Posted on 16-12-2002
GM
& Ford Shareholders File For Climate
By J.R. Pegg (Photo shows Sister Patricia Daly, a Caldwel1 Dominican
nun
from Newton, New Jersey)
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 high greenhouse
gas
intensity of U.S. vehicle manufacturers undermines the competitive
positioning of U.S. automakers both here and abroad, as the
world,
including their competitors, move forward to address climate
change," said
Daly, speaking on behalf of her organization as well as the
ICCR.
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. GM and Ford also
had the
highest carbon emissions of the top six U.S. automakers in 2000,
Daly said,
and GM's "carbon burden" grew 13 percent between 1990 and 2000,
with Ford's
increasing 26 percent over the same period.
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. Both automakers are pursuing
hybrid
vehicles, with Ford aiming to release a hybrid SUV next year
that the
company predicts will get 35-40 mpg in the city and 27-29 mpg
on the
highway. By comparison the 2003 Ford Explorer XLS gets 17 mpg
in the city
and 21 mpg on the highway.
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. According to
the
shareholder resolutions, available and emerging improvements
to
conventional technologies could allow automakers to build a
fleet of
vehicles that average some 40 miles per gallon (mpg) by 2012.
Hybrid
gasoline-electric vehicles could boost that average to at least
55 mpg by
2020, the shareholders add, and these "fuel economy gains can
be achieved
without sacrificing safety, comfort or utility for consumers."
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. Shareholder resolutions
on
global warming are on the rise and are gaining more support,
according to
Doug Cogan, deputy director of the Social Issues Service of
the Investor
Responsibility Center (IRRC), an independent research firm that
tracks
proxy voting activity. 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
www.hastingsgroup.com/GM_Ford_global_warming_resolution.pdf
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