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Top Oil Companies Face New Round Of Shareholder Climate Resolutions


12/16/2019


Top Oil Companies Face New Round Of Shareholder Climate Resolutions
Five big oil companies of the United States and Europe are being put under pressure by an activist group by putting through shareholder resolutions which demand that the companies do more so that they meet the goals and objectives of the Paris climate accord and reduce carbon emissions from their business activities.
 
US oil giants ExxonMobil, Chevron and their European rivals Royal Dutch Shell, BP and Equinor are being targeted by Dutch group ‘Follow This’ and is bringing in climate resolutions drafted by shareholders before the annual general meetings (AGMs) of the companies scheduled to be held in the first half of 2020.
 
Follow This is able to file for shareholder resolutions because it owns minor stakes in the companies.
 
The divide among the companies on both sides of the Atlantic with respect to their approach to climate change is reflected in the fact that the resolutions for The Exxon and Chevron are vaguer compared to those drafted for European companies.
 
According to the resolution drafted for the US companies, the boards of Exxon and Chevron are urged to “align its strategy with emission levels compatible with the goal of the Paris Climate Agreement”, which has the target of retaining global warming below 2 degrees Celsius.
 
On the other hand, the resolution for the European companies has called on boards to set and publish clear long-term goals so that the companies are able to meet the Paris goals. These European companies have in recent years agreed to meet a number of carbon emission reduction targets.
 
All types of emissions are urged to be included in their climate strategies, for all of the companies in the resolutions. Such emissions include those that originate from fuels and products sold to customers which is known as Scope 3 emissions, and which are believed to be between 6 and 8 times more than the emissions that originate from the activities of the companies.
 
A climate resolution with Shell was first filed by Follow This in 2016. The group however expanded its efforts to include other oil and gas majors last year with the climate change issue gaining fast momentum.
 
The companies’ boards have always opposed the resolutions brought in by the group and it has never won a majority support. However those resolutions have most often resulted in company boards and shareholders debating the issues at the annual general meetings. 
 
Analysts are unsure about whether the US resolutions will be put to vote because American companies can make requests to regulators to prevent shareholder resolutions form being voted and debated on.
 
A resolution last year by the Church Commissioners for England and the New York State comptroller’s office was successfully blocked by Exxon.
 
A call given by Follow This to set out clear short, medium and long-term targets for greenhouse gas emission targets for Shell has also been renewed by the group.
 
(Source:www.bloomberg.com)