Originally published by Union of Concerned Scientists, The Equation. By Kathy Mulvey
This week is the culmination of major oil and gas companies’ annual general meetings, also known as annual shareholder meetings. As in previous years, climate-related shareholder proposals are on the agenda for Shell, ExxonMobil and Chevron, and climate advocates are urging major investors, including BlackRock, to vote for climate action.
Two key things have changed since last year:
1) Evidence has piled up that sharp cuts in fossil fuels are needed to keep the goals of the Paris climate agreement within reach — and that major oil and gas companies’ climate claims are greenwashing.
2) Oil and gas companies are raking in record profits as Russia wages an unjust war in Ukraine.
Less shareholder support for climate proposals at BP, ConocoPhillips and other major oil and gas companies’ annual meetings earlier this month suggests that some investors may be falling for fossil fuel industry spin and deprioritizing climate action. That would be shortsighted and dangerous. According to the latest report from the UN Intergovernmental Panel on Climate Change, action between now and 2030 is most critical: Immediate, deep cuts in heat-trapping emissions are necessary across all sectors if we are to limit global warming to 1.5 degrees Celsius.
Here are four corporate annual meetings that my colleagues at the Union of Concerned Scientists (UCS) and I will be attending on the proxies of socially responsible investors, as well as a few things we will be watching for.
Shell (Tuesday, May 24, at 10 a.m. BST)
I’ll be in London on Tuesday for Shell’s annual meeting. My first in-person attendance at a shareholders’ meeting since 2019 promises some drama, with #DefundClimateChaos organizing a rally outside and conflicting climate resolutions before shareholders.
Since its last annual meeting, Shell’s climate pledges and plans have drawn intense scrutiny:
- A year ago this week in a case brought by Milieudefensie (Friends of the Earth Netherlands), a Dutch court ordered Shell to reduce global warming emissions from its operations and the use of its products by 45 percent relative to 2019 levels by 2030. Shell is appealing the ruling.
- In March, Client Earth launched a legal action against Shell’s board of directors, seeking to hold it liable for its failure to prepare the company properly for the clean energy transition.
- As part of an ongoing investigation into the oil and gas industry’s climate disinformation campaign, the US House of Representatives Committee on Oversight and Reform held a hearing last October featuring Shell USA President Gretchen Watkins and other top oil and gas industry executives and another hearing in February with experts examining Big Oil’s insufficient, self-serving climate pledges.
At last October’s hearing, Watkins and the other CEOs refused to commit to stop funding climate disinformation or efforts to block climate action, and since then none has budged an inch. In April, for example, Shell released its latest climate lobbying report that acknowledged “some misalignment” between its climate policy positions and those of several of its trade associations, including the American Petroleum Institute (API) and the US Chamber of Commerce. API is using Russia’s invasion of Ukraine as an excuse to stall or roll back the transition to renewable energy, and the US Chamber continues to lobby against climate policies, including methane regulations and the Biden administration’s Build Back Better plan. Regardless, Shell has retained its membership in both associations, claiming that it will press for change from within.
Now, Shell investors are voting on a resolution proposed by the shareholder advocacy group Follow This calling on the company to set and publish targets for reducing emissions from its operations and products that are aligned with Paris climate agreement goals.
The Shell board has recommended that shareholders vote against the resolution and instead is seeking shareholder approval of the company’s Energy Transition Progress Report 2021. But, according to an independent analysis by Global Climate Insights, under Shell’s existing strategy the company’s net carbon dioxide emissions will increase 4 percent by 2030 relative to 2019 levels.
ExxonMobil (Wednesday, May 25, at 9:30 a.m. CDT)
On Wednesday, I’ll participate in ExxonMobil’s virtual annual meeting. Last year its shareholders rebelled, replacing three members of the board of directors and voting in favor of two climate-related shareholder proposals. Since then, ExxonMobil has been publicly embarrassed by revelations by one of its top lobbyists about its deceptive lobbying and public relations strategies, had its Chair and CEO Darren Woods testify under oath before Congress about the company’s sponsorship of climate disinformation campaigns, and was spotlighted by new documentary series produced by PBS’s Frontline and Paramount Plus.
In a lackluster effort to placate shareholders’ climate concerns, the company pledged to cut carbon emissions from its oil, gas and chemicals businesses to net zero by 2050. But, by refusing to address emissions from burning its products — which make up roughly 85 percent of its total emissions — ExxonMobil is still trying to evade responsibility for its role in the climate crisis.
Shareholders have the opportunity to submit questions to ExxonMobil’s management ahead of the meeting. Retired ExxonMobil engineer Bill Hafker, who I interviewed back in 2018, posed four crucial climate questions in a recent opinion column. My UCS colleague Laura Peterson’s recent blog, which reveals that ExxonMobil’s latest lobbying disclosures omit important details, also provides fodder for shareholder inquiries.
Until the company gives satisfactory responses to questions posed by members of Congress, Hafker and Peterson, ExxonMobil shareholders should continue to press corporate decisionmakers to step up climate ambition and action. This year, that means voting for the climate-related proposals filed by Follow This and Christian Brothers Investment Services, and voting against CEO Woods and Lead Director Joseph Hooley.
To increase transparency about the oil and gas industry’s political activity at this critical juncture for US climate policy, shareholders should also support the resolution filed by the Unitarian Universalist Association calling for ExxonMobil to disclose its political spending.
Chevron (Wednesday, May 25, at 8 a.m. PDT)
UCS’s Peterson will participate virtually in Chevron’s annual meeting, where the company faces the prospect of a revolt similar to what ExxonMobil experienced last year.
Chevron has a long history of human rights abuses, environmental pollution, racial injustice, climate destruction and climate deception. This month, UCS joined Amazon Watch, Follow This, Investor Advocates for Social Justice, Majority Action, Newground Social Investment, Sierra Club, and the Sisters of St. Francis of Philadelphia to sponsor a virtual discussion titled “Chevron on Notice: How 2022 Shareholder Action Can Advance Corporate Accountability.”
I was particularly moved by the remarks of Alfredo Angulo, a community organizer with the Richmond Listening Project, who described the harm to public health from oil spills, fires and gas leaks at Chevron’s refinery — one of California’s largest polluters — during the event. Likewise, Donald Moncayo, president of the Union of Peoples Affected by Chevron/Texaco, provided powerful testimony about the company’s refusal to clean up environmental damage or pay restitution to people and communities devastated by oil pollution in the Ecuadorian Amazon.
Led by Majority Action, shareholders pointing to a failure of corporate governance are calling for the ouster of CEO Michael Wirth as board chair and Ronald Sugar as lead independent director. UCS is supporting this demand and joining event cosponsors in urging Chevron shareholders to vote for six shareholder proposals:
- Adopt medium- and long-term global warming emissions reduction targets (Item 5 on the proxy card);
- Provide independent, audited climate-related financial risk reporting (Item 6);
- Report on reliability of methane emissions disclosures (Item 7);
- Report on business with conflict-complicit governments (Item 8);
- Report on racial equity audit (Item 9); and
- Allow 10 percent of shareholders to call a special meeting of shareholders (Item 10).
BlackRock (Wednesday, May 25, at 8 a.m. EDT)
My UCS colleague Hannah Poor will participate virtually in BlackRock’s annual meeting.
BlackRock is one of the world’s largest investors in fossil fuels and owns a substantial stake in companies across every sector of the global economy, including Shell, ExxonMobil and Chevron. The asset manager has been under increasing pressure from climate activists, and faces a shareholder proposal calling for it to adopt stewardship practices designed to curtail corporate activities that externalize social and environmental costs — in other words, make corporations pay for the harms their products and actions cause.
Regardless, BlackRock appears to be moving in the wrong direction. The world’s largest asset manager changed its voting guidance to vote for fewer climate proposals this year because, it maintains, they may be unduly “prescriptive.”
As the climate crisis escalates, it’s clear that leaving major oil and gas companies to prescribe their own remedies is not resulting in action at the pace and scale necessary to limit the worst effects of climate change. Urge BlackRock to hold Chevron accountable for climate inaction by sending a message here today.
Mandatory Climate Disclosure
Shareholder votes calling for corporate transparency and climate action are necessary, but not sufficient. Investors need consistent, comparable data to make informed decisions and hold corporations accountable for their response to climate change.
That’s why the Securities and Exchange Commission (SEC) has proposed a new rule that would require publicly traded companies to disclose the amount of heat-trapping emissions their businesses produce, detail how climate impacts and the clean energy transition might affect their businesses, and publicize their plans for meeting their carbon emissions reduction targets.
The public comment period on the rule is open through June 17. Click here to send a message to the SEC supporting strong climate disclosure rules.
Earlier this month, the Philippines Commission on Human Rights concluded a nearly seven-year inquiry into the role Shell, ExxonMobil, Chevron and other major carbon producers have played in climate change impacts on the human rights of the Filipino people. The commission’s report, informed by UCS and many other experts, concluded that these companies “engaged in willful obfuscation of climate science, which has prejudiced the right of the public to make informed decisions about their products, concealing that their products posed significant harms to the environment and the climate system.” These acts, the commission said, “may be bases for liability. At the very least, they are immoral.”
Big Oil’s past and ongoing climate deception is worsening the climate crisis, harming Black, Indigenous, and people of color communities; poor and working-class communities; and communities in the Global South first and worst. This week investors have the opportunity — and responsibility — to ratchet up pressure on Shell, ExxonMobil and Chevron for climate accountability. Scientists, activists, litigators and policymakers around the world are watching, and are ready to act.
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