Support for shareholder resolution on methane emissions

We expect companies engaged in activities with large greenhouse gas emissions, including methane emissions, to have a strategy for the transition to a low-emission energy system and a framework to monitor and report on emissions.

8 May 2018

We will support the shareholder resolution asking for a report reviewing Kinder Morgan’s policies, actions and plans to measure, monitor, mitigate, disclose and set quantitative reduction targets for methane emissions from all operations, including storage and transportation. The resolution will be voted on during the Annual General Meeting on 9 May.

“Around a decade ago we formulated our climate change expectations to the companies we are invested in. With our support for this proposal, we emphasise that our expectations also cover methane emissions", says Chief Corporate Governance Officer Carine Smith Ihenacho.

Methane is the second largest contributor to human climate greenhouse gas emissions after CO2. According to a study by IPCC1, methane has a shorter lifetime than CO2 in the atmosphere, but has an effect on global warming that is about 25 times worse than CO2 over a 100-year time horizon.

Our rationale

We will support the shareholder resolution asking for a report reviewing Kinder Morgan Inc’s policies, actions and plans to measure, monitor, mitigate, disclose and set quantitative reduction targets for methane emissions from all operations, including storage and transportation.

We encourage companies to integrate material climate change challenges and opportunities in their business management. Companies engaged in activities with large greenhouse gas emissions or intensities, including fugitive methane emissions, should have a strategy addressing a transition to a low-emissions energy system and should develop a framework to monitor such emissions.

We encourage the transparent disclosure of material greenhouse gas emissions to appropriate, internationally recognised reporting initiatives to better enable investors to analyse climate-related risks and opportunities. For example, the supplemental guidance of the Task Force on Climate-related Financial Disclosures (TCFD) encourages companies in the energy sector to disclose fugitive emissions. Benchmarks and targets, and performance against these, should be quantified where relevant.

Our expectations on climate change strategy

1 http://www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1-chapter2.pdf

 

Item

Proposal

Our voting Intention

1.1

Elect Director Gilberto Tomazoni

FOR

1.2

Elect Director Denilson Molina

FOR

1.3

Elect Director Wallim Cruz De Vasconcellos Junior

FOR

1.4

Elect Director Vincent Trius

FOR

1.5

Elect Director Andre Nogueira de Souza

FOR

1.6

Elect Director Farha Aslam

FOR

2.1

Elect Director Michael L. Cooper

FOR

2.2

Elect Director Charles Macaluso

FOR

2.3

Elect Director Arquimedes A. Celis

FOR

3

Advisory Vote to Ratify Named Executive Officers' Compensation

FOR

4

Approve Omnibus Stock Plan

FOR

5

Ratify KPMG LLP as Auditors

FOR

6

Report on Reduction of Water Pollution

FOR

7

Report on Human Rights Due Diligence Process

FOR

 

 

 

 

Important legal notice

Norges Bank Investment Management’s approach to responsible investing includes disclosing our voting decisions, in some cases in advance of the relevant meeting. This is only intended to provide information and is not solicitation or encouragement as to how others should vote. This disclosure is not investment research, advice or recommendation. Norges Bank Investment Management’s voting intention is an internal decision and has not been agreed with any other shareholders. Norges Bank Investment Management is not subject to any prohibition on dealing after the publication of this disclosure. Norges Bank Investment Management’s holdings and holdings available for voting from time to time may differ from those set out in lists of holdings as of year-end.