2011 Shareholder Resolution
Company: SCANA Corporation
Topic: Sustainability Reporting

WHEREAS:

We believe that sustainability reporting on environmental, social and governance (ESG) business practices makes companies more responsive to the global business environment; an environment with finite natural resources, evolving legislation, and greater public expectations of responsible corporate behavior. Reporting also helps companies better integrate and gain strategic value from existing corporate social responsibility efforts, identify gaps and opportunities, develop company-wide communications, publicize innovative practices and receive feedback.

Sustainability reporting is quickly becoming common practice. Of the 100 top U.S. companies by revenue, 73% produce sustainability reports (KPMG, 2008). Increasingly, companies are identifying ESG factors relevant to their business, addressing them strategically through sustainability programs and reports, and describing their positioning as good long-term investments.

Transparency regarding climate change strategy is particularly crucial. The U.S. SEC recently issued interpretive guidance illuminating corporate disclosure requirements of material business and legal developments related to climate change.

The U.S. electric power industry accounts for 41 percent of the country’s freshwater withdrawals. U.S. regulations limit the temperature of water discharged by power plants in order to minimize damage to aquatic species. Therefore, higher water temperatures pose regulatory risks for electric utilities. During a heat wave in August 2010, three Tennessee Valley Authority facilities were forced to decrease power generation for two weeks, costing the utility an estimated $10 million in lost power production (Fleissner, 2010).

Additionally, emerging EPA regulations may require capital expenditures to retrofit power plant cooling systems. The EPA is also considering regulating coal combustion waste destined for land disposal as hazardous under RCRA Subtitle C and/or regulating the structural integrity of coal ash surface impoundments through NPDES wastewater discharge permits.

Despite the concerns listed above, SCANA Corporation has not prepared a sustainability report and provides limited information on sustainability efforts via the company website and annual report/10k.

RESOLVED:

Shareholders request that the Board of Directors issue a sustainability report describing the company’s short- and long-term responses to ESG-related issues, including plans to manage greenhouse gas (GHG) emissions, disclosure of material water risks and plans to mitigate those risks. This report should also include a company-wide review of policies, practices, and metrics related to ESG issues, be prepared at reasonable cost, omit proprietary information, and be issued within 6 months of the 2011 annual meeting.

SUPPORTING STATEMENT:

We recommend use of the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines to prepare the report. The guidelines provide guidance on report content, including environmental impact, labor practices, human rights, and product responsibility; omission of content not relevant to company operations is permissible.

We also suggest the report describe water risks related to increased competition for water resources, emerging regulation, and changing climatic conditions. Material information should include:

  • Water intensity of generation
  • Water sources and cooling systems for each facility
  • Water rights of major facilities
  • Any water-related shutdowns or reductions in generation
  • Proposed regulations that would require retrofitting of cooling systems

Utility disclosures should incorporate exposures in wholly- and jointly-owned facilities, as well as in power purchase agreements.


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