These days, it's become clear that reducing carbon emissions and developing energy alternatives is essential. Just yesterday, scientists said that due to our planet's current warming trends and emissions forecasts, the North Pole will become a major shipping path by 2040. That's an eerie and ominous expectation, foreshadowing a real sea change in the way our world looks in the future.
Alternative energy isn't just an environmental concern, although that factor is huge. It's also important for corporations, whether it's due to the cost savings they'll gain or the risks and industry disruptions they'll fend off.
Unfortunately, addressing this necessity is still too often plagued by failure to launch rather than positive movement.
Slow progress
Many power companies -- the ones you'd think would be way ahead of this game -- remain behind the times. Granted, they've relied on fossil fuels for ages and it's difficult for large, entrenched companies to evolve, but the writing's on the wall and has been for quite some time now.
This week, the World Economic Forum and IHS CERA revealed that the electricity industry still needs to make significant progress in this area. As we speak, 87% of world energy demand is still provided by oil, coal, and natural gas. Nuclear energy accounts for another 5%. That means just a tiny percentage of demand is met with cleaner energy, even though renewable energy use is increasing rapidly.
The report acknowledges some of the difficulties the industry faces, since converting to alternative energy would take some innovation and financial resources to make it more feasible. For example, technologies and innovations are needed to better harness the uneven generation capabilities of renewable sources like solar and windmills, as well as deal with geography and logistics.
Unfortunately, today's shareholders have a major enemy: themselves. Many traditional investors would rather see profits right now than see money spent on long-term research and development for sustainable power generation.
Squandered power
Hopefully more investors will realize that being a shareholder includes responsibility and dedication to true long-term thinking. In a step in the right direction, some shareholders are pushing energy companies to do more in terms of at the very least disclosing environmental plans and progress.
Ceres, an advocate for sustainability leadership that gathers investors, companies, and public interest groups in that common goal, announced some shareholder resolutions filed at major power companies at the end of February.
For example, New York State Comptroller Thomas DiNapoli, trustee of the $150 billion New York State Common Retirement Fund, is taking the lead on filing resolutions with major power providers like Ameren (AEE 0.46%), First Energy (FE 0.68%), and DTE Energy (DTE +0.26%). These resolutions urge the companies to work on boosting energy efficiency and renewable energy.
The shareholder resolutions are timely, too, given recent moves by these companies. First Energy opposed Ohio's energy efficiency standards, and DTE Energy likewise fought against Michigan's attempt to install energy efficiency initiatives.
Obviously shareholders must stay aware of indications certain companies will fight for status quo. Given the fact that proxy season's close, shareholders will be able to cast their votes on resolutions like these very soon.
One superstar partnership
Fortunately, some corporate managements are far more proactively embracing sustainability. Sometimes it's hard to adore Wal-Mart (WMT 0.61%), but one thing it has done rather well is step up its renewable energy and sustainability initiatives.
First Energy may oppose clean-energy efficiency standards in Ohio, but somebody big's working on it anyway. Wal-Mart said it's teaming up with recent solar IPO SolarCity (SCTY +0.00%) to use more solar energy. The two companies will install roof-top solar systems at 12 Wal-Mart and Sam's Club locations in Ohio. These will generate 6 million kilowatt hours of solar electricity, and should represent 5% to 20% of the stores' electricity needs.
Wal-Mart's investment in the state will take away 5,500 tons of carbon emissions, which is the equivalent of taking an annual 1,152 cars off the roads. This also makes Wal-Mart the state's largest solar power user.
Let's not let America fall behind
Climate change threats are real, and increasing violent weather and the possibility of disruptions to many industries -- not to mention human beings -- is no small concern. Fortunately some companies are taking an extremely proactive approach (and many find the cost savings make good business sense, too).
The fact is, America's an innovative country, and there's no reason why we can't channel that creativity and can-do spirit to tackle some of the looming problems on the horizon.
As for those of us who are shareholders, let's assess where our companies stand on issues like these and either avoid the laggards or vote our proxies to encourage positive change.
Check back at Fool.com for more of Alyce Lomax's columns on environmental, social, and governance issues.
