DowDupont: Report on Petrochemical Resiliency Risks
BE IT RESOLVED: Shareholders request that DowDuPont, with board oversight, publish a report on climate change-induced flooding and public health, omitting proprietary information and prepared at reasonable cost. The report should assess the public health risks of petrochemical operations and investments in areas increasingly prone to climate change-induced storms, flooding, and sea level rise and the adequacy of measures the company is employing to prevent public health impacts from resultant chemical releases.
WHEREAS: Investors are concerned about the financial, health, environmental, regulatory, and reputational risks associated with operating and building-out new chemical plants and related infrastructure in Gulf Coast locations that are increasingly prone to catastrophic storms and flooding associated with climate change. Civil society groups have mobilized to oppose the expansion of petrochemical facilities in their communities due to concerns regarding direct impacts to their health and livelihoods. Such opposition threatens to jeopardize DowDuPont’s social license to operate in the region.
Petrochemical facilities like ethane crackers and polyethylene processing plants produce dangerous pollutants including benzene (a known carcinogen), Volatile Organic Compounds, and sulfur dioxide. These operations can become inundated and pose severe chemical release risks during extreme weather events. Flooding from Hurricane Harvey in 2017 resulted in DowDuPont plant shut downs and the release of unpermitted, unsafe levels of pollutants. Nearby Houston residents reported respiratory and skin problems following Dow’s releases during Hurricane Harvey.
Growing storms and the costs they bring our company are predicted to increase in frequency and intensity as global warming escalates. Flood-related damage is projected to be highest in Texas, where many of DowDuPont’s petrochemical plants are concentrated. Houston alone has seen three 500-year floods in the span of three years, and Hurricane Harvey reduced DowDuPont’s 2017 third quarter earnings by 250 million dollars. Sea level rise poses particularly significant risks to DowDuPont’s current and planned activities in Louisiana, where land loss from rising seas is a serious, growing issue.
Historically, DowDupont has paid out millions in settlements with the Environmental Protection Agency and Department of Justice for violation of various clean air and water laws. As floods and storms intensify, they may bring additional unplanned chemical releases. Investors are concerned that DowDupont has not demonstrated how it will prevent such unsafe chemical releases and associated financial damages.
In spite of these growing risks, DowDuPont has dramatically accelerated its petrochemical activity in the Gulf Coast. The Company’s plans to invest heavily in further expansion in flood-prone areas of Texas and Louisiana increase risks to its physical assets and associated health harms to local communities from leaks, spills, and damages exacerbated by increasingly severe storms and flooding. While the company has disclosed that risks from storms may impact its business, and that it is undertaking engineering and emergency planning and “continues to study” storm preparedness, available disclosures do not provide investors sufficient information to understand whether DowDuPont is effectively managing the material public health and financial risks presented by climate-induced storm impacts and sea level rise.