Year in Review: Turning the Soil

Climate disruption

As 2016 dawned, the glow of the Parisian accord still radiated among the many activists working toward a 2°C-compliant economy, Preventable Surprises included. We held an online dialogue in April to plan for the spring annual general meetings, devising strategies to secure a “yes” vote from institutional investors on climate friendly resolutions.

Our strategies did not pan out at Exxon and Chevron, where 60% of the investors who had supported climate disclosure resolutions at other companies reversed course to align with Exxon and Chevron management. The Paris buzz was officially killed but our Missing60 campaign was born. In an article published by Responsible Investor, signatories to our campaign explained why they joined our call to hold the Missing60 to account. Once the votes were made public, a second article did just that—forcing large asset managers to publicly explain their reasons for voting against resolutions that require disclosure of risk in a 2°C world. We also interviewed investors who voted in the minority, giving voice to those taking up the mantle of forceful stewardship. As the year progressed, we engaged several large asset managers in informal discussions, turning the soil to prepare for a better yield in 2017.

The April online dialogue also led to a roundtable focusing on systemic risk that was hosted by Mercer and Oliver Wyman in London in May. The roundtable discussion produced a working document on systemic risk that we use to persuade institutional investors of the pervasiveness and unpredictability of climate-related portfolio risk. This article includes a link to the systemic risk working paper and a video in which some of the roundtable participants shared their thoughts.

Preventable Surprises works with “positive mavericks” who seek change within a wide spectrum of organisations where they are employed. Following the spring AGM season, we surveyed 700 mavericks with the outcome that the utility sector emerged as the top priority for 2017. In September we hosted our fourth online dialogue, in which 60 participants coalesced around the need for shareholder resolutions that require utilities to develop transition plans for a low-carbon economy. Such plans would provide companies with roadmaps for complying with the Paris Agreement, which requires reductions in greenhouse gas emissions in line with global warming of no more than 2°Celsius. An executive summary of the dialogue is available, as is an article spelling out our thinking on why utilities merit an intense focus by those seeking to keep carbon in the ground.

Preventable Surprises Chair Carolyn Hayman spent the final months of the year developing technical guidance for those advocating for transition plans at utilities. She spoke with scores of experts in the sector (academics, analysts, utility executives) to draft guidance that is sufficiently ambitious to the task at hand, while also being realistic. As the year closed, she vetted the document with a range of experts to test its effectiveness as a guide both for utility executives and investors who are forceful stewards of their clients’ funds.

At the same time, Preventable Surprises CEO Raj Thamotheram and Senior Advisor Tom Murtha spoke with potential co-filers of resolutions seeking transition plans at utilities. Deadlines arrive early for such resolutions, requiring ongoing dialogue to get resolutions on the ballot. We also are discussing creative ways to promote a 2°C-compliant economy in markets where shareholder activism isn’t an option, particularly in emerging markets. Allies at the World Wildlife Fund have been particularly helpful in this regard.

Our year included dozens of other events, opinion pieces, and networking meetings where we promoted our beliefs on systemic risk, forceful stewardship, and AGM strategies. As an organisation that is not dependent financially on corporate support or consultancy income, we often find we can push for more ambitious goals than the incrementalist approaches that fall short of the task assigned by COP21. We put together a list of some of the events we organised or participated in during the year.

We closed the year proud of our efforts throughout 2016 to realise the promise of Paris and disappointed that so many companies have ignored the implications of this promise. We will continue tilling the soil until we and all the other organisations working with us reap the rewards of our efforts to protect humans and other species from the worst effects of climate change.


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