{ "title": "CNX Responds to Institutional Shareholder Services Regarding Recent Shareholder Proposal", "modified_at": "2023-04-21 19:27:58", "published_at": "2023-04-21 19:29:00", "url": "https://positive-energy-hub.prezly.com/cnx-responds-to-institutional-shareholder-services-regarding-report", "short_url": "http://prez.ly/Ufxc", "culture": "en", "language": "EN", "slug": "cnx-responds-to-institutional-shareholder-services-regarding-report", "body": "

Institutional Shareholder Services (“ISS”)

702 King Farm Boulevard, Suite 400

Rockville, Maryland 20850

 

Dear Sir or Madam:

We write to express our disappointment with the recently published ISS Proxy Analysis & Benchmark Policy Voting Recommendations (“ISS Report”). \u200b In particular, we take issue with ISS’ recommendation regarding a shareholder proposal from Handlery Hotels (via Proxy Impact) about how CNX’s lobbying and policy influence activities align with the Paris Agreement (the “Handlery Proposal”). \u200b Despite five full pages of commentary, you fail to mention the point we have been making for weeks through our public filings: CNX does not lobby against the Paris Agreement. \u200b The Handlery Proposal is a thinly veiled sham proposal and to treat it otherwise is poor corporate governance – which ISS would typically criticize. \u200b Thus, we feel compelled to reiterate four key points.

First, CNX does not lobby, either directly or indirectly through membership in trade associations, against the Paris Agreement. \u200b We made that clear in the one-page report we issued and filed with the SEC in response to the Handlery Proposal.[1] \u200b ISS notes this in its report and we reiterate here that our lobbying and policy influence activities focus on local policy initiatives that directly impact our business, such as local license to operate issues. \u200b

Second, instead of focusing on what yet another third-party has to say about CNX’s written disclosure on a topic that it does not actively lobby about, we urge shareholders to look at what CNX is doing. \u200b As disclosed in our Corporate Responsibility Report,[2] our Proxy Statement, and other public communications, CNX has achieved over a 90% reduction in GHG emissions since 2011, and we invest millions of dollars of capital into methane emissions reduction technologies to achieve continued reductions in Scopes 1 and 2 CO2e. \u200b We have set goals to further reduce our Scope 1 and 2 CO2e emissions by 67% and 59% respectively across our production and gathering and boosting segments by 2024 to reach a methane intensity target below 0.020%.[3] \u200b Despite these efforts being documented and publicly disclosed, we are being asked to undertake an additional meaningless paperwork exercise to prove a negative. \u200b To say that this is an inefficient use of company resources is an understatement.

Third, the ISS Report cites a March 2023 report from InfluenceMap, also a third-party ratings service, regarding CNX’s policy engagement activities. \u200b Curiously, it fails to mention the following statement contained in the InfluenceMap report: “CNX does not appear to hold any memberships to industry associations currently covered by InfluenceMap’s database. \u200b InfluenceMap is therefore unable to provide an overview of CNX’s indirect climate policy engagement via industry associations.” \u200b We think this point should be highlighted in the ISS Report since this statement is an affirmation that we are not engaged with organizations conducting such activities.

Lastly, and most importantly, as communicated to you previously in a letter dated March 29, 2023[4] and through various other communications we have filed with the SEC since, the Handlery Proposal is an abuse of the shareholder engagement process. \u200b As we have stated publicly for weeks, Handlery Hotels, our shareholder, has refused to engage with CNX about its proposal.[5] \u200b As far back as February 21, 2023, when we communicated to Handlery Hotels our opposition statement to the Handlery Proposal, Handlery Hotels has ignored our overtures to meet with us and engage in meaningful dialogue. \u200b Instead, we see a filing by Proxy Impact regurgitating its original messaging, which appears designed to advance its agenda of benefiting financially from the cottage industry of mass shareholder proposal submissions, without directly addressing CNX’s actions and publicly disclosed lack of lobbying against the Paris Agreement. \u200b For over two months, Jon Handlery and Handlery Hotels have ignored our requests to discuss the Handlery Proposal. \u200b To acquiesce to Proxy Impact’s demands without meaningful direct engagement with the shareholder of record is bad corporate governance. \u200b By association, your recommendation to support the Handlery Proposal is support for poor governance, and we urge you to reconsider. \u200b

We know that ISS typically does not engage with issuers during the time between their proxy publication and annual meeting, but we remain willing and eager to discuss these issues directly with you. \u200b We hope you will consider revising your report, and we will continue to engage directly with our other shareholders (and Handlery Hotels if they ever decide to respond to us) about the meaningful actions CNX is taking to reduce emissions and better the communities in which we operate. \u200b

To be clear, we continue to recommend a vote “AGAINST” the Handlery Proposal and suggest to our shareholders, including any that are recipients of the ISS Report, to review the above points and research the tangible impacts CNX is making before passing judgment on a shareholder proposal that its own proponent is unwilling to discuss. \u200b

 

Respectfully,

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Nick Deiuliis


\u200b

[1] https://www.sec.gov/Archives/edgar/data/1070412/000107041223000021/def143-24x2023.htm

[2] https://www.cnx.com/responsibility/corporate-responsibility-reports

[3] https://www.positiveenergyhub.com/mitigating-methane-basin-leading-in-the-leading-basin

[4] https://www.sec.gov/Archives/edgar/data/1070412/000107041223000030/def143-29x2023.htm

[5] See https://www.sec.gov/Archives/edgar/data/1070412/000107041223000047/def144-11x2023.htm

 

Further Reading

\n\n \n \n
\n\n \n CNX Responds to Outreach by Proxy Impact Regarding Handlery Hotels Shareholder Proposal \n \n
\n Jon Handlery, CEO Handlery Hotels Inc.
\n \n \n \n positive-energy-hub.prezly.com \n
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\n\n \n CNX Responds Regarding Shareholder Proposal \n \n
\n We recently reviewed the solicitation filed on April 13th by Proxy Impact regarding Handlery Hotels\u2019 shareholder proposal. Despite numerous attempts at outreach, we still have not received any response from you directly.
\n \n \n \n positive-energy-hub.prezly.com \n
\n
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\n\n \n \n
\n\n \n CNX Responds to Sustainalytics\u2019 Meeting Profile Regarding Shareholder Proposal \n \n
\n VIA Email to Sustainalytics (overlay.support@morningstar.com)
\n \n \n \n positive-energy-hub.prezly.com \n
\n
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