Fighting Back and Creating Sustainable Value Through a Local Lens
More than 76% of the Shares Voted Reject Shareholder Proposal
May 4, 2023
By Alex Reyes, CNX Executive Vice President, General Counsel, and Corporate Secretary
CNX is proud of its uniquely local strategy to mitigate risk and create sustainable value by delivering economic opportunity as well as measurable environmental progress through operational improvements enabled by new innovative technologies.
We also place a high priority on targeted and tangible investments focused on positively improving the lives of local stakeholders and communities, particularly in the education and workforce development space, where we’re privileged to work.
While this approach is formally displayed in our Appalachia First strategic vision for the future, CNX’s core values and operating principles have always put the people and communities of Appalachia first by prioritizing regional investments and utilizing home-grown resources that make a Tangible, Impactful and Local impact.
CNX’s differentiated “local first” strategy is embedded in every aspect of our business – including participation in the public policy process. Regional stakeholders, who we engage with frequently given our commitment to operational transparency, understand our shared goals.
However, a recent shareholder proposal that sought to compel CNX to direct resources and time toward annual lobbying reporting on international policy was a solution in search of a problem.
Not only was this proposed action redundant given the transparency that already exists around the company’s lobbying efforts, but it also runs counter to the obvious local lens CNX is guided by. There are countless examples of how special interests are politicalizing the shareholder engagement process, and this is just the latest.
As it was clearly articulated in numerous communications to shareholders – who we routinely meet with and always welcome the opportunity to engage on critical business issues – the SEC and the proxy advisory firms, CNX believes strongly in our hyper-local vision aimed at creating sustainable economic and environmental benefits, particularly solutions that are positively contributing to a lower carbon future.
We took what some might consider an unconventional approach to this particular shareholder proposal. We believe that our vigorous response to this matter was not only warranted, but critically necessary to not acquiesce because that is the standard corporate playbook, but rather to take a stance and call out a practice that politicizes shareholder engagement and corporate governance. While running the “safe play” is the likely advice, and producing just one more corporate report might seem tempting, you can rest assured that it won’t be the last ideologically motivated item forced on owners.
The doers in energy, manufacturing, and other value creating endeavors must fight back against a broken capital markets ecosystem that allows and even encourages this misguided brand of ideological issue advocacy. Company owners, employees, and local communities deserve nothing less.
CNX believes that remaining focused on further reducing emissions and maintaining energy reliability – rather than engaging in burdensome, costly, and purely political reporting requirements that are non-core to our business – is the best approach to sustainably creating shareholder value.
Our commitment is this: we will continue to fight the fights worth fighting and stay laser-focused on creating long term per share value for the owners and all the stakeholders of this great company.