PNC Urged to Stop Financing Controversial Mining

A chief executive has to be ready for everything — especially at the annual meeting.

Just ask James Rohr, the chairman and chief executive of PNC Financial Services Group (PNC), who presided over its shareholder gathering Tuesday.

The official agenda was going as planned. Happy company video? Check. Say on pay vote? Approved. Re-election of the full board? Done.

But amid that popped up the questions about … mountaintop removal. The controversial coal mining practice pits environmentalists against job advocates in West Virginia and other places in the Appalachians. Critics say the surface mining technique deforests environmentally sensitive areas and pollutes air and water; supporters say it creates jobs in depressed areas and that mountain hills can be rebuilt.

Four attendees of the meeting raised polite but firm objections to the fact that PNC does business with mining interests that engage in mountaintop removal. One such customer is Alpha Natural Resources, which acquired the highly controversial Massey Energy Co. in June, they said.

"PNC's continued investment in MTR coal companies represents a very poor choice," said Carolyn McCoy, the chair of an advocacy group called Earth Quaker Action Team. "MTR threatens the quality of life of every man, woman and child and even unborn child in areas near mountaintop removal coal mining.

Rohr said several times that PNC had changed its policies in dealing with customers in the mining business.

"We don't finance mountaintop removal mining projects, and we don't finance any mining company that has mountaintop mining as the majority of their activities," he said. It finances companies that are in the business, but such customers on average devote 8% of their activities to mountaintop removal, Rohr said.

PNC had a tough decision, he said, in seeking to be environmentally responsible while trying not to hurt the many people that work for large energy companies.

"We have responded to you the best that we know how, and we have tried to strike a balance," he said.

The issue has come up at previous annual meetings, a PNC spokesman said. PNC does business with "a number of large coal companies" that meet the profile Rohr described, but he declined to give a specific number.

PNC's compromise is not good enough, McCoy and others said. It "hasn't helped the people in Appalachia one bit," McCoy said. "We feel that this policy is not adequate."

She and fellow supporters urged the company to cease all business with companies involved in mountaintop removal.

That is not practical, Rohr responded.

"There is not a way for us to finance coal mining in general while we are eliminating any support of mountaintop removal," Rohr said. "That's because the large coal companies are engaged in it in a minor way. So unless we would adopt a discriminatory practice against the entire industry, we would still have some mountaintop removal activity in our portfolio."

Critics of mountaintop removal should focus their concerns on the Environmental Protection Agency, not PNC, Rohr said.

Protestors plan a "Green Walk" from Philadelphia to Pittsburgh starting Monday. The walk is scheduled to last 16 days and end at PNC headquarters.

Overall, the meeting was low-key. Some shareholders urged PNC to raise the dividend further to pre-crisis levels, cut expenses and get new blood on the board.

Votes were held on three matters: say on pay, reelection of its entire 15-member board and renewal of the company's independent auditor. All passed. The company said vote totals were not yet available.