Shareholders Urge Southern Company to Come Clean on Coal Ash
May 24, 2011 – At Southern Company’s (Southern)* annual meeting Wednesday in Callaway Gardens, Georgia, shareholders will vote on a proposal asking the company to report on its efforts to reduce the environmental and health hazards of coal ash stored in ponds, landfills and mines. The proposal was filed by Green Century Capital Management (Green Century), the investment advisor to two environmentally responsible mutual funds, the Green Century Balanced Fund and the Green Century Equity Fund.
Burning coal has significant environmental externalities that carry financial and regulatory risks. Each year, coal combustion leads to the creation of over 130 million tons of coal ash, which is a byproduct that contains arsenic, mercury, lead, and other toxins. Coal ash management can expose utilities to significant environmental, financial and regulatory risk. Green Century contends Southern has failed to provide investors with sufficient information on how it is addressing or mitigating coal ash-related risks, particularly the potential for water contamination, in its SEC filings, on its website, or in other public documents.
“Southern Company produces nearly 5 million tons of coal ash each year and operates over 20 coal ash storage facilities, but fails to provide investors sufficient information about how it prevents harmful environmental impacts and mitigates coal ash-related risks,” said Larisa Ruoff, Director of Shareholder Advocacy for Green Century.
The health, environmental, and financial risks of managing coal ash came to light in December 2008 when a dam holding back a 1.1 billion gallon coal ash pond belonging to the Tennessee Valley Authority (TVA) burst and covered over 300 acres with toxic sludge. TVA has estimated spill-related costs at $1.2 billion and has been the target of over 50 lawsuits since the spill. In the wake of this disaster, many shareholders are pressing utilities to come clean about how they manage the coal ash produced by their power plants.
“Southern needs to report to investors on the company’s efforts, above and beyond current compliance, to reduce environmental and health hazards associated with coal combustion waste, and how those efforts may reduce legal, reputational and other risks to the company’s finances and operations,” continued Ruoff. “Without transparency, investors have no way of determining whether Southern is appropriately managing the risks associated with coal ash.”
Last year, the company faced a similar proposal from investors and over 20 percent of shares voted supported the resolution.** Last month, shareholders in Ameren Corporation* voted on a similar proposal where over half of the shares voted supported the resolution and just last week 36 percent of shareholders at FirstEnergy* supported a resolution calling for increased transparency and accountability. **
Green Century Capital Management is an investment advisory firm focused on environmentally responsible investing. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century's mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. Green Century believes that shareholder advocacy is a critical component of responsible investing and actively advocates for greater corporate environmental accountability.
*Neither the Green Century Balanced Fund nor the Green Century Equity Fund held Southern Company, Ameren Corporation, or FirstEnergy Corporation as of March 31, 2011. Please refer to the Green Century Funds website for current information regarding the Funds' portfolio holdings. These holdings are subject to risk as described in the Funds' prospectus. References to specific investments should not be construed as a recommendation of the securities by the Funds, their administrator, or their distributor.
** The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation.
You should consider the Funds' investment objectives, risks, charges, and expenses carefully before investing. To obtain a Summary Prospectus and/or Prospectus that contains this and other information about the Funds, please click here, email info@greencentury.com, or call 1-800-93-GREEN. Please read the Summary Prospectus and/or Prospectus carefully before investing.
The Green Century Funds are distributed by UMB Distribution Services, LLC. 5/11
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