Two big climate votes today at the Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) annual meetings: 33% of Chevron investors voted in support of a shareholder resolution asking the company to report on how it plans to reduce its full range of greenhouse gas emissions and transition its business model to align with a decarbonizing energy market and 25% of ExxonMobil shareholders voted in support of a shareholder resolution asking the company to issue a report assessing the public health risks of expanding petrochemical operations in areas increasingly prone to climate change-induced storms, flooding, and sea level rise.
Shareholders Strongly Support Climate Resolutions at Exxon and Chevron Annual Meetings
San Ramon, California—May 29, 2019—Today, 33% of investors at Chevron Corporation’s annual meeting voted in support of a shareholder resolution asking the company to report on how it plans to reduce its full range of greenhouse gas emissions and transition its business model to align with a decarbonizing energy market. Also today, at Exxon’s annual meeting, 25% of investors voted in support of a shareholder resolution asking the company to issue a report assessing the public health risks of expanding petrochemical operations in areas increasingly prone to climate change-induced storms, flooding, and sea level rise. Both resolutions were filed by As You Sow.
Danielle Fugere, president of As You Sow, had this to say about the Chevron vote:
“Investors need to understand whether Chevron is planning to act on the existential threat of climate change, including reducing its full greenhouse gas footprint in line with Paris goals. As one of the largest historical emitters, Chevron must take finally responsibility to dramatically reduce its greenhouse gas emissions. Unfortunately, Chevron’s latest report indicates that its planned reductions through 2023 will cut only 0.1% of its total climate footprint, a rate that is unacceptable in a world heading rapidly toward catastrophic climate impacts.”
Lila Holzman, energy program manager of As You Sow, had this to say about the Exxon vote:
“Today’s strong vote on this first-time proposal shows investors are paying attention to petrochemical industry giants like ExxonMobil, which has demonstrated that it is alarmingly underprepared to deal with the increasing severity of extreme weather events exacerbated by climate change. More must be done to assure stakeholders that community health will not be sacrificed as a result of poor planning and insufficient risk management.
“As industry puts its foot on the gas to accelerate buildout of expensive petrochemical infrastructure, investors are asking: what are the risks? Shareholders are concerned that companies are allocating significant resources to risky petrochemical investments at a time when trends show that plastic use must be limited and high-carbon operations must reduce their footprint. This concern is heightened when companies do not clearly account for increased storms, flooding, and sea level rise in their planning processes, thereby exposing themselves, their shareholders, and their communities to preventable and unacceptable risks.”
The Intergovernmental Panel on Climate Change recently issued a special report on global warming, sounding a clarion call for dramatic action to prevent catastrophic climate impacts, including the goal of reaching net zero emissions by mid-century. A large range of shareholders are responding to this call to action — from individual investors to the investor group called Climate Action 100+ (with assets under management of more than $33 trillion).
Climate change creates uncertainty and risk across nearly every economic sector. As the world warms, economic growth is projected to slow and the market to become increasingly volatile. The Wall Street Journal recently labeled PG&E the first climate change-related bankruptcy resulting in major loss of value for investors. This level of unpredictability will become more common as the climate warms.
“Shareholders recognize the growing risk to their portfolios from a warming climate and are demanding action from the energy companies they hold,” Fugere continued. “Large institutional investors in particular have a fiduciary responsibility to their beneficiaries to ensure investments in companies that create long-term value. Companies that have large climate emissions and insufficient demonstrated transition plans, are not likely to create such value.”
Some oil and gas companies are already leagues ahead in planning to align with Paris goals and thrive in a low carbon economy. Shell has announced Scope 3 greenhouse gas intensity reduction goals. Total has invested substantially in solar energy and is reducing the carbon intensity of its energy products. Equinor rebranded itself from ‘StatOil’ and is diversifying into wind and solar energy development. Orsted, previously a Danish oil and gas company, sold its oil and gas portfolio.
Environment, social, and governance (ESG) proposals earned strong shareholder support at annual meetings this year. For example, at today’s Chevron meeting, the Sisters of St. Francis earned 32% of shareholder support on their proposal for a report on the human right to water. Sister Nora Nash stated: “Chevron’s operations have an enormous impact on water rights and other climate solutions. Though it claims to have a human rights policy that addresses these concerns, the policy is nowhere near adequate — it fails to meet international human rights standards — and Chevron doesn’t even live up to its own policy commitments. Chevron must respect the human right to water.”
As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. Click here to see As You Sow’s shareholder resolution tracker.