The Dodd-Frank Rollback and climate change

We try to stay non-partisan at SaveEPA, since we truly believe that protection of public health and environment is a bi-partisan issue. But sometimes the House GOP’s actions are so anti-public interest that we have to call them out. That’s the case with the “shareholder engagement” changes passed by the House last week as part of the Dodd-Frank rollback.   The House GOP (heavily funded by fossil fuel companies) has apparently decided that disclosing climate-related risks to investors is a very bad thing.

(An analysis of what the Dodd-Frank rollback means overall.)

Public interest groups use “shareholder resolutions” to make a corporation change the way it does business.  They have been used to raise publican awareness and pressure corporate boards to take specific actions – like stop selling tobacco products or divest from South Africa.

Shareholder resolutions have been effectively used for decades to force disclosure of environmental risks.  For example, if a company is liable to cleanup dozens of Superfund sites, that’s a big environmental risk to shareholders.  Superfund cleanup is expensive, and those cleanup costs will ultimately impact the bottom line – and shareholder returns.

Energy companies are now being pressed to disclose the financial risks of climate change.  About 175 of the roughly 1,000 shareholder resolutions submitted to companies in 2016 concerned corporate climate-change policy.”  Pension company investors are among these  shareholders, and the resolutions are gaining traction.

“Last week, a majority of ExxonMobil shareholders voted to instruct the company to disclose more information about the risk it faces from climate-change regulation. Last month, similar resolutions succeeded at oil and gas producer Occidental Petroleum and electric utility PPL Corp.”

So the House GOP decided to step in: the changes they’ve made would make it nearly impossible for shareholders tor bring resolutions of any kind. “Right now, any shareholder who owns either $2,000 or 1 percent of a corporation is entitled to file a shareholder resolution….the $2,000 threshold is gone. A shareholder would have to own at least 1 percent of the company to file a resolution — a prohibitively high bar for most investors. For a company the size of, say, ExxonMobil, that would be about $3.4 billion. “It severely curtails — obliterates — the ability of shareholders to file resolution on any issue,” said Tim Smith, who leads shareholder engagement at Walden Asset Management.”

The “Financial Choice Act” (love those bill titles!)  passed the House on a party line vote. (All of Colorado’s GOP  Representatives supported the measure).  The bill is not expected to pass the Senate – but this is Washington-Through the Looking Glass, so who knows.

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Save EPA has been an all-volunteer group of former EPA officials who became alarmed about the Trump agenda for EPA and joined together to fight it.

With newly-elected President-Elect Biden and VP-Elect Harris coming in January, the need to "save EPA" is much less urgent. This is not to imply all clear skies ahead - there is much re-building to do, there will be negative pressures on the new administration, and we will likely have policy differences in the future. However, we are hopeful that these differences will be discussed rationally, using science as a basis for moving forward, and keeping EPA's mission of protecting human health and the environment in the forefront.

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Thank you for your support and commitment during the past 3.5 years.  While the Trump assaults were unending, they were also frequently unsuccessful, and that was due in large part to public outrage.  Keep it up!  Although EPA will be in much better hands with a Biden administration, there is always a need for an informed and engaged public.

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