Investors Seek SEC Scrutiny Of Biomass Energy Claims By Dominion Resources,
Southern Co. And Covanta
AMHERST, Mass., Nov. 20, 2013
Investors With $100 Billion in Assets Complain to SEC of Misleading and
Incomplete Statements About Climate Benefits, Carbon Neutrality, and Risk of
AMHERST, Mass., Nov. 20, 2013 /PRNewswire/ -- A group of investors is urging
the U.S. Securities and Exchange Commission (SEC) to review filings by three
leading U.S. companies – Dominion Resources, Inc. (D), Southern Company (SO),
and Covanta Holding Corp. (CVA) – for misleading statements about the benefits
of biomass energy and failing to disclose key information about environmental
impacts, expected regulations, and financial risks. The 15 investors –
including Domini Funds, Boston Common Asset Management, Green Century
Investments, and several faith-based institutions – represent more than $100
billion in assets under management.
Dominion, Southern, and Covanta are publicly traded companies that operate
wood-burning biomass power plants in the U.S. The nonprofit Partnership for
Policy Integrity (PFPI) reviewed corporate disclosures by the three companies
to determine whether disclosures regarding environmental and investment risks
associated with biomass energy complied with SEC disclosure requirements,
including guidelines provided by the SEC Climate Guidance issued in 2010. The
findings are summarized in a report submitted today to the SEC, accompanied by
the letter from investment groups requesting SEC analysis. The investor
letter and PFPI report are available online at
The investors' letter to the SEC states: "[T]he industry appears to have
failed to live up to its obligations for accurate and nonmisleading disclosure
… Bioenergy should be required by the SEC to compete for investment dollars
without materially exaggerating its value to the environment, or concealing
its weaknesses and uncertainties." The letter requests that the SEC clarify
what companies are allowed to claim in relation to the climate benefits and
"carbon neutrality" of biomass energy.
"Burning wood in power plants emits more greenhouse gases than fossil fuels on
a day to day basis, as well as air pollutants that degrade air quality and
threaten health," said Mary Booth, PhD, director of PFPI. "Companies that
present bioenergy as 'clean' and 'carbon neutral' are likely to be misleading
investors, because bioenergy carbon neutrality, if it occurs at all, may only
occur years to decades into the future."
Leslie Samuelson, president of Green Century Investments, one of the
investment firms sending the letter, said: "For those of us who actively
invest in renewable energy, it is essential to have a honest disclosure of the
relative climate benefits of biomass energy compared to wind and solar
energy. The SEC needs to take action here to compel nonmisleading disclosure
by biomass companies that provides clear guidance as to what constitutes clean
and low-carbon renewable energy."
Dominion, Southern, and Covanta have presented biomass energy as a key
strategy for reducing greenhouse gas emissions from the power sector.
Emerging wood demand by the companies is several million tons a year. Burning
a ton of wood emits about one ton of carbon dioxide, along with "conventional"
air pollutants including particulate matter, nitrogen oxides (smog precursors)
and carbon monoxide.
The PFPI report identifies key concerns about how companies have characterized
biomass energy to investors:
oThe "clean energy" fallacy. Companies represent their wood-burning power
plants as "clean" and "carbon neutral", even though their day-to-day
operations emit greater quantities of carbon dioxide and as much or more
of key air pollutants as coal and gas plants, per megawatt-hour. The idea
that bioenergy should be treated as carbon neutral rests on unproven
assumptions that are usually out of the control of bioenergy companies,
such as the idea that forests will be allowed to regrow for decades to
neutralize carbon dioxide emitted by burning.
oUnderstatement of regulatory and financial risks. Greenhouse gas emissions
from biomass energy are likely to become subject to new regulations. The
Environmental Protection Agency is currently determining how to account
for bioenergy emissions under the Clean Air Act, and has indicated that
facilities burning wood can be large sources of carbon dioxide. States are
also beginning to eliminate renewable energy subsidies for large-scale
biomass energy, as greenhouse gas emissions from wood-burning are
increasingly recognized. Dominion, Southern and Covanta are in some cases
directly impacted by new policies and regulations, and have asserted to
state and federal regulators that new regulations could make bioenergy
uneconomical, but they have not disclosed these concerns to the SEC and
The Securities Exchange Act requires publicly traded companies to disclose
certain information to assist investors in making informed investment
decisions. The SEC formally recognized the importance of climate
change-related information in its 2010 Climate Guidance. The Guidance explains
that the physical effects of global climate change, and the legislation,
regulations and policies developed to address it, could all have a material
effect on companies.
The 15 investors signing on to the letter to the SEC are:
oShelley Alpern, director of Social Research & Advocacy, Clean Yield
Investments (Norwich, VT);
oRuth McElroy Amundsen, private shareholder (Norfolk, VA);
oLaura Berry, executive director, Interfaith Center on Corporate
Responsibility (New York, NY);
oSally Ann Brickner, OSF, Justice, Peace, and Ecology coordinator,
Congregation of Sisters of St. Agnes (Fond du Lac, WI);
oPatricia A. Daly, OP, executive director, Tri-State Coalition for
Responsible Investment (Montclair, NJ);
oMarion Edey, private shareholder (Silver Spring, MD);
oDanielle Fugere, president, As You Sow Foundation (Oakland, CA);
oJohn Harrington, president, Harrington Investments (Napa, CA);
oSteven Heim, managing director, Boston Common Asset Management, LLC
oAdam Kanzer, Domini Funds (New York, NY);
oNora Nash, OSF, director of Corporate Social Responsibility, Sisters of
St. Francis of Philadelphia (Aston, PA);
oJeffrey W. Perkins, executive director, Friends Fiduciary Corporation
oJoy Peterson, PBVM, promoter of Peace and Justice, Sinsinawa Dominican
Sisters (Sinsinawa, WI)
oLeslie Samuelrich, president, Green Century Investments (Boston, MA); and
oStephen Viederman, chair of Finance Committee, Christopher Reynolds
Foundation (Boston, MA).
The Partnership for Policy Integrity (PFPI) provides science and legal support
so that citizen groups, environmental organizations, and policymakers can
better understand energy development impacts on air quality, ecosystems, and
the climate. Go to www.pfpi.net on the Web.
MEDIA CONTACT: Ailis Aaron Wolf, (703) 276-3265 or firstname.lastname@example.org.
EDITOR'S NOTE: The investor letter to the SEC and the related PFPI report
will be available as of 11 a.m. EST on November 20, 2013. To get a copies of
these documents, contact Ailis Aaron Wolf, (703) 276-3265 or
SOURCE Partnership for Policy Integrity, Amherst, Mass.
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