AHC Group

Climate change report shareholders request: Progressive action + practical steps + strong relationships = Positive experience

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Courtesy of AHC Group

In the fall of 2004 DTE Energy received a request 'that a committee of independent directors of the Board assess how the company is responding to rising regulatory, competitive and public pressure to significantly reduce carbon dioxide and other emissions and report to shareholders (at reasonable cost and omitting proprietary information) by September 1, 2005.' This started an effort to document, in one report, our past and ongoing progressive action to reduce or offset greenhouse gas and other traditional emissions and practical steps to influence policy development in this area. It is important to note that this request did not begin the effort to make such reductions, influence the development of such policy, engage management and the Board of Directors, or develop a relationship with a very interested shareholder group — that activity had begun many years earlier. Thus, DTE began this process with a strong proactive base already in place.

The request for the report came from the Immaculate Heart of Mary (IHM) Responsible Investment Group. This is a group of long-time shareholders that have had a sincere interest in a variety of public responsibility issues, including the environment. It is a group that has introduced shareholder resolutions in the past and with which members of the company meet three to four times per year. They push hard on issues in which they are interested and we don't always agree, at least at first. They are honest, sincere and have no hidden agendas. They are a great group to work with and help us be a better company. Dealing with issues of such importance as climate change and controlling the traditional emissions of nitrogen dioxide, sulfur dioxide and mercury require good strong ongoing relationships where individuals can share information and opinions openly and grow from the input of other trusted participants developing solutions.

The request for the report asked that it be overseen by a committee of the Board of Directors. At DTE Energy the Public Responsibility Committee of the Board of Directors oversees the environmental program. We also have an Environmental Steering Committee, chaired by the President and Chief Operating Officer and including several senior officers to oversee the management of major environmental policy and strategy development. The Environmental Steering Committee generally meets monthly and a report is given to the Public Responsibility Committee at least annually. Both committees are actively engaged on an ongoing basis. These committees helped establish the goals, tone, key messages, the distribution, and even some of the specific language of the report. They had the opportunity for final approval on every aspect of the report. Dealing with issues of such importance as climate change and controlling traditional emissions requires the ongoing engagement of a company's senior leadership.

One of the primary goals of the report was to educate. The education included the difficulty and complexity of the issue both technically and in development of the policy, the risks and challenges specific to DTE Energy, and the company's position and reasoning on climate change policy. Another goal of the report was to continue to position DTE Energy as a leader and key participant in future policy development — constructive and positioned to have significant influence on the middle or the mass in addressing the issue. Finally, one of our goals was continuous learning and feedback from those reading the report. We continue to distribute and solicit feedback on the report and the issue it covers from those who read it. The report is found on the company's website HERE. We welcome comments and input.

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