Southern Co. governance, shifting sands of Democrats’ environmental agenda
By David Pendered
Atlanta-based Southern Co. may be an early example of a power producer criticized by environmentalists for its pledge to comply with a provision of the Paris climate accord. Meanwhile, Joe Biden and the Democrats are trying to devise a climate platform to take on President Trump – one that satisfies the party’s centrist and progressive views on fossil fuels.
Southern pledged on May 27 to reach net zero carbon emissions by 2050. The company intends to plant trees, improve efficiency and devise technology to reduce emissions. This complies with the 2015 Paris Agreement on global warming by limiting the addition of greenhouse gases to the atmosphere. Hence the name, net zero.
New York City’s comptroller may have stoked the fire for the pledge. California’s $400 billion pension fund joined New York’s position. The Sierra Club swiftly added its criticism of Southern’s net zero pledge.
The NYC comptroller, on behalf of various city employee pension programs invested in Southern, asked for a restructuring of Southern’s leadership – severing the positions of CEO and board chairman. Such a move would enable the board to improve the company’s environmental policies, as well as its potential earnings from the emerging “low carbon economy,” according to the comptroller’s motion.
Southern’s board led a crushing defeat of the motion. Shareholders rejected the proposal with nearly 80 percent of the ballots, according to a federal financial disclosure. But not before this language from the NYC comptroller appeared in Southern’s notice of annual meeting:
- “We believe independent Board leadership would be particularly useful to oversee the strategic transformation necessary for Southern to capitalize on the opportunities available in the transition to a low carbon economy. …
- “Southern has failed to set a target of achieving net zero emissions by 2050. … We believe that a board chair independent of management would be better able to lead the process of setting a strategy to position Southern to take advantage of increased demand for decarbonized electricity….”
California’s state public pension system had endorsed New York’s call for a restructuring. CalPERS observed, in a proxy statement: “CalPERS believes that investors will benefit if the board is chaired by an independent director who can provide a balance of power between the CEO and the board, and support effective board oversight of management.”
Southern’s board, in its denunciation of the proposal to shareholders, observed the proposal is, “unnecessary, rigid and prescriptive….”
The Sierra Club castigated the pledge for the 30-year timeframe outlined by Southern Chairman/President/CEO Tom Fanning. Stephen Stetson, the organization’s senior campaign representative for the Beyond Coal Campaign, issued the following statement after Fanning made his net zero pledge:
- “It’s great to hear them talk about carbon like it matters, but we don’t have three decades to wait. The urgency of the moment requires more than tree planting and long-term R&D plans.”
This is the type of debate that may be occurring as Democrats work on an environmental agenda acceptable to centrist and progressive members.
The conversation may start with the Paris climate accord. It may race through the New Green Deal and move swiftly into possible responses to questions raised by reports such as this new one from Friends of the Earth, U.S./Oil Change International, which observed:
- “[S]ince the Paris Agreement was made, G20 countries have acted directly counter to it by providing at least USD 77 billion a year in finance for oil, gas, and coal projects through their international public finance institutions. These countries provided more than three times as much support for fossil fuels as for clean energy.”
Biden’s centrist position on the environment earned him the lowest ranking among three front-runners in a poll conducted by the youth-oriented Sunrise Movement.
The poll is dated, but its results remain relevant. On a scale with 200 being the highest, Biden scored 75; Elizabeth Warren, 171; and Bernie Sanders led the group with a score of 183.
Biden and Sanders have formed six task forces to come up with a platform that can unify voters to defeat Trump. Environment is one of the six and its two co-chairs represent two distinct camps:
- John Kerry, the former secretary of state for President Obama who helped broker the Paris Agreement. Kerry signed the accord in April 2016 and has defended it against Trump’s criticisms.
- Alexandria Ocasio-Cortez (D-N.Y.), the standard bearer of the nation’s progressive environmental movement and a former Sanders’ organizer. The Green New Deal was the first legislation she submitted in Congress. In many regards, Ocasio-Cortez represents the millennials Biden likely will need to defeat Trump.
Ocasio-Cortes sent a tweet May 13 to announce that she’d accepted Sanders’ request to co-chair the task force:
- “After conferring w/ grassroots activists and climate allies, I am accepting @BernieSanders’ nomination to co-chair the Climate Change Unity Task Force with Sec. @JohnKerry.
- “Our planet is dangerously imperiled, and wherever there are decisions made, the people must have a voice.”
Another Sanders appointee elaborated on her decision to join the task force. Varshini Prakash, Sunrise’s co-founder/executive director, wrote in a post on medium.com:
- “After much deliberation and consultation with movement leaders and allies, I’ve decided to accept the position. I am grateful for Bernie Sanders believing in me, I trust his political leadership, and believe this is an opportunity for our movement to continue to advance our fight for a Green New Deal. …
- “Our nomination on this task force shows Joe Biden and his campaign are beginning to take seriously that power and the significance of young people within the party if we want to defeat Trump this November.”