Climate change becoming top shareholder concern

Climate change concerns are becoming the biggest priority for shareholders, according to a study released by Ernst & Young on Tuesday morning.

Environmental and social concerns made up nearly 40 percent of all shareholder proposals for the first six months of 2013, outpacing concerns about how company boards are structured or compensation issues, which made up 29 percent and 18 percent of all proposals.

“Forward-looking companies are preparing for the low-carbon economy, assessing strategic risks and compliance considerations, increasing operational efficiency, identifying competitive advantages that can be gained through more sustainable business practices, and communicating these efforts to investors,” Ernst & Young wrote.

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Energy companies are feeling the impact of this increased focus.

Exxon Mobil was sharply criticized at a shareholder meeting in May for its climate change policies. The company has opposed explicit greenhouse gas reduction goals, instead pushing for a carbon tax to help battle climate change.

Many companies are working hard to be more responsive to shareholder concerns.

“We have recently seen boards react to the increased amount of shareholder activism in the oil and gas sector, at Murphy Oil, Hess, and Occidental Petroleum,” said John M. White, portfolio manager for Triple Double Advisors, an energy-focused investment firm in Houston.

ConocoPhillips CEO Ryan Lance openly acknowledged the role of humans in climate change, speaking immediately after the company’s shareholder meeting in May. Lance said that Conoco is focusing on reducing emissions and is investing in improving its energy efficiency, but stopped shy of supporting greenhouse gas reduction targets for the energy sector.

Shareholder proposals have increased 6 percent in 2013 from the same time period last year.