March 14, 2016
Following the submission of a shareholder proposal by the Nathan Cummings Foundation, Duke Energy has agreed to expand its sustainability report to include a discussion of its plans for responding to the potential challenges posed by slower load growth and increases in distributed generation. Duke will also include links to information on various scenarios used in its planning process, including variations in carbon costs and the adoption of energy efficiency measures.
Long-term investors are interested in this information because of the growing recognition that solar power and energy storage technologies could be disruptive to utilities like Duke. Utilities that are proactive will limit their downside exposure to disruptive technologies and may even stand to benefit from changes in the industry. Those that aren’t may be left behind. Navigant Research, for instance, recently warned that, “Energy providers that fail to adapt to new technologies may find their customer base migrating to alternative solutions.”
As You Sow, Pax World Management LLC, and Praxis Mutual Funds joined the Foundation in filing the proposal. The proponents of the proposal view the commitments as a step in the right direction for Duke. Though questions remain about the Company’s construction of long-lived natural gas plants in the post-COP 21 era, the expanded reporting should help investors and other concerned stakeholders to get a better handle on the company’s plans for addressing the risks and opportunities its business faces as a result of climate change.
“As long-term investors, we appreciate Duke Energy’s willingness to spend time speaking with us about the issues raised in our proposal. Our conversations with the Company were really constructive and resulted in a positive step forward for which Duke Energy should be congratulated,” said Laura Campos, director of shareholder activities at the Nathan Cummings Foundation. “We’re looking forward to continuing our conversation with the Company once the new reporting is released.”