Inside Climate News
Hot Topics:
Scott Pruitt Climate Science Clean Energy Arctic Exxon Investigation
Politics Agriculture Choke Hold
•••
Home
3 Dozen Shareholder Climate Resolutions Target Oil, Gas and Power Companies
Concerned investors want details on climate risk planning, methane and lobbying, but some executives see Trump’s embrace of fossil fuels as reason to say no.
David Hasemyer
By David Hasemyer
Mar 8, 2018
A Chevron refinery. Credit: David McNew/Getty Images
Nearly three dozen shareholder resolutions related to climate change risk have been filed this year with publicly traded oil and gas companies and electric utilities. Credit: David McNew/Getty Images
When a group of investors asked Noble Energy, Inc., to report on the risks climate change poses to its business, the company's response put on display how the Trump administration's pro-fossil-fuel stance is swaying the perennial debate.
Similar resolutions brought by concerned shareholders have won increasing investor support since the 2015 Paris climate agreement, and grudging acceptance by some in the industry.
Not Noble. The Houston-based oil and gas company urged its shareholders to vote down the resolution, and then it described its vision of an unfettered regulatory future under the Trump administration.
"The current administration and the Republican Congress have adopted policies aimed at increasing the production of domestic oil and natural gas resources and repealed or amended certain executive orders and regulatory policies that have restricted or adversely impacted development," the company wrote. "In sum, the proposal calls for a report that would be principally based on speculative assumptions about a legislative and regulatory environment that is inherently unpredictable."
Sign up for InsideClimate News Weekly
Our stories. Your inbox. Every weekend.
Nearly three dozen shareholder resolutions related to climate change risk have been filed this year with publicly traded oil and gas companies and electric utilities, to be voted on by their shareholders at annual meetings spread throughout the spring. Executives often urge shareholders to vote down such resolutions, and there are concerns this year that the administration's positions could lead to even more complacency, by both companies and their investors.
Perhaps the most susceptible to ripples of the administration's assault on climate and environment policies this year are the nearly two dozen resolutions focused on methane emissions and on the impact of measures limiting global temperature rise caused by burning fossil fuels.
Limiting Methane Emissions – or Not
At least six oil, gas and electric utility companies, including Chevron, are facing shareholder resolutions calling on executives to explain the steps they're taking to minimize emissions of methane, a short-lived climate pollutant that's one of the most potent greenhouse gases.
While investor groups raise concerns, however, the Trump administration has embarked on a mission—cheered on by organizations like the American Petroleum Institute—to roll back most of the Obama-era requirements for reducing emissions of methane from oil and gas drilling on federal land.
Companies that might be tempted to see the current administration's behavior as an excuse to delay acting on climate risks should be cautious—administrations change, and the oil and gas industry in particular is built on investments that require weighting risks decades into the future, said Danielle Fugere, president of As You Sow, a non-profit shareholder advocacy organization.
2018 Climate-Related Shareholder Resolutions: Oil and Gas Companies
"Investors today are becoming more and more sophisticated when they think about a company's sustainable future and what that means to their investments," said Fugere, whose group released a report on Thursday with Sustainable Investments Institute and Proxy Impact tracking this year's climate-related shareholder resolutions.
"Investments will be made with companies that have a plan for the future; a plan that accounts for a decarbonizing economy where companies are making adjustments to remain competitive," she said.
Assessing Risk in a 2-Degree World
A block of shareholders led by the Presbyterian Church filed the resolution asking Noble for an assessment of the impact its portfolios would face from policies and technologies that keep warming under 2 degrees Celsius.
It's one of at least 18 shareholder resolutions this year calling on oil, gas and electric utility companies to conduct a 2-degree scenario analysis.
"A 2-degree scenario analysis of Noble Energy's future plans will generate a more complete picture of current and future risks and opportunities than business-as-usual planning," the church's resolution states. "This report will help Noble identify both vulnerabilities and opportunities for its business and reassure investors that Noble is poised to manage and take advantage of future regulatory, technological and market changes."
It would be shortsighted of Noble to make decisions based on the Trump Administration's devotion to fossil fuels, said Rob Fohr, director of Faith-Based Investing and Corporate Engagement for the Presbyterian Church.
"In the short term, I can see where the company has a lot to be excited about," Fohr said. "But for the long term, it's not prudent to make plans based on the activities of one administration."
2018 Climate-Related Shareholder Resolutions: Electric Utilities
Shareholders in Kinder Morgan, the largest pipeline and petroleum storage company in North America, are similarly pressing the company for answers about how it is planning for the risks and opportunities presented by goals established by the Paris Agreement.
The company acknowledged in a 2016 filing with the U.S. Securities and Exchange Commission that "greenhouse gas regulations could have material adverse effects on our business, financial position, results of operations or cash flows." An investor group led by Zevin Asset Management wants to know what Kinder Morgan is doing about it.
"Currently, our company only provides business-as-usual planning and risk analysis, which is not sufficient to prepare for a set of risks as large and complex as climate change," the shareholder resolution states. "The requested report will reassure investors that KMI is poised to manage and take advantage of future regulatory, technological, and market changes."
More Investors – and Companies – Respond
Last year, investors in Exxon and Occidental Petroleum Corp. broke through with successful shareholder votes on resolutions seeking annual disclosures that take into account what part of a company's oil and gas portfolio remains economically viable in the face of global efforts to limit global warming. Exxon's shareholders, who had voted down similar resolutions in the past, tipped to 62 percent in favor of disclosure.
"Shareholder engagement has ratcheted up to a new level with enhanced collaborations and strategies, even as some corporate leaders determined to undercut basic shareholder rights have a sympathetic ear in Washington," Andrew Behar, CEO of As You Sow, wrote in the report on 2018 shareholder resolutions.
Under the mounting pressure, Exxon released a report earlier this year addressing the risks the company faces from climate change and from government efforts to rein in carbon dioxide emissions from fossil fuels, though some shareholders believe it fell short.
In a presentation to investment analysts Wednesday, Exxon officials discussed their projection for modest efficiency gains and shifts to lower-carbon sources over the next two decades—and for continued strong global demand for fossil fuel. "Why keep investing in the oil and gas business?" asked Pete Trelenberg, the company's manager of environmental policy and planning. "Well, because there's demand."
Occidental has pledged to also to issue a report on the risks that climate change poses to its business no later than June. And other companies, including ConocoPhillips, have voluntarily agreed to perform such assessments.
In the face of pending resolutions this year, two coal-reliant electric utilities in the Midwest—WEC Energy Group and CMS Energy Corp.—agreed to publish assessments of the long-term business impacts on their companies of limiting global warming to under 2 degrees
Oil and gas companies in particular face tremendous pressure to accurately identify long-term capital projects that are essential to the growth and prosperity of the business, Fohr said. An oil company that banks on future projects—new oil fields, new refineries—without fully calculating all risk factors puts itself and its investors in jeopardy.
"A wrong assumption about the future because of one administration's friendly oil and gas position that leads to misallocation of capital puts the company at risk for stranded assets in the future," Fohr said.
Another Worry: Where's the Lobbying Money Going?
One of the biggest shareholders demands outside of direct climate impact is for more information about companies' political lobbying. Shareholders in at least 11 oil and gas companies and electric utilities want to know how company money is being spent to influence public policy—including on climate-related issues, according to the new report and shareholder resolution tracking by Ceres.
The resolutions cite millions of dollars spent by the companies to flex their public policy muscle. Exxon and Chevron, for example, spent more than $94 million and $70 million respectively since 2010 on federal lobbying to influence political thinking and public perception, according to the resolutions.
Some of the resolutions call out companies for financially supporting organization such as the American Legislative Exchange Council (ALEC), the American Petroleum Institute and Koch Groups—all with a history of fighting climate policies. The shareholders argue that associating with anti-climate organizations damages a company's reputation and could adversely affect stock value.
If money is spent to purchase influence, it should pay for efforts to promote policies that call for mitigating and adapting to climate change, reduce the use of fossil fuels and focus on renewable energy, shareholders wrote in a resolution filed with Devon Energy.
Climate-related shareholder resolutions have risen since 2010
Last year, Devon executives told shareholders in recommending a "no" vote on a similar resolution that the company was "committed to conducting our business lawfully, ethically and in a socially and environmentally responsible manner. ... We also believe that participation in the political, legislative and regulatory processes—at all levels of government—is vital to our business."
Exxon, in urging a "no" vote on a political spending disclosure resolution last year, wrote that its activities "comply fully with the spirit and letter of all federal and state lobby disclosure requirements."
'They Can't Ignore Investors'
This year's shareholder resolutions addressing global warming go well beyond fossil fuel companies, cutting across a broad spectrum of businesses that include Apple Inc., Verizon Communications Inc., Lowe's Companies Inc., JP Morgan Chase and Company, and Ford Motor Company.
Investors will be paying attention to how much companies drag their feet on climate issues, Fugere said.
"These are sophisticated shareholders who have an interest in a sustainable world and investments in companies with stable business models that will protect their investments—and understand that they are related," she said.
Natasha Lamb, an executive with Arjuna Capital, which has filed several resolutions on behalf of shareholders in recent years, said investors increasingly recognize the risks. "Now that the broader investment community has taken notice, it's time for companies to accept," she said.
Published Under:
Business and Accountability
Short-Lived Climate Pollutants
Climate Change
Paris Climate Agreement
Email this page
Printer-friendly version
About the Author
David Hasemyer
David Hasemyer
InsideClimate News reporter David Hasemyer is co-author of the "Dilbit Disaster: Inside the Biggest Oil Spill You've Never Heard Of," which won the 2013 Pulitzer Prize for National Reporting, and co-authored the 2016 Pulitzer Prize finalist series "Exxon: The Road Not Taken." Prior to joining ICN, Hasemyer had an award-wining tenure at The San Diego Union-Tribune as an investigative reporter. Hasemyer's newspaper work has been recognized by the Associated Press, the Society for Professional Journalists, the Society of American Business Editors and Writers. He also has been a finalist for the Gerald Loeb Award and the Robert F. Kennedy Award for Social Justice and Human Rights. He can be reached at david.hasemyer@insideclimatenews.org. PGP key: http://ow.ly/iEHN3089Gqg
Our stories. Your inbox. Every weekend.
Most Popular
A new study based on EPA documents and interviews found industry influence over the EPA today is stronger than it was during the early Reagan years. Credit: Justin Sullivan/Getty Images
Pruitt's EPA Is on the Verge of 'Regulatory Capture', Study Says
By Neela Banerjee
Cleanup of the Enbridge pipeline Kalamazoo River oil spill in 2010. Credit: State of Michigan
Enbridge Fined for Failing to Fully Inspect Pipelines After Kalamazoo Oil Spill
By David Hasemyer
Pacifica California, in San Mateo County, by air. Credit: Philar/CC-BY-SA-2.0
In Cities v. Fossil Fuels, Exxon’s Allies Want the Accusers Investigated
By David Hasemyer
Storm-driven waves wash over man-made barriers on Roi-Namur island in 2014, showing the risk as sea level rises. Credit: U.S. Geological Survey
Climate Change Will Leave Many Pacific Islands Uninhabitable by Mid-Century, Study Says
By Nicholas Kusnetz
New York City plans to take its buses electric. Credit: Chris Hondros/Getty Images
New York City Aims for All-Electric Bus Fleet by 2040
By Phil McKenna
Chicago traffic. Credit: Rick Seidel/CC-BY-2.0
17 States Sue EPA Over Auto Emissions Standards Rollback
By Nicholas Kusnetz
UN climate negotiations in Bonn, May 2018. Credit: UN Climate Change
In Shadow of Trump's New Foreign Policy Team, U.S. Climate Negotiators Walk a Fine Line
By Marianne Lavelle
A herder purchases a portable solar power kit in Mongolia. Credit: Stephan Bachenheimer
World Is Not on Track to Meet UN’s 2030 Sustainable Energy Goals
By Georgina Gustin
Poultry industry chicken houses can hold tens of thousands of birds. Credit: U.S. Department of Agriculture
Giant Chicken Houses Overrun Delmarva, and Neighbors Fear It's Making Them Sick
By Georgina Gustin
Kansas farms and wind farms. Credit: Kansas State University Research and Extension
4 States Get Over 30 Percent of Power from Wind — and All Lean Republican
By Nicholas Kusnetz
Learn more about ICN's environmental journalism institute
Our Sponsors
View all sponsors
Follow
facebook.com/insideclimatenews
twitter.com/insideclimate
Related
An Exxon refinery. Credit: Scott Olson/Getty Images
Exxon Reports on Climate Risk and Sees Almost None
By John H. Cushman Jr.
Exxon holds its shareholder meeting
Exxon Shareholders Approve Climate Resolution: 62% Vote for Disclosure
By Marianne Lavelle
Indonesia has feed the world's appetite for palm oil by chopping down its tropical forests to clear space for palm oil plantations.
From Beef to Palm Oil, Investors Worry about Climate Risk in the Food Industry
By Georgina Gustin
After seeing the treatment of the Dakota Access pipeline protesters, a group of Marathon investors filed a shareholder resolution that called on the oil company to explain how it weighs environmental and social risks. Credit: Robyn Beck/AFP/Getty Images
Marathon Reaches Deal with Investors on Human Rights. Standing Rock Hoped for More.
By David Hasemyer
Subscribe to Clean Economy Weekly
Want More Stories Like This One?
Contribute To Our Staff
Donate Now
More Business and Accountability
Richmond, California, home to a Chevron refinery near San Francisco Bay, in one of several cities suing fossil fuel companies over climate change. Credit: Justin Sullivan/Getty Images
Fossil Fuels on Trial: Where the Major Climate Change Lawsuits Stand Today
By David Hasemyer
The food and beverage industry, where the supply chain is already feeling the effects of climate change on crops and water supplies, has the largest percentage of big companies setting greenhouse gas emissions goals with deadlines. Ronaldo Schemidt/AFP/Ge
Which U.S. Industries Are Setting the Strongest Climate Goals?
By Georgina Gustin
A wildfire near Boulder, Colorado, in 2010 burned more than 160 homes in the first 12 hours and led to losses in the millions of dollars. Credit: John Moore/Getty ImagesA wildfire near Boulder, Colorado, in 2010 burned more than 160 homes in the first 12
Boulder Sues Exxon Over Climate Change: Wildfires, Droughts and Water Are a Few Reasons Why
By Staff
More on Business and Accountability
Subscribe to InsideClimate News Email Newsletters
Articles & Investigations
Today's Climate
Clean Economy
Week in Review
Subscribe
More From The Author
Cleanup of the Enbridge pipeline Kalamazoo River oil spill in 2010. Credit: State of Michigan
Enbridge Fined for Failing to Fully Inspect Pipelines After Kalamazoo Oil Spill
By David Hasemyer
Pacifica California, in San Mateo County, by air. Credit: Philar/CC-BY-SA-2.0
In Cities v. Fossil Fuels, Exxon’s Allies Want the Accusers Investigated
By David Hasemyer
Richmond, California, home to a Chevron refinery near San Francisco Bay, in one of several cities suing fossil fuel companies over climate change. Credit: Justin Sullivan/Getty Images
Fossil Fuels on Trial: Where the Major Climate Change Lawsuits Stand Today
By David Hasemyer
More by David Hasemyer
Whistleblowers Jobs & Freelance Policies & Legal Our E-Books
Keep Environmental Journalism Alive
Donate Now
News Investigations Topics Today's Climate Clean Economy Middle Ground Infographics
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment