Sempra shareholders vote down Paris climate proposal

A proposal by a group of Sempra Energy stockholders calling for the San Diego-based Fortune 500 company to issue a report detailing how Sempra’s assets and lobbying activities align with the international Paris treaty on climate change was turned down at the company’s annual shareholders meeting Friday.

But the proposal’s backers were heartened by the fact that it received 37.47 percent support, according to a count of preliminary votes.

“This proposal underscores shareholder concern about anti-climate lobbying activities, whether done directly by a company or by its trade association,” said Lila Holzman, senior energy program manager of As You Sow, a nonprofit that represented investors who put forth the proposal. “Shareholders want companies to ensure their lobbying is aligned with Paris goals.”

Sempra’s board of directors recommended that shareholders vote against the proposal, saying the company already provides sufficient information about sustainability, making the item “duplicative and unnecessary.”

In the runup to Friday’s meeting, the board pointed to Sempra’s 95.7 score out of a possible 100 on the CPA-Zicklin Index that measures political disclosures and accountability.

“We take pride in the fact that our infrastructure is playing a crucial role in advancing the global energy transition by enabling the delivery of lower-carbon energy solutions in every market we serve,” a Sempra spokesperson said in an email after the vote.

At the same time company shareholders were holding their virtual meeting, about 100 demonstrators from local environmental groups staged a protest in front of Sempra’s corporate headquarters downtown.

“Sempra’s business model is inherently at odds with a sustainable, equitable future,” said Masada Disenhouse, executive director of SanDiego350. “Their doubling down on a business model built on methane gas is incompatible,” she said, with the Paris climate accord, which calls for limiting global temperature rise to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels.

Sempra’s subsidiaries include San Diego Gas & Electric and Southern California Gas, which deliver natural gas to commercial and residential customers, and Sempra LNG, a major player in the exporting of liquefied natural gas overseas.

Investors backing the proposal included Calvert Research and Management, a financial firm specializing in Environmental, Social and Governance investments; the Putney School, a boarding school in Vermont that promotes “progressive education for a sustainable future;” and the Illinois State Treasurer’s Office, representing a college savings trust in that state.

“While peer utilities are setting enterprise-wide climate ambitions and plans, Sempra is challenging California’s policies to reduce greenhouse gas emissions through increased electrification, among others,” Kimberly Stokes of Calvert Research and Management, said in a statement. “Over time, this misalignment with climate goals could increase regulatory risk and negatively impact financial performance.”

At Sempra’s first quarter earnings call with financial and utility analysts earlier this month, Sempra CEO Jeff Martin said natural gas helps with the transition to a greener power system in California.

“That’s only possible because you’ve made those investments in a resilient grid, backed up by batteries and you’ve got all the peaking and necessary load support from your natural gas side,” Martin said.

SDG&E and SoCalGas recently announced plans to achieve net-zero greenhouse emissions by 2045, though some stakeholders voiced skepticism of the pledges.