B12 Solipsism

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Apple Response To National Center for Public Policy Research Re Climate Change

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Apple Store with Tree
Apple Store with Tree

From Apple, Inc.’s 2015 Proxy Statement is this proposal from conservative think tank, The National Center for Public Policy Research. We’re quoting the proposal, and Apple’s response to it (which boils down to a long-winded no, are you crazy?, for many reasons). This think tank exists mostly for the task of “dispelling the myths of global warming by exposing flawed economic, scientific, and risk analysis”, and to publicly scold corporations that drop support for ALEC, so you can imagine why they are pressuring Apple. For the lolz, of course. And to support their corporate masters…

On page 62 of the Proxy Statement:

Proposal No. 5 – Shareholder Proposal The Company has been advised that The National Center for Public Policy Research, 501 Capitol Court, N.E., Suite 200, Washington, D.C 20002 (the “NCPPR”), which has indicated it is a beneficial owner of at least $2,000 in market value of the Company’s common stock, intends to submit the following proposal at the Annual Meeting: Risk Report

and the proposal:

WHEREAS, The Securities and Exchange Commission has recognized that climate change regulations, policy and legislation pose a business risk to companies. One risk is that federal, state and/or local government policies, adopted in whole or in part due to climate change concerns, that subsidize renewable energy and upon which company business plans rely may be repealed or altered. These changes in policy may be significant, and may come with little advance notice to the company.

RESOLVED: Shareholders request that the Board of Directors authorize the preparation of a report, to be issued by December 2015, at a reasonable cost and excluding proprietary information, disclosing the risk to the company posed by possible changes in federal, state or local government policies in the United States relating to climate change and/or renewable energy.

concluding with

Apple Inc. has made renewable energy a priority. The Wall Street Journal reported on September 17, 2013, “Apple Inc. now gets 16% of its electricity from solar panels and fuel cells that run on biogas.” One state in which Apple has significant renewable energy investments is North Carolina, which may soon repeal its law providing advantages for renewable energy production, following a report by two think-tanks concluding that this law will cost state consumers $1.845 billion between 2008 and 2021. Subsidies and policies favorable to renewable energy also are being challenged in other states and also at the federal level, where renewal of the approximately $12 billion wind production tax credit (PTC) is challenged annually and in the past has only been renewed at the very last minute, following closed-door negotiations by lawmakers. The PTC’s future is impossible to predict. 

Apple Logos
Apple Logos

Apple’s response:

The Company’s Statement in Opposition to Proposal No. 5 The Board recommends a vote AGAINST Proposal No. 5. This proposal would result in the production of a narrowly focused report that would yield an incomplete and therefore inaccurate analysis of the Company’s exposure to risks associated with changes in government policies with respect to climate change and renewable energy. In effect, the proponent is asking the Company to spend valuable time and limited resources analyzing hypothetical changes in U.S. federal, state or local governmental policies. The Company has already presented an analysis of the risks and opportunities associated with climate change on its website at www.apple.com/environment/climate- change and in its public filings with the SEC, as well as in a shareholder-requested and industry- recognized reporting tool, the CDP questionnaire.

and continues:

The additional report would therefore provide little to no additional value. As explained on its website, the Company believes climate change caused by emissions from burning fossil fuels is a real problem, and has committed to reducing the Company’s carbon footprint.

The Company also provides detailed information on its renewable energy and sustainability efforts in its annual Environmental Responsibility Report, available online at www.apple.com/environment/reports.
In 2014, the Company also provided detailed responses to the CDP questionnaire. Those responses, requested by shareholders, outline the Company’s views on the risks and opportunities of dealing with climate change. The report requested by the proponent would focus on one domestic aspect of climate change potential risk.

This approach distorts the global realities of climate change risk for the Company and its shareholders. The Company continually evaluates its reliance on both traditional and alternative energy sources and regularly makes decisions to mitigate the Company’s exposure to potential price increases, supply shortages and changes to federal, state and local government policies related to the environment. The Company’s public filings and reports already provide substantial disclosure regarding the Company’s approach to renewable energy and sustainability.

For example, with respect to regulatory risks, the Annual Report included a risk factor entitled “The Company is subject to laws and regulations worldwide, changes to which could increase the Company’s costs and individually or in the aggregate adversely affect the Company’s business.” This risk factor specifically addresses potential changes in laws and regulations, which could “make the Company’s products and services less attractive to the Company’s customers, delay the introduction of new products in one or more regions, or cause the Company to change or limit its business practices.”

The report requested by the proposal would not, in substance, provide any more meaningful detail than the Company’s existing disclosures nor would it justify the use of significant resources associated with preparing such a report. The Company believes that the fulsome disclosure already publicly available in the Company’s public filings and on the Company’s website are more than adequate to address the underlying issues outlined in the proposal. The Company also believes that producing the report requested by the proposal would not be an efficient use of Company resources nor an effective way to protect shareholder value.

Let’s hope this proposal fails. I voted against it1

Footnotes:
  1. I once bought 11 shares of Apple with some extra money I made, I only regret I didn’t purchase more, especially as these shares have risen dramatically in value, and then split seven-for-one in 2013. If I had bought more Apple shares when they were $85 instead of paying health insurance, for instance, maybe I could have some money in the bank… []

Written by Seth Anderson

January 28th, 2015 at 9:26 am

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