Greenhouse Gas Reduction - Science-Based Targets

2016 – PNM Resources

RESOLVED: Shareholders request Public Service Company of New Mexico (PNM) adopt time-bound, quantitative, company-wide goals for reducing total greenhouse gas (GHG) emissions, taking into consideration the recommendations of the most recent Intergovernmental Panel on Climate Change (IPCC), and issue a report by September 1, 2016, updated annually, at reasonable cost and omitting proprietary information, on its plans to achieve these goals.

Supporting Statement: The IPCC, the world's leading scientific authority on climate change, in its 2013 report confirmed that warming of the climate is unequivocal and human influence is the dominant cause. Many investors are deeply concerned about the effects of climate change on society and business.

In May 2011, a National Academy of Sciences report emphasized that "the sooner that serious efforts to reduce greenhouse gas emissions proceed, the lower the risks . . . and the less pressure there will be to make larger, more rapid, and potentially more expensive reductions later."

In order to mitigate the worst impacts of climate change, the IPCC estimates that a 55% reduction in GHG emissions globally is needed by 2050 (relative to 2010 levels) entailing a US target reduction of 80%.

The costs of failing to address climate change are significant. "Dangerous Inheritance," a report released by Environment New Mexico Research and Policy Center, found "that the warming that has occurred over the past four decades has increased the risk of severe storms, heat-related illness, floods, drought, crop failure, wildfires and infrastructure damage." These and other effects could substantially impact PNM’s business operations. 

Investor advisory groups track company performance with respect to environmental and social indicators, and a negative report can have an adverse impact on investors. MSCI Inc. (a leading US-based provider of equity market indexes and environmental, social and governance research) in its 2014 report stated that “[PNM] lags in setting aggressive targets to reduce adverse impacts on the environment, such as Greenhouse Gas (GHG) emissions" and that "The company's business activities and the geographic distribution of its revenues suggest relatively high exposure to increased costs linked to carbon pricing or regulatory caps."

Setting GHG emission targets is widespread among US companies and can have positive financial outcomes. A report published by the World Wildlife Fund (WWF), Carbon Disclosure Project (CDP), and McKinsey and Company found that companies with GHG targets achieved an average of 9% better return on investment than companies without targets. CDP, supported by global investors with over $90

Trillion in assets under management, gathers reports from thousands of companies disclosing their carbon emission and reduction plans. 

Public Service Company of New Mexico will in the near future be required to respond to new EPA guidelines for carbon emission reduction.  However, we believe that the company, and its shareholders, will be best served by a comprehensive, proactive, and public plan for GHG reduction in addition to compliance with anticipated regulations.