Boston Common’s response to Commissioner Gallagher’s comments on PNC Resolution

Shareholders Inquiry on Climate Change Risk a “Dubious Significant Policy Issue”

We strongly disagree with the March 27, 2014 comments made by Commissioner Daniel Gallagher at Tulane University Law School about the SEC’s regulation of corporate governance. As the lead filer of the shareholder resolution at PNC Financial that he cited as an example of “dubious ‘significant policy issue’ proposals”, Boston Common Asset Management firmly believes that climate change risk is of import to all investors. We responded to Commissioner Gallagher in an April 4, 2014 letter.

We have been in dialogue with PNC Financial (PNC) regarding climate change and mountain top removal (MTR) coal mining since 2010 and filed the shareholder resolution with PNC focused on climate change risk only after multiple efforts to engage the company in meaningful conversation proved unsuccessful. We believe that the company’s current disclosure is insufficient, piecemeal, and anecdotal compared to that of its peers including BNP Paribas, Credit Suisse, HSBC, and Wells Fargo.

In 2013, 22.8% of PNC shareholders demonstrated shared concern by voting in favor of Boston Common’s proposal. We do not believe that only “institutions with idiosyncratic and often political agendas” voted these shares, as Gallagher suggested. Rather, we believe that a broad spectrum of investors are aware of and concerned about the potential long-term implications of climate risk in their portfolios. When a significant percentage of shareholders, say over 20%, state unequivocally that they have not received sufficient information on an issue, it should be a signal to the company, and to the SEC, that it is an issue requiring increased disclosure.

Gallagher spoke of the need to provide “investors with the information they need to make informed investment decisions.” However, his comments appear to contradict this statement.

Shareholder resolutions play an important role in supporting investor access to meaningful data.

We believe that it should not be the SEC’s role to arbitrate shareholders’ interests and concerns, or to restrict dialogue and communication amongst investors around these topics including climate change.

Respectfully Submitted

Lauren Compere, Managing Director
Boston Common Asset Management

For more information, please contact Lauren Compere, Managing Director at lcompere@bostoncommonasset.com.

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