January 19, 2016

Zafar Hasan
The AES Corporation
zafar.hasan@aes.com
Re:

The AES Corporation
Incoming letter dated December 18, 2015

Dear Mr. Hasan:
This is in response to your letter dated December 18, 2015 concerning the
shareholder proposal submitted to AES by Mercy Investment Services, Inc. and the
Board of Pensions of the Presbyterian Church (USA). Copies of all of the
correspondence on which this response is based will be made available on our website at
http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8.shtml. For your reference, a
brief discussion of the Division’s informal procedures regarding shareholder proposals is
also available at the same website address.
Sincerely,
Matt S. McNair
Senior Special Counsel
Enclosure
cc:

Pat Zerega
Mercy Investment Services, Inc.
pzerega@mercyinvestments.org

 January 19, 2016

Response of the Office of Chief Counsel
Division of Corporation Finance
Re:

The AES Corporation
Incoming letter dated December 18, 2015

The proposal requests that the company, with board oversight, publish an
assessment of the long-term impacts on the company’s portfolio of public policies and
technological advances that are consistent with limiting global warming to no more than
two degrees Celsius over pre-industrial levels.
We are unable to concur in your view that AES may exclude the proposal under
rule 14a-8(i)(3). We are unable to conclude that the proposal is so inherently vague or
indefinite that neither the shareholders voting on the proposal, nor the company in
implementing the proposal, would be able to determine with any reasonable certainty
exactly what actions or measures the proposal requires. Accordingly, we do not believe
that AES may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(3).
We are unable to concur in your view that AES may exclude the proposal under
rule 14a-8(i)(6). In our view, the company does not lack the power or authority to
implement the proposal. Accordingly, we do not believe that AES may omit the proposal
from its proxy materials in reliance on rule 14a-8(i)(6).
We are unable to concur in your view that AES may exclude the proposal under
rule 14a-8(i)(7). In arriving at this position, we note that the proposal focuses on the
significant policy issue of climate change. Accordingly, we do not believe that AES may
omit the proposal from its proxy materials in reliance on rule 14a-8(i)(7).
Sincerely,
Christina M. Thomas
Attorney-Adviser

 DIVISION OF CORPORATION FINANCE
INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS

The Division of Corporation Finance believes that its responsibility with respect to
matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matter under the proxy
rules, is to aid those who must comply with the rule by offering informal advice and suggestions
and to determine, initially, whether or not it may be appropriate in a particular matter to
recommend enforcement action to the Commission. In connection with a shareholder proposal
under Rule 14a-8, the Division’s staff considers the information furnished to it by the Company
in support of its intention to exclude the proposals from the Company’s proxy materials, as well
as any information furnished by the proponent or the proponent’s representative.
Although Rule 14a-8(k) does not require any communications from shareholders to the
Commission’s staff, the staff will always consider information concerning alleged violations of
the statutes administered by the Commission, including argument as to whether or not activities
proposed to be taken would be violative of the statute or rule involved. The receipt by the staff
of such information, however, should not be construed as changing the staff’s informal
procedures and proxy review into a formal or adversary procedure.
It is important to note that the staff’s and Commission’s no-action responses to
Rule 14a-8(j) submissions reflect only informal views. The determinations reached in these
no-action letters do not and cannot adjudicate the merits of a company’s position with respect to
the proposal. Only a court such as a U.S. District Court can decide whether a company is
obligated to include shareholders proposals in its proxy materials. Accordingly a discretionary
determination not to recommend or take Commission enforcement action, does not preclude a
proponent, or any shareholder of a company, from pursuing any rights he or she may have
against the company in court, should the management omit the proposal from the company’s
proxy material.

 Zafar A . Hasan
Vice President and Chief Corporate
Counsel

AES

The AES Corporation
4300 Wilson Bou levard
Arlington, VA 22203

we are the energy
tel

1 703 682 1110
zafa r.hasan@aes.com
www.aes.com

December 18, 2015
VIA E-MAIL
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re:

The AES Corporation
Stockholder Proposal ofMercy Investment Services, Inc. and
The Board ofPensions of the Presbyterian Church (USA)
Securities Exchange Act of 1934- Rule 14a-8

Ladies and Gentlemen:
This letter is to inform you that The AES Corporation (the "Company") intends to omit from its proxy
statement and form of proxy for its 2016 Annual Meeting of Stockholders (collectively, the "2016 Proxy
Materials") a stockholder proposal (the "Proposal") and statement in support thereof (the "Supporting
Statement") received from Mercy Investment Services, Inc. and The Board of Pensions of the
Presbyterian Church (USA) (the "Proponents").
Pursuant to Rule 14a-8(j), we have:
•

filed this letter with the Securities and Exchange Commission (the "Commission") no
later than eighty (80) calendar days before the Company intends to file its definitive 2016
Proxy Materials with the Commission; and

•

concurrently sent copies of this correspondence to the Proponents.

Rule 14a-8(k) and Staff Legal Bulletin No. 14D (Nov. 7, 2008) ("SLB 14D") provide that stockholder
proponents are required to send companies a copy of any correspondence that the proponents elect to
submit to the Commission or the staff of the Division of Corporation Finance (the "Staff').
Accordingly, we are taking this opportunity to inform the Proponents that if the Proponents elect to
submit additional correspondence to the Commission or the Staff with respect to this Proposal, a copy of
that correspondence should be furnished concurrently to the undersigned on behalf of the Company
pursuant to Rule 14a-8(k) and SLB 14D.

 Page 2

THE PROPOSAL
The Proposal states:
RESOLVED: Shareholders request that AES, with board oversight, publish an
assessment (at reasonable cost and omitting proprietary information) of the long
term impacts on the company’s portfolio of public policies and technological
advances that are consistent with limiting global warming to no more than 2
degrees Celsius over pre-industrial levels.
The Supporting Statement states:
Such report should assess the resilience of AES’s portfolio including under a
scenario in which reduction in demand results from carbon restrictions and related
rules adopted by governments consistent with the globally agreed upon 2 degree
target accompanied by continued cost reductions in clean energy technologies
(such as the IEA’s 450ppm scenario). The report should assess the impacts on the
company’s full portfolio of power generation assets and planned capital
expenditures through 2040 and address the financial risks associated with such a
scenario.
A copy of the Proposal, as well as related correspondence with the Proponents, is attached to this
letter as Exhibit A.
BASES FOR EXCLUSION
We hereby respectfully request that the Staff concur in our view that the Proposal may properly
be excluded from the 2016 Proxy Materials pursuant to:
•

Rule 14a-8(i)(3) because the Proposal is impermissibly vague and indefinite so as to be
inherently misleading;

•

Rule 14a-8(i)(6) because the Company lacks the power or authority to implement the
Proposal; and

•

Rule 14a-8(i)(7) because the Proposal deals with matters relating to the Company’s
ordinary business operations.

 Page 3

THE COMPANY
The Company is a global power company that provides affordable, sustainable energy to 18
countries through a diverse portfolio of distribution businesses as well as thermal and renewable
generation facilities. The Company’s energy solutions reflect a diversified range of technologies
and fuel types, including (in order of total megawatts) coal, natural gas, renewables, and oil,
diesel and pet coke.1 Within its business units, the Company has two primary business lines. The
first business line is generation, where the Company owns and/or operates power plants to
generate and sell power to customers, such as utilities, industrial users, and other intermediaries.
The second business line is utilities, where the Company owns and/or operates utilities to
generate or purchase, distribute, transmit and sell electricity to end-user customers in the
residential, commercial, industrial and governmental sectors within a defined service area and, in
certain circumstances, on the wholesale market. The Company also is the world leader in batterybased energy storage.
ANALYSIS
I.

The Proposal May Be Excluded Under Rule 14a-8(i)(3) Because The Proposal Is
Impermissibly Vague And Indefinite So As To Be Inherently Misleading.

As further described below, the Proposal is excludable under Rule 14a-8(i)(3) because (i) the
Proposal relies upon a vague and indefinite standard, and (ii) the Resolved clause and the
Supporting Statement have inconsistent statements on what the requested report is to address.
Rule 14a-8(i)(3) permits the exclusion of a stockholder proposal if the proposal or supporting
statement is contrary to any of the Commission’s proxy rules, including Rule 14a-9, which
prohibits materially false or misleading statements in proxy soliciting materials. The Staff
consistently has taken the position that a stockholder proposal is excludable under Rule
14a-8(i)(3) as vague and indefinite if “neither the stockholders voting on the proposal, nor the
company in implementing the proposal (if adopted), would be able to determine with any
reasonable certainty exactly what actions or measures the proposal requires.” Staff Legal
Bulletin No. 14B (Sept. 15, 2004) (“SLB 14B”); see also Dyer v. SEC, 287 F.2d 773, 781 (8th
Cir. 1961) (“[I]t appears to us that the proposal, as drafted and submitted to the company, is so
vague and indefinite as to make it impossible for either the board of directors or the stockholders
at large to comprehend precisely what the proposal would entail.”); Capital One Financial Corp.
(avail. Feb. 7, 2003) (concurring with the exclusion of a proposal under Rule 14a-8(i)(3) where
the company argued that its stockholders “would not know with any certainty what they are
1

See 2014 AES Sustainability Report, available at
http://s2.q4cdn.com/825052743/files/doc_downloads/sustanaibility/2014/2014-AES-Sustainability-Report.pdf

 Page 4

voting either for or against”); Fuqua Industries, Inc. (avail. Mar. 12, 1991) (Staff concurred with
exclusion under Rule 14a-8(i)(3) where a company and its stockholders might interpret the
proposal differently, such that “any action ultimately taken by the [c]ompany upon
implementation [of the proposal] could be significantly different from the actions envisioned by
shareholders voting on the proposal”).
A.

The Proposal Relies Upon A Vague And Indefinite Standard.

The Staff has on numerous occasions permitted the exclusion of proposals under Rule 14a 8(i)(3)
where it was impossible to determine exactly how to implement the proposal because important
aspects of the process or criteria requested were ambiguously drafted. For example, in NSTAR
(avail. Jan. 5, 2007) the Staff concurred with the exclusion of a proposal requesting “standards of
record keeping of our financial records” because the terms “standards” and “financial records”
were vague and indefinite. As further described below, in this case, the Proposal would require
the Company to create an assessment based upon public policy and technological advances that
are “consistent with” an undefined standard for limiting global warming. Further, even if the
target was not vaguely defined, the requested assessment would require the Company to project
25 years into the future and predict a near-infinite number of public policy changes and/or
technological advances (regardless of whether the Company believes such changes or advances
are likely to occur) to create an assessment of the impact of those hypothetical events on the
Company’s portfolio, such that neither stockholders nor the Company would know exactly what
it should address in the requested report.
In Pfizer Inc. (avail Feb. 18, 2003), the Staff concurred with the exclusion of a proposal that
requested that the company’s board of directors make all stock option grants to management and
the board at no less than the “highest stock price” and that the options contain a buyback
provision. The company argued that the proposal was vaguely worded such that the company:
would not know whether the reference to “the highest stock price” refers to
the highest price at which the stock trades on the date that the [b]oard seeks to
“make all options” conform to the [p]roposal, the highest price at which the
stock has ever traded prior to the date the [b]oard acts or a price determined
within a limited time in the past, or whether the [p]roposal requires some form
of action that would take into account stock price highs reached by the
[c]ompany’s stock in the future.
Finding the proposal vague and indefinite, the Staff concurred with the company’s belief that the
proposal was excludable under Rule 14a-8(i)(3). Similarly, in Bank Mutual Corp. (avail. Jan. 11,
2005), the Staff concurred with the exclusion of a proposal requesting that “a mandatory
retirement age be established for all directors upon attaining the age of 72 years.” The company

 Page 5

argued that it was impossible to determine exactly how to implement the proposal because it was
unclear whether the proposal required that the company establish a policy that all directors must
retire at the age of 72 or whether the company would instead be required to determine a
mandatory retirement age for each director when he or she attained the age of 72 years, and the
Staff concurred that the proposal was excludable as vague and indefinite. See also; International
Business Machines Corp. (avail. Jan. 10, 2003) (concurring with the exclusion of a proposal
regarding nominees for the company’s board of directors where it was unclear how to determine
whether the nominee was a “new member” of the board).
Here, the Proposal asks that the Company publish an assessment of “the long term impacts on
the company’s portfolio of public policies and technological advances that are consistent with
limiting global warming to no more than 2 degrees Celsius over pre-industrial levels.”
(emphasis added). The Proposal is vague and misleading because it is unclear, based on the
information in the Proposal, the Supporting Statement and the accompanying “Whereas”
paragraphs, whether the report is to address public policies and technological advances that are
designed to limit global warming to a 2 degrees Celsius increase over pre-industrial levels, or
whether instead the report is to address public policies and technological advances that are
intended to move global temperatures to levels that are above or below a 2 degrees Celsius
increase over pre-industrial levels. Thus, the phrase “consistent with limiting global warming to
no more than 2 degrees Celsius over pre-industrial levels” could mean technologies and policies
that allow for a 2 degree increase or could be read to mean a wider range of technologies and
policies that are “consistent with” but may have a greater or lesser impact on limiting global
warming. For example, an assessment of policies and technologies that limit global warming to
2 degrees over pre-industrial level, that aim to reduce global warming by 1 degree from preindustrial levels, or that limit global warming to 3 degrees from pre-industrial levels as an
interim step toward reaching a 2 degree limit are all “consistent with” policies limiting global
warming to no more than 2 degrees Celsius over pre-industrial levels. This ambiguity in the
assessment requested in the Proposal makes the Proposal so vague that neither stockholders
considering the Proposal nor the Company (if it were to implement the Proposal) would know
with any certainty what types of public policies or technological advances should be
contemplated by the requested report.
In this respect, the Proposal is distinguishable from the proposal in OGE Energy Corp. (avail.
Feb. 25, 2015). There, the Staff did not concur with the company’s argument that the proposal
could be excluded on Rule 14a-8(i)(3) grounds. The proposal in OGE Energy Corp. requested
that the company publish a report describing how it could “fulfill medium and long-term
greenhouse gas emission reduction scenarios consistent with national and international
[greenhouse gas] goals, and the implications of those scenarios for regulatory risk and
operational costs.” The company argued that the proposal was too vague for it to implement
because there were no “recognized national and international emission reduction targets,” and

 Page 6

thus the company had no “reasonable certainty as to what goals the proposed report [was]
intended to address.” However, unlike the case here, in OGE Energy Corp. the proposal and
supporting statement listed specific targets set forth by various entities which could be assessed
by the Company. Further, the report required the company to describe how the company itself
could meet those goals. In contrast, here the Proposal is not asking the Company how it would
respond to a goal of limiting global warming to no more than 2 degrees Celsius (a goal which, as
discussed below, is not a company- or industry-specific goal) but instead is requesting how the
Company will be impacted, over the course of 25 years into the future, by technologies and
policies that are “consistent with limiting global warming to no more than 2 degrees Celsius . . .
.” The absence of specific targets or company actions creates a significant distinction between
the proposal in OGE Energy Corp. and the Proposal. Unlike the specific targets in OGE Energy
Corp., in the case of the Proposal, policies and technologies could develop over the next 25 years
which (a) directly regulate or improve technology in the power industry or (b) regulate or
improve technology in other industries only, such as the automobile industry, with no regulation
or technological change in the power industry. Both of these scenarios, along with innumerable
others, would be “consistent with” a goal of “no more than” a 2 degree Celsius increase in global
warming. Therefore, because of the ambiguity and breadth of what might be “consistent with” a
goal of “no more than” a 2 degree Celsius increase in global warming, the Proposal is vague and
indefinite.
Moreover, the Proposal’s reference to unspecified “public policies and technological advances”
is itself a vague, speculative and undefined standard. The Proposal therefore requires the
Company to speculate about the long term actions over a 25 year timeframe of governments in
the various jurisdictions in which the Company operates, both in setting global warming targets
and in creating public policy to achieve those targets, as well as to predict long term
advancements in technology, and then to hypothesize how those changes would impact its
portfolio. Again, this is in stark contrast to the proposal in OGE Energy Corp. While that
proposal asked OGE Energy Corp. to report on actions that it would take to meet defined goals,
the Proposal does not provide a concrete description of the public policies or technological
advances that the Company is to assess, but instead requires the Company to hypothesize about
the long term actions of others to meet a vaguely stated goal. Because the long term public
policy changes and technological advances referenced in the Proposal and Supporting Statement
are not described within the four corners of the Proposal, stockholders voting on the Proposal
might interpret it differently, such that “any action ultimately taken by the [c]ompany upon
implementation [of the proposal] could be significantly different from the actions envisioned by
shareholders voting on the proposal.” Fuqua Indus., Inc. (avail. Mar. 12, 1991). As noted in the
preceding paragraph, there are innumerable technological changes or regulations which could
occur over the next 25 years that would be “consistent with” the referenced climate change
limitation, but with no impact on the power industry (or the Company). Thus, the Proposal is
excludable under Rule 14a-8(i)(3) because it relies upon a vague and indefinite standard.

 Page 7

B.

The Proposal Contains Differing And Inconsistent Statements On What The
Requested Report Would Address.

The Proposal is excludable under Rule 14a-8(i)(3) because the Resolved clause and the
Supporting Statement have inconsistent statements on what the requested report is to address.
The Staff on numerous occasions has concurred that a stockholder proposal was sufficiently
misleading so as to justify exclusion under Rule 14a-8(i)(3) where the supporting statement and
the proposal were inconsistent or unrelated. See Limited Brands Inc. (avail. Feb. 29, 2012)
(concurring with the exclusion of a proposal purporting to ban accelerated vesting, but in fact
providing for accelerated vesting in certain circumstances); SunTrust Banks, Inc. (avail. Dec.
31, 2008) (concurring with the exclusion of a proposal purporting to be limited for a specified
time, but in fact containing no such limitation); Jefferies Group, Inc. (avail. Feb. 11, 2008,
recon. denied Feb. 25, 2008) (concurring with the exclusion of a proposal seeking a
stockholder vote to “ratify and approve the board Compensation Committee Report and the
executive compensation policies and practices set forth in the Company’s Compensation
Discussion and Analysis” when the supporting statement described the proposed stockholder
vote as covering “whether the company’s policies and decisions on compensation have been
adequately explained and whether they are in the best interest of shareholders”); The Ryland
Group, Inc. (avail. Feb. 7, 2008) (same).
In this case, the proposed Resolution requests the Company to prepare a report that addresses
“the long term impacts on the company’s portfolio of public policies and technological
advances” that are consistent with the referenced global warming goal. In contrast, the
Supporting Statement says that the report “should assess the resilience of AES’s portfolio
including under a scenario in which reduction in demand results from carbon restrictions and
related rules adopted by governments” that are consistent with the referenced global warming
goal (emphasis added). As a result, neither stockholders nor the Company are able to determine
whether the premise of the requested report should be government regulation and technological
advances that affect the Company as a global power company engaged in energy generation and
distribution (a supply-side issue) or whether the report should address government regulation and
technological impact on customers that could include a reduction in demand (a demand-side
issue which may or may not result from technological advances). Without a clear indication of
what the Proponents intend for the Proposal to address, stockholders could have different and
conflicting expectations of what a vote for the Proposal would produce, and the Company would
be unable to determine what it is to address. Thus, consistent with Limited Brands, SunTrust
Banks, Jefferies Group and The Ryland Group, the vagueness and lack of coherence between the
“Whereas” paragraphs and the “Resolved” paragraph renders the Proponent’s entire Submission
inherently misleading and excludable.

 Page 8

II.

The Proposal May Be Excluded Under Rule 14a-8(i)(6) Because The Company
Lacks The Power Or Authority To Implement The Proposal.

The Proposal may be excluded under Rule 14a-8(i)(6) because the Company is unable to address
the impact of public policy and technological advances that do not exist and are not described in
the Proposal.
Rule 14a-8(i)(6) provides that a company may omit a stockholder proposal “if the company
would lack the power or authority to implement the proposal.” The Company lacks the power to
implement the Proposal because of the vague nature of the Proposal and the report being sought.
Specifically, (i) there is no indication in the Proposal of what public policies and technological
advances are “consistent with limiting global warming to no more than 2 degrees Celsius over
pre-industrial levels,” and (ii) the Supporting Statement requests that the report called for by the
Proposal include an assessment of “the impacts on the company’s full portfolio of power
generation assets and planned capital expenditures through 2040,” which is impracticable given
that the Company does not currently know what its portfolio of assets and its capital
expenditures will consist of 25 years in the future.
The Company lacks the power to implement the Proposal, which requests publication of an
assessment “of the long term impacts on the company’s portfolio of public policies and
technological advances that are consistent with limiting global warming to no more than 2
degrees Celsius over pre-industrial levels” because, as noted above in Part I, no indication is
given in the Proposal of what such public policies and technological advances would be. It is
beyond the Company’s power to issue an assessment of the 25 year impacts of various factors
when such factors are never defined and no indication is given as to how such factors could or
should be defined. Further, it is impossible for the Company to know what will make up its
“portfolio of power generation assets and planned capital expenditures” 25 years in the future.
Essentially, the factors that the report would be based on simply do not exist.
In this respect, the Proposal is comparable to others that the Staff has concurred may be excluded
under Rule 14a-8(i)(6) because they seek company action based on a reference to regulations that
do not exist. For example, in Philip Morris Cos. Inc. (avail. Feb. 25, 1998), the Staff considered
a proposal that called for the company’s board to “create a formula linking future executive
compensation packages to compliance with federally-mandated decreases in teen smoking.” The
company argued in its no-action request that it lacked the power or authority to implement the
proposal because, even though the company had entered into a memorandum of understanding
with other companies to support the adoption of federal legislation that would incorporate
features of the proposal, no federal legislation yet existed, and the goals provided by the
memorandum of understanding were industry-wide goals and not intended to be company
specific. In concurring that the proposal could be excluded under the predecessor to Rule

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14a-8(i)(6), the Staff stated: “The staff notes in particular the Company’s representation that the
goals set forth in the proposed global settlement agreement are directed at the whole tobacco
industry, not individual companies; it is therefore unclear what specific standards the Company
would have to meet.” See also RJR Nabisco Holdings Corp. (avail. Feb. 25, 1998) (concurring
with the exclusion of a similar proposal because compensation would have to be tied to the
achievement of industry-wide goals).
Just as in Philip Morris and RJR Nabisco Holdings, the Company lacks the power to implement
the Proposal because the factors that the Company is requested to assess—public policies and
technological advances that could affect the Company over the next 25 years—are unknown and
the assets and expenditures requested to be evaluated are similarly unknown at this point in time,
and any such report that would be created by the Company would be based on pure speculation.
Further, just as the goals set forth in RJR Nabisco Holdings were industry-wide goals and not
specific to individual companies, the global warming goals referenced in the Proposal are not
even specific to the Company’s industry, but are meant for the entire planet. The Proposal, if
implemented, would require the Company to hypothesize about future technologies and global
public policies through the year 2040, not just as they apply to its own industry, but as they apply
to every industry that may be touched by these things. The Company has no way of knowing
how undefined future events will affect its undefined future portfolio and expenditures and
whether these changes will require the Company to divest or modify particular assets. The report
requested by the Proposal is so speculative that it would be beyond the power of the Company to
implement. Therefore, the Proposal is excludable pursuant to Rule 14a-8(i)(6).
III.
The Proposal May Be Excluded Under Rule 14a-8(i)(7) Because It Deals With
Matters Related To The Company’s Ordinary Business Operations.
Although the Company is not able to determine or predict what the Proposal requests the
Company to assess over the next 25 years, to the extent that there are public policy changes and
technological advances that are have occurred or are pending, the Company assesses their impact
on its assets and capital expenditures in the ordinary course of its business. Thus, as further
discussed below, to the extent that the Proposal is not vague or impossible to implement, the
focus of the Proposal is on how the Company responds to government regulation and public
policy and an assessment of the Company’s long term investment and capital expenditure
strategy, both of which are matters that implicate the Company’s ordinary business. Rule
14a-8(i)(7) allows for the exclusion of a stockholder proposal that “deals with a matter relating to
the company’s ordinary business operations.” According to the Commission’s release
accompanying the 1998 amendments to Rule 14a-8, the term “ordinary business” “refers to
matters that are not necessarily ‘ordinary’ in the common meaning of the word,” but instead the
term “is rooted in the corporate law concept providing management with flexibility in directing
certain core matters involving the company’s business and operations.” Exchange Act Release

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No. 40018 (May 21, 1998) (the “1998 Release”). In the 1998 Release, the Commission stated
that the underlying policy of the ordinary business exclusion is “to confine the resolution of
ordinary business problems to management and the board of directors, since it is impracticable
for shareholders to decide how to solve such problems at an annual shareholders meeting,” and
identified two central considerations that underlie this policy. As relevant here, one of these
considerations is that “[c]ertain tasks are so fundamental to management’s ability to run a
company on a day-to-day basis that they could not, as a practical matter, be subject to direct
shareholder oversight.”
The 1998 Release further distinguishes proposals pertaining to ordinary business matters from
those involving “significant social policy issues,” the latter of which are not excludable under
Rule 14a-8(i)(7) because they “transcend the day-to-day business matters and raise policy issues
so significant that it would be appropriate for a shareholder vote.” Id. (citing Exchange Act
Release No. 12999 (Nov. 22, 1976)). In this regard, when assessing proposals under Rule
14a-8(i)(7), the Staff considers the terms of the resolution and its supporting statement as a
whole. See Staff Legal Bulletin No. 14C (“SLB 14C”), part D.2 (June 28, 2005) (“In
determining whether the focus of these proposals is a significant social policy issue, we consider
both the proposal and the supporting statement as a whole.”)
A stockholder proposal being framed in the form of a request for a report does not change the
nature of the proposal. The Commission has stated that a proposal requesting the dissemination
of a report may be excludable under Rule 14a-8(i)(7) if the subject matter of the report is within
the ordinary business of the issuer. See Exchange Act Release No. 20091 (Aug. 16, 1983) (the
“1983 Release”). In addition, the Staff has indicated that “[where] the subject matter of the
additional disclosure sought in a particular proposal involves a matter of ordinary business . . . it
may be excluded under rule 14a-8(i)(7).” Johnson Controls, Inc. (avail. Oct. 26, 1999).
Here, taking the Proposal and its supporting statement as a whole, the Company may exclude the
Proposal pursuant to Rule 14a-8(i)(7) because it deals with matters relating to the Company’s
ordinary business operations—the impact of government regulation and other public policies on
the Company’s portfolio and management’s oversight of financial planning and investing. As
discussed in more detail below, the Staff has concurred with the exclusion of similar stockholder
proposals under Rule 14a-8(i)(7). Further, regardless of whether the Proposal is framed in the
context of a significant policy issue, the entire Proposal is excludable because it addresses
ordinary business matters.

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A.

The Proposal Relates To The Company’s Assessment Of The Impact Of
Government Regulation.

The Proposal requests a report on the impact on the Company’s assets and investment strategy
of, among other things, “public policies.” In this respect, the Proposal is similar to others that
the Staff concurred could be excluded under Rule 14a-8(i)(7). In General Electric (avail.
Jan. 30, 2007), the proposal requested a report on legislative initiatives affecting the Company,
including the Company’s plans to “reduc[e] the impact on the Company of: unmeritorious
litigation (lawsuit/tort reform); unnecessarily burdensome laws and regulations (e.g., SarbanesOxley reform); and taxes on the Company (i.e., tax reform).” The Staff concurred that the
proposal could be excluded under Rule 14a-8(i)(7) because it involved evaluating the impact of
government regulation on the Company. See also, Citigroup Inc. (avail. Feb. 5, 2007); Bank of
America Corp. (avail. Jan 31, 2007); Pfizer Inc. (avail. Jan 31, 2007) (same).
Similarly, in Yahoo! Inc. (avail. Apr. 5, 2007) and Microsoft Corp. (avail. Sept. 29, 2006), the
Staff concurred in the exclusion of proposals calling for an evaluation of the impact on the
company of expanded government regulation of the Internet. Additionally, in General Electric
Co. (avail. Jan. 17, 2006), the Staff concluded that a proposal relating to a report on the impact of
a flat tax was properly excludable under Rule 14a-8(i)(7) as relating to the Company’s “ordinary
business operations (i.e., evaluating the impact of a flat tax on GE).” See also Verizon
Communications Inc. (avail. Jan. 31, 2006) (same); Citigroup Inc. (avail. Jan. 26, 2006) (same);
Johnson & Johnson (avail. Jan. 24, 2006) (same). Likewise, in Pepsico, Inc. (avail. Mar. 7,
1991), the Staff concurred that a stockholder proposal calling for an evaluation of the impact on
the company of various health care reform proposals being considered by federal policy makers
could be excluded from the company’s proxy materials in reliance on Rule 14a-8(i)(7). See also
Niagara Mohawk Holdings, Inc. (avail. Mar. 5, 2001) (permitting exclusion under the
predecessor to Rule 14a-8(i)(7) of a proposal requesting that the company prepare a report on
pension-related issues being considered in federal regulatory and legislative proceedings);
Electronic Data Systems Corp. (avail. Mar. 24, 2000) (concurring in the exclusion of a similar
proposal under Rule 14a-8(i)(7)).
As in the precedent above, the Proposal requests that management review and report on the 25
year impact on the Company’s investments and capital expenditures of hypothetical public
policies that are consistent with limiting global warming. The Company’s assessment of and
response to legislative, regulatory and other public policy initiatives that are known and capable
of being assessed, even if they happen to be “consistent with” limiting global warming, impacts
many aspects of the Company’s business and is a customary and important responsibility of
management. The Company devotes significant time and resources to monitoring its compliance
with existing laws and regulations, and evaluating the potential impact of proposed laws and
regulations. This process involves the study of a number of concrete factors, including the

 Page 12

dynamics of public policy formulation in the jurisdictions in which the Company operates, the
evaluation of potential responses to such regulations by the Company and its competitors, and
the anticipated effect of public policies on the Company’s financial position and stockholder
value. Likewise, these assessments implicate Company decisions on whether to participate in
the public policy development process, which themselves involve complex decisions implicating
the use of corporate resources and the interaction of such efforts with other public policy
communications by the Company. Stockholders are not positioned to make such judgments.
Rather, determining appropriate responses to and assessing the impact of such reforms are
matters more appropriately addressed by management. And in point of fact, the Company’s
management routinely makes such assessments, based on public policies and technology that is
known and understood at the time, when determining to develop its diverse portfolio of assets
with regard to fuel types and to invest significant amounts into renewable technologies, such as
wind, solar, hydro and batteries, and when developing its budgets and valuing assets as part of its
financial planning process. Accordingly, as with the precedent cited above, the Proposal seeks to
subject to stockholder oversight ordinary business assessments which are within the scope of
Rule 14a-8(i)(7).
B.

The Proposal Is Excludable Because It Implicates Management’s Oversight Of
Financial Planning And Investing.

The Proposal is excludable under Rule 14a-8(i)(7) because the action requested implicates
management’s oversight of financial planning and investing, which is a matter directly related to
the Company’s ordinary business operations. The Proposal seeks a report on the “impacts on the
company’s portfolio of public policies and technological advances . . . .” The Supporting
Statement indicates that the report should also assess the resilience of the Company’s portfolio
under a scenario of reduced demand and goes on to request that the report assess “the impacts on
the company’s . . . planned capital expenditures through 2040 and address the financial risks
associated with such a scenario.” While certain requirements for the requested report are not
clearly explained by the Proposal and Supporting Statement, it is clear that the report would
implicate the Company’s financial reporting and planning activities and investment initiatives. It
would reach not only the company’s current financial planning, but also its estimated useful lives
for its properties and its planned expenditures for the next 25 years. However, assessing the
valuation and useful lives of corporate assets, including whether they have or might be impaired
as a result of various developments, and planning capital expenditures are a central and routine
aspect of management’s oversight over the Company’s day-to-day operations and its long-term
financial planning and investment decisions. Because the report would focus on management’s
financial reporting and strategic financial planning and investing, exclusion of the proposal
pursuant to Rule 14-8(i)(7) is warranted.

 Page 13

The Staff has consistently concurred in the exclusion of stockholder proposals that ask the
company to prepare a report that addresses the financial and economic risks associated with its
operations. In Exxon Mobil Corp. (avail. March 6, 2012), the company received a proposal
requesting a report on “possible short and long term risks to the company’s finances and
operations” related to the company’s oil sands operation. The proposal sought a review of the
risks “posed by the environmental, social and economic challenges associated with the oil
sands.” The company argued that “[a]ssessing financial and operational risks posed by the
challenges associated with oil sands [was] an intricate process” and decisions related to the oil
sands were “fundamental to management’s ability to run the Company on a day-to-day basis . . .
.” The Staff permitted the exclusion of the proposal because it “addresse[d] the ‘economic
challenges’ associated with the oil sands and [did] not, in [the Staff’s] view, focus on a
significant policy issue.”
Similarly, the Staff in FLIR Systems, Inc. (avail. Dec. 2012) concurred with the exclusion of a
proposal that requested a report “describing the company’s short- and long-term strategies on
energy use management.” The proposal indicated that the report should include “a
company-wide review of the policies, practices, and metrics related to FLIR System’s energy
management strategy.” The company argued that “the central action sought by the [p]roposal is
a re-evaluation of how FLIR invests in energy technology relating to the day-to-day operation of
its facilities, how it implements its growth strategy, and how it weighs risk and reward with
respect to its investments.” The Staff concluded that the proposal focused “primarily on FLIR’s
strategies for managing its energy expenses,” and concurred that its exclusion was warranted
because “[p]roposals that concern the manner in which a company manages its expenses are
generally excludable under rule 14a-8(i)(7).”
As with the precedents discussed above, the Proposal seeks “an assessment . . . of the long term
impacts on the company’s portfolio of public policies and technological advances . . . .” The
Supporting Statement calls for the report to discuss the impact on “planned capital expenditures”
and the “financial risks” associated with related changes in demand through the year 2040. Just
as in Exxon Mobil, where the Staff concurred with exclusion because the requested report related
to “economic challenges” associated with the company’s operations, exclusion is warranted here
because the requested report relates to “financial risks” associated with the Company’s
operations. Similarly, just as in FLIR Systems, where the Staff concurred in exclusion because
the report concerned the manner in which the company managed its expenses, exclusion is
appropriate here because the Proposal seeks a report concerning “planned capital expenditures.”
Because these are matters of ordinary business operations, they may be excluded under Rule
14a-8(i)(7).

 Page 14

C.

Regardless Of Whether The Proposal Touches Upon A Significant Policy Issue,
The Entire Proposal Is Excludable Because It Addresses Ordinary Business
Matters.

The precedent set forth above demonstrates that the Proposal addresses ordinary business matters
and therefore is excludable under Rule 14a-8(i)(7). While the Staff has found proposals
addressing the issue of climate change to implicate significant policy issues, the Proposal is
distinguishable from those past proposals because it is not limited to the significant policy issue
of climate changes but instead focuses on day-to-day business issues.
The Proposal is distinguishable from other recent proposals where the Staff has declined to find
that the requested report implicates ordinary business matters. In Apple Inc. (avail. Dec. 29,
2014), stockholders requested a report “disclosing the risk to the company posed by possible
changes in federal, state or local government policies in the United States relating to climate
change and/or renewable energy.” Similarly, in General Electric Company (avail. Feb. 8, 2011),
stockholders requested a “report disclosing the business risk related to developments in the
scientific, political, legislative and regulatory landscape regarding climate change.” The Staff
did not concur with the companies’ arguments that those proposals could be excluded on
Rule 14a-8(i)(7) grounds. However, those proposals each sought a general assessment
comparable to what is required to be disclosed in a company’s Management’s Discussion and
Analysis of Financial Condition and Results of Operations pursuant to the Commission’s
interpretive release entitled “Commission Guidance Regarding Disclosure Related to Climate
Change,” Securities Act Rel. No. 9106 (Feb. 8, 2010). In contrast, the Proposal seeks disclosure
of the financial impact on the Company’s assets and capital expenditures from a specified
hypothetical (public policies and technological advances that are consistent with limiting global
warming to no more than 2 degrees Celsius over pre-industrial levels). As a result, the Proposal
does not focus on the issue of climate change, but instead focuses on the day-to-day business
matters of assessing the impact of government regulation and oversight of financial planning and
investing.
In this respect, the Proposal is comparable to the one considered by the Staff in Exxon Mobil
Corp. (avail. March 6, 2012), which as discussed above, requested a report on “possible short
and long term risks to the company’s finances and operations” related to the company’s oil sands
operation. The Staff granted no-action relief under Rule 14a-8(i)(7) and noted that “the proposal
addresses the ‘economic challenges’ associated with the oil sands and does not, in [the Staff’s]
view, focus on a significant policy issue.” Similarly, in FirstEnergy Corp. (avail. Mar. 8, 2013),
despite the facts that matters of energy efficiency and renewable energy are viewed as a
significant policy issue, the Staff permitted exclusion of a proposal seeking a report on actions
the company could take to “reduce risk throughout its energy portfolio by diversifying the
[c]ompany’s energy resources to include increased energy efficiency and renewable energy

 Page 15

resources.” These letters are consistent with the Staff’s position in many other instances where
the context of a proposal touches upon a significant policy issue, but the proposal itself addresses
day-to-day business matters. For example, the proposal in PetSmart, Inc. (avail. Mar. 24, 2011)
requested that the board require its suppliers to certify they had not violated “the Animal Welfare
Act, the Lacey Act, or any state law equivalents,” the principal purpose of which related to
preventing animal cruelty. The Staff granted no-action relief under Rule 14a-8(i)(7) and stated,
“Although the humane treatment of animals is a significant policy issue, we note your view that
the scope of the laws covered by the proposal is ‘fairly broad in nature from serious violations
such as animal abuse to violations of administrative matters such as record keeping.’” See also
Mattel, Inc. (avail. Feb. 10, 2012) (concurring in the exclusion of a proposal that requested the
company require its suppliers publish a report detailing their compliance with the International
Council of Toy Industries Code of Business Practices, noting that the ICTI encompasses “several
topics that relate to . . . ordinary business operations and are not significant policy issues”);
JPMorgan Chase & Co. (avail. Mar. 12, 2010) (concurring in the exclusion of a proposal that
requested the adoption of a policy barring future financing of companies engaged in a particular
practice that impacted the environment because the proposal addressed “matters beyond the
environmental impact of JPMorgan Chase’s project finance decisions”).
Here, by requesting an assessment of the long term impact of public policies and technological
advances on the Company’s assets and planned capital expenditures through 2040, the focus of
the Proposal fails to transcend ordinary business matters. Assessing the impact of regulation and
overseeing financing planning and investing are core to the business of the Company. Like the
proposals in Exxon Mobil, First Energy, PetSmart, Mattel and JPMorgan Chase, where
companies were permitted to exclude proposals that implicated ordinary business issues, the
Proposal’s focus on government regulation and financial planning and investing implications of a
specific scenario fails to transcend the Company’s ordinary business operations. Accordingly,
the Proposal may be excluded under Rule 14a-8(i)(7).
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur that it will take
no action if the Company excludes the Proposal from its 2016 Proxy Materials.
We would be happy to provide you with any additional information and answer any questions
that you may have regarding this subject. Correspondence regarding this letter should be sent to
zafar.hasan@aes.com. If we can be of any further assistance in this matter, please do not hesitate
to call me at (703) 682-1110 or Ronald O. Mueller of Gibson, Dunn & Crutcher LLP at
(202) 955-8671.

 AES

we are the energy

mcerI

s

~~

~

1

Vice-President & Chief Corporate Counsel

Enclosures
cc:

Ronald 0 . Mueller, Gibson, Dunn & Crutcher LLP
Pat Zerega, Mercy Investment Services, Inc.
Rev. William Somplatsky-Jarman, The Board of Pensions of the Presbyterian Church (USA)

 EXHIBIT A

MERCY
INVESTMENT
SER\'ICF~ .

INC

November 5, 2015
AES Corporation
Attn: Brian A. Miller, Executive Vice President,
General Counsel, and Corporate Secretary
4300 Wilson Boulevard
Arlington, Virginia 22203
Dear Mr. Miller
Mercy Investment Services, Inc. (Mercy) is the investment program of the Sisters of Mercy of the Americas has
long been concerned not only with the financial returns of its investments, but also with the social and ethical
implications of its investments. We believe that a demonstrated corporate responsibility in matters of the
environment, social and governance concerns fosters long-term business success. Mercy Investment Services,
Inc., a long-term investor, is currently the beneficial owner of shares of AES Corporation.
As shareholders, we are concerned about the risks created by climate change and the actions our company is
taking to mitigate these risks. AES continues to be dependent on coal fired power plants which generate high
levels of greenhouse gas emissions.
Mercy Investment Services, Inc. is filing the enclosed shareholder proposal entitled, "Energy Policy Impact"
for inclusion in the 2016 proxy statement, in accordance with Rule 14a-8 of the General Rules and
Regulations of the Securities Exchange Act of 1934. Mercy Investment Services, Inc. has been a shareholder
continuously for more than one year holding at least $2000 in market value and will continue to invest in at
least the requisite number of shares for proxy resolutions through the annual shareholders' meeting. A
representative of the filers will attend the Annual Meeting to move the resolution as required by SEC rules.
The verification of ownership is being sent to you separately by our custodian, a OTC participant. Mercy is
co-lead with Ceres.
We look forward to having more productive conversations with the company. Please direct your responses
to me via my contact information below.
Best regards,

~-~0---Pat Zerega
Senior Director of Shareholder Advocacy
2039 North Geyer Road
St. Louis, Missouri 63131
412-414-3587
pzerega@m ercyinvestments.org

2039 North Geyer Road · St. Louis, Misso u ri 63131-3332 · 314.909.4609 · 314.909.4694 (fax)
www.mercyin vestrnentservices.org

 Energy Policy Impact
WHEREAS:
As long-term shareholders in the AES Corporation, we are concerned about whether AES
is taking steps necessary to generate continued value for shareholders as energy demand
and energy policies change. The risks presented by climate change and actions to mitigate
and adapt to it will have significant impacts on the demand for, costs of, and risks
associated with power generation.
Recognizing the severe and pervasive economic and societal risks associated with a
warming climate, global governments have agreed that increases in global temperature
should be held below 2 degrees Celsius over pre-industrial levels (Cancun Agreement).
Countries have also agreed to establish a legally binding treaty to reduce greenhouse gas
emissions by 2015 (Durban Platform).
AES is among the top 25 largest emitters of carbon dioxide in the United States. 86% of
the power generated by AES in the United States is produced at coal-fired power plants.
AES has recognized in its disclosures to the Securities and Exchange Commission that
"[fJoreign, federal, state or regional regulation of GHG emissions could have a material
adverse impact on the Company's financial performance," and that "projects under
construction or development when completed will increase emissions of our portfolio and
therefore could increase the risks associated with regulation of GHG emissions."
Nonetheless, according to a recent presentation, AES continues to plan to spend 56% of
its $6.9 billion in planned capital expenditures from 2015-2018 on coal-fired power
projects. Coal-fired power plants generate high levels of greenhouse gas emissions and
are therefore most likely to be impacted by global, federal, state and local policies to curb
climate change.
RESOLVED: Shareholders request that AES, with board oversight, publish an
assessment (at reasonable cost and omitting proprietary information) of the long term
impacts on the company's portfolio of public policies and technological advances that are
consistent with limiting global warming to no more than 2 degrees Celsius over preindustrial levels.
SUPPORTING STATEMENT: Such report should assess the resilience of AES's
portfolio including under a scenario in which reduction in demand results from carbon
restrictions and related rules adopted by governments consistent with the globally agreed
upon 2 degree target accompanied by continued cost reductions in clean energy
technologies (such as the IEA's 450ppm scenario). The report should assess the impacts
on the company's full portfolio of power generation assets and planned capital
expenditures through 2040 and address the financial risks associated with such a
scenario.
The report should be issued by December 2016

 ~BNY
· MELLON
November 5, 2015
Brian A. Miller, Executive Vice President,
General Counsel and Corporate Secretary
AES Corporation
4300 Wilson Boulevard
Arlington, Virginia 22203
Re: Mercy Investment Services Inc.

Dear Mr. Miller,
This letter will certify that as of November 5, 2015 The Bank of New York Mellon held
for the beneficial interest of Mercy Investment Services Inc., 2,484 shares of AES
Corporation.
We confirm that Mercy Investment Services Inc., has beneficial ownership of at least
$2,000 in market value of the voting securities of AES Corporation and that such
beneficial ownership has existed for one or more years in accordance with rule l 4a8(a)( 1) of the Securities Exchange Act of 1934.
Further, it is the intent to hold at least $2,000 in market value through the next annual
meeting.
Please be advised, The Bank of New York Mellon is a DTC Participant, whose DTC
number is 0954.
If you have any questions please feel free to give me a call.

Sincerely,

~~{i'f~

Vice President, Service Director
BNY Mellon Asset Servicing

Phone: (412)234-8822
Email: thomas.mcnaJly@bnymellon.com

 Zafar A. Hasan
Vice President and Chief Corporate
Counsel

tel

The AES Corporation
4300 Wilson Boulevard
Arlington, VA 22203
1 703 682 1100
Zafar.Hasan@aes.com
www.aes.com

November 12, 2015
VIA OVERNIGHT MAIL
Mercy Investment Services, Inc.
2039 North Geyer Road
St. Louis, Missouri 63131
Attention: Pat Zerega, Senior Director of Shareholder Advocacy
Dear Ms. Zerega:
I am writing on behalf of AES Corporation (the “Company”), which received on
November 6, 2015, your stockholder proposal entitled “Energy Policy Impact” submitted
pursuant to Securities and Exchange Commission (“SEC”) Rule 14a-8 for inclusion in the proxy
statement for the Company’s 2016 Annual Meeting of Stockholders (the “Proposal”).
The Proposal contains certain procedural deficiencies, which SEC regulations require us
to bring to your attention. Rule 14a-8(b) under the Securities Exchange Act of 1934, as
amended, provides that stockholder proponents must submit sufficient proof of their continuous
ownership of at least $2,000 in market value, or 1%, of a company’s shares entitled to vote on
the proposal for at least one year as of the date the stockholder proposal was submitted. The
Company’s stock records do not indicate that you are the record owner of sufficient shares to
satisfy this requirement. In addition, to date we have not received adequate proof that you have
satisfied Rule 14a-8’s ownership requirements as of the date that the Proposal was submitted to
the Company. The November 5, 2015 letter from BNY Mellon Asset Servicing that you
provided is insufficient because it does not state that the shares were held continuously during
the requisite one-year period preceding and including November 5, 2015, but instead states only
that such ownership has existed for one or more years.
To remedy this defect, you must obtain a new proof of ownership letter verifying your
continuous ownership of the requisite number of Company shares for the one-year period
preceding and including November 5, 2015, the date the Proposal was submitted to the
Company. As explained in Rule 14a-8(b) and in SEC staff guidance, sufficient proof must be in
the form of:
(1) a written statement from the “record” holder of your shares (usually a broker or a
bank) verifying that you continuously held the requisite number of Company shares
for the one-year period preceding and including November 5, 2015; or

 Mercy Investment Services, Inc.
November 12, 2015
Page 2
(2) if you have filed with the SEC a Schedule 13D, Schedule 13G, Form 3, Form 4 or
Form 5, or amendments to those documents or updated forms, reflecting your
ownership of the requisite number of Company shares as of or before the date on
which the one-year eligibility period begins, a copy of the schedule and/or form, and
any subsequent amendments reporting a change in the ownership level and a written
statement that you continuously held the requisite number of Company shares for the
one-year period.
If you intend to demonstrate ownership by submitting a written statement from the
“record” holder of your shares as set forth in (1) above, please note that most large U.S. brokers
and banks deposit their customers’ securities with, and hold those securities through, the
Depository Trust Company (“DTC”), a registered clearing agency that acts as a securities
depository (DTC is also known through the account name of Cede & Co.). Under SEC Staff
Legal Bulletin No. 14F, only DTC participants are viewed as record holders of securities that are
deposited at DTC. You can confirm whether your broker or bank is a DTC participant by asking
your broker or bank or by checking DTC’s participant list, which is available at
http://www.dtcc.com/~/media/Files/Downloads/client-center/DTC/alpha.ashx. In these
situations, stockholders need to obtain proof of ownership from the DTC participant through
which the securities are held, as follows:
(1) If your broker or bank is a DTC participant, then you need to submit a written
statement from your broker or bank verifying that you continuously held the requisite
number of Company shares for the one-year period preceding and including
November 5, 2015.
(2) If your broker or bank is not a DTC participant, then you need to submit proof of
ownership from the DTC participant through which the shares are held verifying that
you continuously held the requisite number of Company shares for the one-year
period preceding and including November 5, 2015. You should be able to find out
the identity of the DTC participant by asking your broker or bank. If your broker is
an introducing broker, you may also be able to learn the identity and telephone
number of the DTC participant through your account statements, because the clearing
broker identified on your account statements will generally be a DTC participant. If
the DTC participant that holds your shares is not able to confirm your individual
holdings but is able to confirm the holdings of your broker or bank, then you need to
satisfy the proof of ownership requirements by obtaining and submitting two proof of
ownership statements verifying that, for the one-year period preceding and including
November 5, 2015, the requisite number of Company shares were continuously held:
(i) one from your broker or bank confirming your ownership, and (ii) the other from
the DTC participant confirming the broker or bank’s ownership.
The SEC’s rules require that your response to this letter be postmarked or transmitted
electronically no later than 14 calendar days from the date you receive this letter. Please address
any response to me at The AES Corporation, 4300 Wilson Boulevard, Arlington, VA 22203.

 AES

we are t he energy

If you have any questions with respect to the foregoing, please contact me at (703) 682-1110.
For your reference, I enclose a copy of Rule 14a-8 and Staff Legal Bulletin No. 14F.

Sincerely,

)~

.san
r sident and Chief Corporate Counsel

Enclosures

 ./fl>..

BNY MELLON

November 5, 2015
Brian A. Miller, Executive Vice President,
General Counsel and Corporate Secretary
AES Corporation
4300 Wilson Boulevard
Arlington, Virginia 22203
Re: Mercy Investment Services Inc.

Dear Mr. Miller,
This letter will certify that as of November 5, 2015 The Bank of New York Mellon held
for the beneficial interest of Mercy Investment Services Inc. , 2,484 shares of AES
Corporation.
We confirm that Mercy Investment Services Inc. , has beneficial ownership of at least
$2,000 in market value of the voting securities of AES Corporation and that such
beneficial ownership has existed continuously for one or more years in accordance with
rule 14a-8(a)(l) of the Securities Exchange Act of 1934.
Further, it is the intent to hold at least $2,000 in market value through the next annual
meeting.
Please be advised, The Bank of New York Mellon is a DTC Participant, whose DTC
number is 0954.
If you have any questions please feel free to give me a call.

Sincerely,

;l,_; 1~

Thomas J. McNally 1
Vice President, Service Director
BNY Mellon Asset Servicing

Phone: (412) 234-8822
Email : thomas.mcnally @bnymellon.com

 PRESBYTERIAN MISSION AGENCY BOARD

PRESBYTERIAN CHURCH (U.S.A.)

COMPASSION, PEACE AND JUSTICE

VIA OVERNIGHT DELIVERY

November 6, 2015
Mr. Brian A. Miller
Executive Vice President, General Counsel and Corporate Secretary
AES Corporation
4300 Wilson Boulevard
Arlington, VA 22203
Dear Mr. Miller:
The Presbyterian Church (USA) is a major Protestant denomination with nearly 2.3 million
members. Our General Assembly believes its investments should promote its mission goals, and
reflect its ethical values such as caring for the environment. The Committee on Mission
Responsibility Through Investment (MRTI) was created to implement this policy. The General
Assembly has worked on climate change since 1990, and has called for reduction of emissions in
our church buildings, international agreements and adoption of reduction targets by corporations.
The Board of Pensions of the Presbyterian Church (USA) is the beneficial owner of 250 shares
of AES Corporation common stock. The enclosed shareholder proposal, along with its
supporting statement, has been submitted by Mercy Investment Services for consideration and
action at your 2016 Annual Meeting. We are co-filing this resolution, and authorize Ms. Pat
Zerega to act as our representative regarding the resolution.
In accordance with SEC Regulation 14A-8 of the Securities and Exchange Commission
Guidelines, the Board of Pensions has continuously held AES Corporation shares for at least one
year prior to the date of this filing. Proof of ownership from BNY Mellon Asset Servicing, the
master custodian, will be forwarded separately. The Board will maintain the SEC-required
ownership position of AES Corporation stock through the date of the Annual Meeting where our
shares will be represented.
Sincerely yours,

1J ;Ji,A.,..

s_I' j,.;drJ......,__

Rev. William Somplatsky-Jarman
Coordinator for Mission Responsibility Through Investment
Enclosure: 2016 AES Corporation Shareholder Resolution
Cc:

Ms. Elizabeth "Terry" Dunning, MRTI Chairperson
Mr. George Philips, MRTI Vice Chairperson
100 Witherspoon Street · Louisville, KY · 40202-1396 · 502-569-5809 · FAX 502-569-8963
Toll-free: 888-728-7228 ext. 5809 · Toll-free fax: 800-392-5788

 2016 AES Corporation Resolution on Energy Policy Impact
WHEREAS:
As long-term shareholders in the AES Corporation, we are concerned about whether AES
is taking steps necessary to generate continued value for shareholders as energy demand
and energy policies change. The risks presented by climate change and actions to mitigate
and adapt to it will have significant impacts on the demand for, costs of, and risks
associated with power generation.
Recognizing the severe and pervasive economic and societal risks associated with a
warming climate, global governments have agreed that increases in global temperature
should be held below 2 degrees Celsius over pre-industrial levels (Cancun Agreement).
Countries have also agreed to establish a legally binding treaty to reduce greenhouse gas
emissions by 2015 (Durban Platform).
AES is among the top 25 largest emitters of carbon dioxide in the United States. 86% of
the power generated by AES in the United States is produced at coal-fired power plants.
AES has recognized in its disclosures to the Securities and Exchange Commission that
"[f]oreign, federal, state or regional regulation of GHG emissions could have a material
adverse impact on the Company' s financial performance," and that "projects under
construction or development when completed will increase emissions of our portfolio and
therefore could increase the risks associated with regulation of GHG emissions."
Nonetheless, according to a recent presentation, AES continues to plan to spend 56% of
its $6.9 billion in planned capital expenditures from 2015-2018 on coal-fired power
projects. Coal-fired power plants generate high levels of greenhouse gas emissions and
are therefore most likely to be impacted by global, federal , state and local policies to curb
climate change.
RESOLVED: Shareholders request that AES, with board oversight, publish an
assessment (at reasonable cost and omitting proprietary information) of the long term
impacts on the company' s portfolio of public policies and technological advances that are
consistent with limiting global warming to no more than 2 degrees Celsius over preindustrial levels.
SUPPORTING STATEMENT: Such report should assess the resilience of AES ' s
portfolio including under a scenario in which reduction in demand results from carbon
restrictions and related rules adopted by governments consistent with the globally agreed
upon 2 degree target accompanied by continued cost reductions in clean energy
technologies (such as the IEA's 450ppm scenario). The report should assess the impacts
on the company's full portfolio of power generation assets and planned capital
expenditures through 2040 and address the financial risks associated with such a
scenario.
The report should be issued by December 2016

 Zafar A. Hasan
Vice President and Chief Corporate
Counsel

tel

The AES Corporation
4300 Wilson Boulevard
Arlington, VA 22203
1 703 682 1100
Zafar.Hasan@aes.com
www.aes.com

November 12, 2015
VIA OVERNIGHT MAIL
The Board of Pensions of the Presbyterian Church (USA)
100 Witherspoon Street
Louisville, KY 40202-1396
Attention: Rev. William Somplatsky-Jarman
Dear Rev. Somplatsky-Jarman:
I am writing on behalf of AES Corporation (the “Company”), which received on
November 9, 2015, your stockholder proposal entitled “2016 AES Corporation Resolution on
Energy Policy Impact” submitted pursuant to Securities and Exchange Commission (“SEC”)
Rule 14a-8 for inclusion in the proxy statement for the Company’s 2016 Annual Meeting of
Stockholders (the “Proposal”).
The Proposal contains certain procedural deficiencies, which SEC regulations require us
to bring to your attention. Rule 14a-8(b) under the Securities Exchange Act of 1934, as
amended, provides that stockholder proponents must submit sufficient proof of their continuous
ownership of at least $2,000 in market value, or 1%, of a company’s shares entitled to vote on
the proposal for at least one year as of the date the stockholder proposal was submitted. The
Company’s stock records do not indicate that you are the record owner of sufficient shares to
satisfy this requirement. In addition, to date we have not received proof that you have satisfied
Rule 14a-8’s ownership requirements as of the date that the Proposal was submitted to the
Company.
To remedy this defect, you must submit sufficient proof of your continuous ownership of
the requisite number of Company shares for the one-year period preceding and including
November 6, 2015, the date the Proposal was submitted to the Company. As explained in Rule
14a-8(b) and in SEC staff guidance, sufficient proof must be in the form of:
(1) a written statement from the “record” holder of your shares (usually a broker or a
bank) verifying that you continuously held the requisite number of Company shares
for the one-year period preceding and including November 6, 2015; or
(2) if you have filed with the SEC a Schedule 13D, Schedule 13G, Form 3, Form 4 or
Form 5, or amendments to those documents or updated forms, reflecting your
ownership of the requisite number of Company shares as of or before the date on
which the one-year eligibility period begins, a copy of the schedule and/or form, and

 The Board of Pensions of the Presbyterian Church
(USA)
November 12, 2015
Page 2

any subsequent amendments reporting a change in the ownership level and a written
statement that you continuously held the requisite number of Company shares for the
one-year period.
If you intend to demonstrate ownership by submitting a written statement from the
“record” holder of your shares as set forth in (1) above, please note that most large U.S. brokers
and banks deposit their customers’ securities with, and hold those securities through, the
Depository Trust Company (“DTC”), a registered clearing agency that acts as a securities
depository (DTC is also known through the account name of Cede & Co.). Under SEC Staff
Legal Bulletin No. 14F, only DTC participants are viewed as record holders of securities that are
deposited at DTC. You can confirm whether your broker or bank is a DTC participant by asking
your broker or bank or by checking DTC’s participant list, which is available at
http://www.dtcc.com/~/media/Files/Downloads/client-center/DTC/alpha.ashx. In these
situations, stockholders need to obtain proof of ownership from the DTC participant through
which the securities are held, as follows:
(1) If your broker or bank is a DTC participant, then you need to submit a written
statement from your broker or bank verifying that you continuously held the requisite
number of Company shares for the one-year period preceding and including
November 6, 2015.
(2) If your broker or bank is not a DTC participant, then you need to submit proof of
ownership from the DTC participant through which the shares are held verifying that
you continuously held the requisite number of Company shares for the one-year
period preceding and including November 6, 2015. You should be able to find out
the identity of the DTC participant by asking your broker or bank. If your broker is
an introducing broker, you may also be able to learn the identity and telephone
number of the DTC participant through your account statements, because the clearing
broker identified on your account statements will generally be a DTC participant. If
the DTC participant that holds your shares is not able to confirm your individual
holdings but is able to confirm the holdings of your broker or bank, then you need to
satisfy the proof of ownership requirements by obtaining and submitting two proof of
ownership statements verifying that, for the one-year period preceding and including
November 6, 2015, the requisite number of Company shares were continuously held:
(i) one from your broker or bank confirming your ownership, and (ii) the other from
the DTC participant confirming the broker or bank’s ownership.
The SEC’s rules require that your response to this letter be postmarked or transmitted
electronically no later than 14 calendar days from the date you receive this letter. Please address
any response to me at The AES Corporation, 4300 Wilson Boulevard, Arlington, VA 22203.

 AES

we are the energy

If you have any questions with respect to the foregoing, please contact me at (703) 682-1110.
For your reference, I enclose a copy of Rule 14a-8 and Staff Legal Bulletin No. 14F.

cc:

Pat Zerega, Senior Director of Shareholder Advocacy, Mercy Investment Services, Inc.

Enclosures

 ~·

BNY MELLON
ASS ET SERV ICING

November 10, 2015
Mr. Brian A. Miller
Executive Vice President, General Counsel
and Corporate Secretary
AES Corporation
4300 Wilson Boulevard
Arlington, VA 22203

Dear Mr. Miller,
This letter is to verify that the Board of Pensions of the Presbyterian Church
(U.S.A.) is the beneficial owner of 250 shares of AES Corporation as of
November 6, 2015, the day the filing letter was sent, and November 9, 2015, the
day you received the filing letter. This stock position is valued at over
$2,000.00, and has been held continuously for over one year prior to the date of
the filing of the shareholder resolution.
The resolution is being filed under the name of the Presbyterian Church
(U.S.A.), 100 Witherspoon Street, Louisville, Kentucky 40202.
Please feel free to contact me if you need any additional information related to this
information.

Sincerely,

1./LiJflL

;;,,__~rd_,

JuC:lith Underwood
Vice President
BNY Mellon Asset Servicing
CC: Donald Walker
Board of Pensions of the Presbyterian Church

500 Grant Street, BNY Mellon Center, Suite 0625, Pittsburgh, PA 15258