Funds avoid warming

NEW YORK – Investors pressing companies to say more about the possible financial effects of global warming haven’t found an ally in large mutual funds.

While global climate change appears to be drawing more attention in the United States from lawmakers and businesses, no large mutual fund companies voted in 2006 to support shareholder resolutions seeking added disclosures about the possible financial effects of global warming.

The 28 investment houses that run the country’s 100 largest mutual funds either abstained from or opposed the handful of resolutions that reached a vote last year, according to data compiled by Institutional Shareholder Services for Ceres, a Boston-based environmental investment group.

“Most mutual funds tend to wall off social and environmental resolutions as a separate category from governance resolutions. On the social and environmental side they tend to show more deference to management’s actions and policies than they do on the governance side,” said Doug Cogan, director of climate change research at ISS, a proxy adviser.

Cogan contends U.S. companies operating overseas and even those only in business domestically face increasing environmental regulation, such as caps on greenhouse gas emissions. Such changes could increase costs for power companies and automakers, for example. On the other hand, warmer weather could extend growing seasons for agricultural companies.

“It’s truly a business issue that will have financial impacts,” he said.

The study found investors filed 30 climate-related resolutions last year and that seven of those proceeded to shareholder votes.

On average, the resolutions put to a vote drew support from 17 percent of shareholders, the study found. In some instances, the “yes” votes were much higher; at home builder Standard Pacific Corp., 39 percent of shareholders voted for added disclosures.

Ceres spokesman Peyton Flemming said at companies such as Alliant Energy Corp. and Great Plains Energy Inc., shareholders last year withdrew resolutions after the companies agreed to disclose their potential financial exposure to climate change.

Cogan said about half of such shareholder resolutions are typically withdrawn before they come to a vote because companies agree to provide data investors are seeking, Cogan said.

Large mutual fund companies typically don’t wade into environmental issues. It appears many would consider it, however, if it they determined such concerns would have a sizable effect on a company’s business.

“Our mutual funds are managed with one overriding goal, which is to provide the greatest possible return to mutual fund shareholders,” said Vin Loporchio, spokesman at Fidelity Investments, the nation’s largest fund manger.

“If it is shown that an environmental risk poses a real and material risk to a company’s future earnings, that could well be taken into account,” he said.