FirstEnergy: Request for Report on Carbon Emission Reduction Goals
Pollution from coal fired power plants is a significant cause of climate change and negative health effects, and contributes disproportionately to U.S. emissions: “coal accounts for about 75% of carbon dioxide emissions from the [electric power] sector...” (Environmental Protection Agency, 2014)
FirstEnergy’s power mix is 57% coal, resulting in the 3rd most coal burned and 6th highest carbon emissions of U.S. electric power producers. (Ceres, “Benchmarking Air Emissions”, 2014) FirstEnergy also owns 4 of the top 100 most polluting power plants in the U.S. (Environment America, “America’s Dirtiest Power Plants”, 2014)
FirstEnergy is an industry laggard, ranking in the lowest 25% of its peers on renewable energy sales and energy efficiency investment. (Ceres, “Benchmarking Utility Clean Energy Deployment”, 2014).
Underscoring FirstEnergy’s backsliding, FirstEnergy voluntarily eliminated most of its energy efficiency programs, and is now seeking approval to commit the company to years of more coal power at its Sammis and Ohio Valley Electric Corporation plants. (Institute for Energy Economics and Financial Analysis, “FirstEnergy: A Major Utility Seeks a Subsidized Turnaround”, 2014) Similarly, media reports indicate that FirstEnergy was significant in lobbying for Ohio’s renewable portfolio standards moratorium.
A report from the Carbon Disclosure Project (CDP) found that companies with robust climate change management and reporting had an 18% higher return-on-equity, 50% lower earnings volatility, and 21% stronger dividend growth than companies with limited carbon disclosure. (“Climate Action and Profitability: CDP [Standard & Poors] S&P 500 Climate Change Report”, 2014).
A study of companies in the S&P 500 found that “Setting a clear and ambitious carbon reduction target can trigger a cascade of positive results. A target provides an important internal signal of a company’s commitment to doing its part. Companies that set ambitious carbon reduction targets deliver larger emission reductions with higher financial returns than companies without such targets.” (CDP, the 3% Solution, 2013)
Recently NRG, a similar company as FirstEnergy, announced plans to cut 90% of the company’s carbon emissions by 2050. NRG’s CEO said that “The power industry is the biggest part of the problem of greenhouse gas emissions, but it has the potential to be an even bigger part of the solution.”
Shareholders want FirstEnergy to adopt carbon reduction targets to better align its business with global emissions targets, and the long term best interests of FirstEnergy’s shareholders and stakeholders.
Shareholders request that FirstEnergy create specific, quantitative, time bound carbon dioxide reduction goals to decrease the company’s corporate carbon dioxide emissions, and report by September 2015 on its plans to meet the carbon reduction goals the company adopts.