In what may be considered a “historic,” if largely symbolic, first, Chevron’s shareholders are sending a message to the fossil fuel giant: Make good on your climate promises — we’re watching you.
A majority of Chevron’s investors agreed Tuesday that the company must produce a report detailing how much of its lobbying efforts align with the Paris climate goals of avoiding dangerous global warming.
At the company’s annual meeting on May 26, 53% of shareholders voted in favor of the lobbying resolution, in defiance of the board’s recommendation to investors to vote against it. Chevron argued that the measure was unnecessary because it already disclosed its lobbying activities.
Oil companies like Exxon and Chevron have said they support the Paris agreement’s goal of limiting global temperature rise to 2°C (3.6°F) above preindustrial levels, but activists have long been pushing them to do more. This resolution was a call for greater transparency and reassurance that oil companies aren’t lobbying against — or funding trade organizations that actively oppose — action on climate change.
The company later said that shareholder resolutions are “advisory votes” and that it will “carefully consider” the results. A similar resolution was rejected by investors at ExxonMobil’s annual meeting.
Environmental activists are counting the successful Chevron vote as a small win in a protracted campaign to hold fossil fuel companies accountable for their impact on climate change. And they will be keeping a close eye on how the successful vote might impact other efforts. In the next two weeks, two similar resolutions on climate-related lobbying disclosures will be voted on at the annual meetings of General Motors and Caterpillar.
Commenting on the “historic 53% majority” vote, Andrew Logan, senior director of oil and gas at sustainability nonprofit Ceres, said in a statement that this “puts Chevron, and companies everywhere, on notice that investors view lobbying as a critical part of a company’s core climate strategy.”
Historically, fossil fuel companies have been criticized for spending millions lobbying against environmental regulations while green groups are typically the ones pushing lawmakers for stronger climate protections. But that doesn’t need to be the case. As Logan notes, if oil companies are serious about tackling climate change, how they lobby decision makers should reflect that.
The proposal was introduced by global asset manager BNP Paribas Asset Management, which has increasingly prioritized sustainable investments in recent years. Chevron’s second-biggest shareholder, BlackRock ― whose CEO Larry Fink said in January that the firm would avoid investments in companies that “present a high sustainability-related risk” ― also supported the resolution.
The vote comes after mounting calls for increased corporate transparency across sectors, from fossil fuels and chemical corporations to airlines and car companies. Investors with a combined $6.5 trillion in assets under management urged companies last September to ensure corporate and trade association lobbying are consistent and aligned with the goals of the Paris Agreement.
However, while the lobbying measure saw favor with Chevron shareholders, separate measures proposed at both the Chevron and Exxon meetings calling on the companies to report on the public health risks of expanding petrochemical operations in areas increasingly prone to climate change were shot down.
“Exxon and Chevron continue to give lip service to the goals of the Paris Agreement, while failing to clarify for investors if or how they will reduce their emissions in alignment with the Paris Agreement’s critical 1.5 degree Celsius goal,” Danielle Fugere, president of As You Sow, which backed the measures, said in a statement shared with HuffPost.
“Rather than meet the science head on, with proactive plans and long-term business strategies responsive to the global energy transition, Exxon and Chevron’s focus appears short term as they lag their European peers,” Fugere said. “Their actions are exacerbating the climate crisis and, in turn, putting their own operations, communities, and investors’ portfolios at risk.”
In February, British oil major BP announced arguably the most ambitious climate plan by an oil company, pledging to eliminate or offset all of its operational emissions, along with those caused by the extraction of oil and gas, by 2050. And in December, Spanish oil company Repsol vowed to go carbon neutral by 2050. Even while the announcements were praised as a step in the right direction, some activists and experts criticized the broad plans for having vague details on how the targets would be achieved.
Meanwhile, the pandemic has all too well highlighted just how precarious the fossil fuel market is right now ― oil prices plunged below zero for the first time ever in April. At the same time, renewables are proving resilient to the pandemic’s economic shocks.
This week Chevron announced that it would be cutting up to 15% of its staff worldwide as it tries to restructure, in part due to the continued economic slump.
But even before the coronavirus hit, investors were weary. This was made clear this year not just by BlackRock but also by CNBC’s Jim Cramer, host of “Mad Money,” in February. Responding to the fourth-quarter earnings reports released by oil majors showing a continued decline in stock prices, Cramer said, “I’m done with fossil fuels. They’re done. They’re just done.”
Many of Chevron’s investors seem to be of a similar mindset.
“Chevron’s investors have proven that climate risk is a real financial risk, and that how a company lobbies matters to investors in their evaluation of that risk,” concluded Ceres’s Logan. “They suspect Chevron is falling short, and they held them to account with this majority vote.”
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