By Dieter Holger
New York State Comptroller Thomas DiNapoli on Thursday failed in a bid to make North Carolina utility Duke Energy more transparent in its political spending.
Mr. DiNapoli had filed a shareholder proposal on behalf of the New York State Common Retirement Fund, which owns more than 1.5 million shares in Duke Energy, or around 2% of the company. The proposal would have required the company to publish a report, updated semiannually, detailing its spending on political campaigns, including efforts to influence the public on referendums and elections.
But the comptroller didn't get enough votes to support the proposal at Duke Energy's annual shareholder meeting on Thursday. Only about 35% of the company's voting shareholders supported the proposal.
"When companies keep their political spending in the dark, it can expose them to reputational and business risks that can threaten long-term shareholder value," Mr. DiNapoli said before the meeting. "That is something no investor wants."
A Duke Energy spokesman said the company's board viewed the proposals as "unnecessary and unproductive" because it already reports its political contributions semiannually.
Mr. DiNapoli also backed a separate proposal on lobbying filed by Mercy Investment Services, the socially responsible investment arm of the Sisters of Mercy religious order. Mercy Investment had voiced concerns about Duke Energy's spending on climate change policies at the shareholder meeting. The proposal would have required the company to publish an annual report on state and federal lobbying, including its membership in trade associations, payments to organizations and public communications aimed at influencing campaigns or legislation. It received 36% of the votes in favor.
Mercy Investment couldn't be immediately reached for comment.
Duke Energy is the largest investor-owned utility company by electricity generation in the U.S. and emits more carbon emissions than its peers, according to the Energy and Policy Institute. Of the 250 largest publicly listed industrial companies globally, Duke Energy is among the 35 most influential in spending money against measures aligned with the Paris Agreement on climate change, according to research firm Influence Map.
Duke Energy has faced pressure to disclose more of its lobbying and political expenses as investors have grown concerned with how energy companies spend money to influence environmental policy. In 2018 and 2017, similar political expense proposals failed to pass. Its current reporting doesn't go into the detail the investors sought, but does cover contributions in excess of $50,000 to trade associations for federal lobbying along with contributions to its corporate PAC and political organizations and parties, according to the company's report.
Duke Energy said it has reduced its carbon emissions by 31% since 2005 and is working toward a 40% reduction by 2030. Since 2011, the company has retired 20% of its coal-fired electricity generation and expects to reduce generation from coal by 17% by 2030.
"We've been aggressively working toward a lower-carbon energy future and reducing emissions," the Duke Energy spokesman said.
New York City's Comptroller Scott Stringer joined Mr. DiNapoli in supporting the proposals on behalf of the city's pension funds invested in Duke Energy. Pension funds Calstrs and the Florida State Board of Administration also said they supported the resolutions. The pension funds rank among the top 50 institutional investors in Duke Energy, according to FactSet.
"When corporations spend millions on lobbying to stall climate action, investors have to speak up to hold them accountable, and that's exactly what these proposals are about," Mr. Stringer, a Democrat, said.
Mr. DiNapoli, a Democrat who has served as New York's comptroller since 2007, has in recent years used the state's pension fund to demand more aggressive policies from companies on climate change. In 2018, Mr. DiNapoli withdrew shareholder resolutions at DTE Energy Co., Dominion Energy and Southwestern Energy after the companies agreed to report on how they will be impacted by the Paris Agreement's goal of limiting global warming to below 2 degrees Celsius compared with preindustrial levels.
"Mitigating climate risk through clean technologies and adjusting to the world-wide effort to limit global warming are vital to these companies' future," Mr. DiNapoli said at the time.
Write to Dieter Holger at Dieter.Holger@dowjones.com