. And all of it is about, how are you addressing the risks and moving forward towards the opportunities?
COPLEY: Investors also want to know what companies are doing behind the scenes, lobbying on issues related to climate change.
FADEL: So there's real concern here, and investors are pressing their case. Are we seeing big changes, though, in corporate policies?
COPLEY: Companies have made a lot of promises to cut emissions, and I think that's because of shareholder pressure. Investors are talking to these companies all year round, and these annual meetings are a good way for shareholders to sort of apply more pressure. Some proposals never go to a vote because the two sides strike a deal. But what we also know is that while the number of climate proposals is increasing, when it came time to vote at meetings last year, support on average fell. Some say that's because proposals by activist shareholders have just gotten more ambitious. So maybe the resolutions were more aggressive than mainstream investors could stomach. Others say some proposals were too heavy-handed, so there was concern that they might interfere with how companies are managed.
FADEL: While all this negotiation is going on, emissions are going up. So what's the outlook for the votes that are coming up?
COPLEY: You know, we've seen some activists have sort of tweaked their strategies. So instead of calling for banks to cut off funding for fossil fuels, they're asking to sort of set windows for phasing out funding to kind of give them more leeway. But I think there's still going to be tension between what scientists say we need to do to meet climate targets and what a lot of companies say is doable. You know, just recently, a big insurance company said it's going to require clients in the oil and gas industry to cut emissions of methane. It's a potent greenhouse gas. A big shareholder group said, great, but it's not enough, and we're going to keep pushing for more aggressive action.
FADEL: NPR's Michael Copley, thanks so much.
COPLEY: Thanks, Leila. Transcript provided by NPR, Copyright NPR.
