Two regional economic powerhouses with deep roots in South Carolina are facing withering criticism from environmental watchdogs for allegedly providing “misleading” information to investors as it relates to their advocacy on behalf of climate policy.
According to a new report from the Energy and Policy Institute, Charlotte-based Duke Energy and Atlanta-based Southern Company are both “making gestures to disclose more information about their advocacy with regard to climate policy.”
However, the report concluded these disclosures were “incomplete and misleading in significant ways.”
Sound familiar? This news outlet has previously reported on the extent to which Duke is unlikely to make good on its pledge to be completely “carbon neutral” by 2050. Well … not without incurring significant stranded fossil fuel costs that will ultimately be passed on to its ratepayers.
Duke’s fundamental problem? Its energy mix is excessively reliant on coal – which means the company has become excessively reliant on the use of natural gas as a “bridge” fuel in transitioning to renewable energy sources. Accordingly, Duke is in the process of constructing significant new natural gas infrastructure – even though its decarbonization promises would substantially reduce the shelf life of these assets.
Investors are eyeing this transition closely – and suspiciously. Last month, Duke was slapped with a downgrade from Bank of America owing to its “stranded carbon” assets.
Now, Duke and Southern are being accused of materially misrepresenting their environmental advocacy to green-minded investors.
“Duke and Southern do not appear to be providing adequate information for the investors to gauge their climate policy advocacy,” the new report found. “Neither company is offering detailed information about its own policy advocacy activities, particularly with regard to efforts to influence the decisions of state legislators and regulators.”
Furthermore, the report concluded “both companies appear to be greenwashing the activities of their trade associations, relying on vague statements about climate change that belie the lobby groups’ actual activities.”
“Greenwashing” is a term adopted by environmentalists to describe corporate campaigns that create a false impression of eco-friendliness.
“The information provided by Duke and Southern in their latest disclosures offer vague, general support of climate action, but no specifics about advocacy for or against actual policies for … investors to evaluate,” the report noted.
Duke issued its latest disclosure in response to a challenge from Mercy Investment Services, a ministry of the Sisters of Mercy of the Americas. According to its website, the group “embraces socially responsible investing as a means of promoting systemic change to respond to the critical needs of the time.”
Such investors are not afraid to dump stocks on principle, either.
Last fall, Storebrand – a Norwegian fund with $91 billion worth of assets under management – divested itself of Southern’s stock owing to the company’s alleged “advocacy against climate policies.”
Southern has spent a total of $140 million lobbying the federal government since 2010 – the most of any utility in the nation.
This news outlet’s founding editor Will Folks has consistently praised natural gas as a “bridge fuel.” As recently as last summer, he wrote that America’s natural gas boom remained our nation’s “best hope to continue reducing carbon emissions as renewable sources continue to develop.”
In 2019, the United States emitted an estimated 5.13 million metric tons of energy-related carbon dioxide (CO2). That was the lowest level on record since 1992 and a 14.5 percent decline from its 2007 peak, according to data from the U.S. Energy Information Administration (EIA).
Meanwhile, a February 2020 report from the International Energy Agency (IEA) found that the United States “saw the largest decline in energy-related CO2 emissions in 2019? as well as “the largest absolute decline by any country” since 2000.
Oh, and the shutdowns related to the coronavirus pandemic will further drive down those numbers.
Ultimately, though, the transition from coal to natural gas has been the real reason for CO2 emissions declines – although as one renewable energy advocate recently explained to us, “bridges” must eventually reach the proverbial “other side.” Meaning renewables must eventually supplant natural gas (and replace coal).
How much of the natural gas “bridge” is left to be traversed? That is the question policymakers and investors must answer …
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