The Long Haul: Dominion Virginia Power
On Wednesday, Dominion will hold its annual meeting, and some observers expect fireworks, as activist shareholders propose changes in the way the company is run. The push for more green power was launched by one woman who’s been crusading for years.
Dominion Virginia Power is the state’s largest producer of greenhouse gases that are changing the planet’s climate. That bothered Hampton Roads resident Ruth McElroy Amundsen, and in 2008 she decided to do something about it. An engineer from NASA and the mother of two, she asked other shareholders to approve a series of resolutions urging Dominion to address climate change and sustainability issues.
“I think the most ones that involve clean energy have ever gotten is about 5%. Last year, we got 22% on one that asked Dominion to just take a look at the financial, physical and reputational risk of climate change, and asked Dominion to do something to address them, and that got 22%.”
And that’s huge, according to Jeff Gramm, a hedge fund manager who teaches business at Columbia University.
“That’s billions of dollars of share value that voted in favor of her resolutions. It’s pretty impressive. It speaks to the fact that the big investors are beginning to equate the climate change issues with their long-term profits.”
That, Gramm says, is the name of the game when it comes to shareholder activists.
“That’s the activism that has historically been successful. It does have to resonate with the large institutions and their profit motive.”
In his new book, Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism, Gramm details earlier efforts that won less than five percent of the votes at annual meetings.
“In 1948, this activist James Peck bought shares in the Greyhound Bus Lines to try to pressure them to integrate their southern lines. Probably the most famous one is Campaign GM, which was run by Ralph Nader in 1970.”
While his demands won less than three percent of shareholder votes, that was enough to get General Motors’ attention.
This year, Ruth Amundsen and her allies will ask Dominion to put a new member on its board – someone with deep expertise in climate science and environmental matters. They’ll call on the company to report on the financial risk of pressing ahead with plans to build another nuclear reactor at North Anna, and to assess what climate change may mean for its business in the future.
No matter how many votes they get, the resolutions are not binding.
“And there is a rich history of big corporations ignoring non-binding resolutions that the shareholders have approved even.”
But Gramm adds that one big, unhappy shareholder could lead to changes in leadership and Dominion.
“If Calpers, the big union in California, decides Dominion is not managing the company for the long term in terms of sustainability and corporate responsibility, that could be a problem for the CEO.
Amundsen says she’s in this fight for the long haul -- pressing Dominion develop more solar capacity, move more quickly to build offshore wind turbines and stop converting coal burning power plants to biomass – wood and other plant material.
“Biomass plants actually emit more CO2 per kilowatt hour produced, so it’s not really a good investment to change those plants to biomass.”
This year’s meeting will be held not in Virginia but in Charleston, South Carolina. Amundsen thinks the company may be hoping to keep its distance from protestors, but she and other environmental activists plan to be there.