Activist Investors Gear Up for 2013 Proxy Season: Freeport-McMoRan Copper & Gold Inc. (FCX), TECO Energy, Inc. (TE), Molycorp Inc (MCP)

The most successful of 2012’s board-related proposals were those that the New York State Common Retirement Fund, or NYSCRF, initiated requesting that companies add an environmental expert to the board. The highest vote – 31% – was for the resolution filed at Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), the giant mining company with operations in Indonesia and war-torn Democratic Republic of Congo. In 2011, workers demanding higher pay at an Indonesian mine launched protracted strikes that hurt the company’s business. The mine in question had long faced a volatile mix of environmental and human rights challenges in a sensitive and remote province of Indonesia. The NYSCRF has refilled its resolution for 2013.

Apple Inc. (NASDAQ:AAPL) is no stranger to sustainability-related shareholder resolutions. The NYSCRF withdrew one resolution this year after Apple agreed to pursue sustainability reporting from its suppliers. Trillium Asset Management withdrew another resolution asking Apple to report on how its board oversees privacy and data security risks after the company agreed to amend its charter to add responsibilities for the legal, regulatory, and reputational risk issues that the resolution raised. A third resolution from Harrington Investments, urging Apple to establish a board committee on human rights, went to vote on Feb. 27, garnering 5.6% of votes.

The NYSCRF filed a resolution with TECO Energy, Inc. (NYSE:TE) asking that TECO report on “(1) the conditions resulting from the company’s mountaintop removal operations that could lead to environmental and public health harms and (2) feasible, effective measures to mitigate the harms associated with mountaintop removal mining.” TECO Energy, Inc.(NYSE:TE) hallenged the proposal at the SEC, arguing that it had already been substantially implemented. The SEC agreed and allowed the company to omit the proposal, saying that “it appears that TECO Energy’s public disclosures compare favorably with the guidelines of the proposal and that TECO Energy, Inc.(NYSE:TE) Energy has, therefore, substantially implemented the proposal.”

Shareholder activism is here to stay
Shareholder activism on ESG issues keeps growing, and it will be harder and harder for companies to ignore. Managers that successfully prevent such resolutions with strong ESG practices will be able to spend time running their businesses instead of fending off shareholders. That sounds like a good long-term strategy to me.

The article Activist Investors Gear Up for 2013 Proxy Season originally appeared on Fool.com and is written by Sara E. Murphy.

Sara E. Murphy has no position in any stocks mentioned. You can follow her on Twitter @SMurphSmiles. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Freeport-McMoRan Copper & Gold.

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