Valero, Tesoro and Occidental Face Shareholder Pressure for California Proposition 23 Support

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Valero, Tesoro and Occidental Face Shareholder Pressure for California Proposition 23 Support

Investors File Resolutions Challenging Company Political Spending Policies and Procedures
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Summary

Responding to the oil companies’ financial backing for California’s controversial Proposition 23, investors today announced they have filed shareholder resolutions with Occidental Petroleum (Occidental), Valero Energy Corp. (Valero) and Tesoro Corporation (Tesoro) requesting Board-level review and oversight of the companies’ political expenditures and policies. Proposition 23 aims to suspend California’s landmark global warming law and, if passed, would undermine national efforts to reduce pollution causing climate change.

 

Press Release
Wednesday, October 13, 2010 - 11:56am

(3BLMedia/theCSRfeed) Los Angeles, CA - October 13, 2010 - Responding to the oil companies’ financial backing for California’s controversial Proposition 23, investors today announced they have filed shareholder resolutions with Occidental Petroleum (Occidental), Valero Energy Corp. (Valero) and Tesoro Corporation (Tesoro) requesting Board-level review and oversight of the companies’ political expenditures and policies. Proposition 23 aims to suspend California’s landmark global warming law and, if passed, would undermine national efforts to reduce pollution causing climate change.

“As shareholders, we’re concerned that Tesoro’s support for the highly controversial Proposition 23 could lead to a decrease in shareholder value by damaging the company’s reputation and negatively impacting the business environment in a state where Tesoro has significant operations,” said Laura Campos, Director of Shareholder Activities at the Nathan Cummings Foundation, which filed a shareholder resolution requesting improved disclosure and accountability on political spending at Tesoro.
 
Texas-based Valero and Tesoro have spent $4 million and $1.5 million, respectively, in company money on the ballot initiative. Occidental has spent $300,000. Other oil majors, like California-based Chevron, have chosen to remain on the sidelines of this political battle, while Royal Dutch Shell opposes the ballot initiative.
 
“Climate change is a serious threat to our planet and economy. We are concerned that Prop 23 will remove important market signals necessary to transition to cleaner business practices,” said Larisa Ruoff, Director of Shareholder Advocacy for Green Century Capital Management, which filed the shareholder proposal at Occidental
 
“That Valero and the other companies are using company money for such overt political purposes is both inappropriate and reflects poor governance. Beyond stifling California’s fast-growing clean tech economy, rolling back this law will delay the nation’s much needed transition to a clean energy economy and greater energy independence,” said Mindy Lubber, president of Ceres, which coordinates shareholder resolutions, and Director of the Investor Network on Climate Risk, a $9 trillion network of investors.
 
More than 40 percent of all clean-tech venture capital funding worldwide went to California businesses, according to a recent report by Next 10. Clean-tech companies employ about 20,000 manufacturing workers in the Los Angeles and Bay Areas alone.
 
If Proposition 23 passes it would effectively repeal California’s groundbreaking clean energy and global warming law AB32 until state unemployment reaches 5.5% for four consecutive quarters, a scenario which has only occurred three times in the last 40 years.
 
AB32, which goes into effect in 2012, calls for limits on greenhouse gas emissions generated by industry, transportation, electricity generation and natural gas consumption. The law also calls for a third of the state's electricity and energy to come from renewable resources by 2020.
 
“As a religious organization, the Unitarian Universalist Association calls on all companies in which it invests to support - not undermine - public policies that reduce climate change,” said Tim Brennan, treasurer at UUA, which filed the shareholder resolution with Valero. “Our values compel us to protect the planet and to stand with marginalized people, who are disproportionately harmed by the impacts of global warming. Valero’s extraordinary support for Proposition 23 delays the country from tackling an urgent human, environmental and economic concern and puts our shareholder value at risk.”
 
Political spending by corporations has become higher profile in the wake of the Supreme Court Citizen’s United decision, under which companies are now legally able to make independent expenditures for or against candidates and also can hide such payments by passing them through other organizations or trade associations.
 
“Improved disclosure and oversight of political spending is more important now than ever,” says Tim Smith, senior vice president at Walden Asset Management. “These three companies ought to conduct a thorough board-level review of their political expenditures and their decision-making process for political spending and report to shareholders.”
 
Primary Filers on Shareholder Resolutions:
Valero: Unitarian Universalist Association
Tesoro: Nathan Cummings Foundation
Occidental: Green Century Capital Management, The Needmor Fund
 
Laura Campos, Nathan Cummings Foundation, 212-787-7300 ext. 235
Tim Brennan, Unitarian Universalist Association, 617-948-4305
Larisa Ruoff, Green Century Capital Management, 617-482-0800
 
About Ceres
Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges. Ceres also directs the Investor Network on Climate Risk, a network of 90 investors with collective assets totaling about $9 trillion. www.ceres.org
 
Walden Asset Management is an investment firm based in Boston, integrates environmental, social and governance issues into its investment decisions and engagements with companies. Walden clients are involved in the filing of these resolutions. www.waldenassetmgmt.com

 

Contact

Peyton Fleming
Ceres
http://www.ceres.org
http://www.waldenassetmgmt.com
Tim Smith
Walden Asset Management
http://www.waldenassetmgmt.com