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Big oil brace for shareholder rebellion in proxy voting season

JustStop Oil, a member of the Environmental Group, closed the BP gas station in London on April 28, 2022. A group of activists are calling on the UK government to promise to approve and stop production of new fossil fuels.

Kristian Buus | With Photos | Getty Images

London — Some of the world’s largest corporate emitters face a potential shareholder rebellion this month, and climate-related voting is ready to skyrocket throughout the surrogate season.

Oil and gas majors on both sides of the Atlantic will hold an annual meeting in the coming weeks. Existing climate strategies are being voted on, along with a series of investor-led resolutions aimed at reducing emissions.

In Europe, in Norway Equinor And the UK BP Each AGM will be held on Wednesday and Thursday.UK based shell The annual shareholders meeting was held on May 24th in France. TotalEnergies AGM will be held on May 25th.

State side, Chevron When Exxon Mobil Each AGM will be held on May 25th.

The next surrogate season is under increasing pressure on big oils to set short-term and medium-term goals along the landmarks. Paris Agreement.. The 2015 agreement is widely recognized as very important in avoiding an irreversible climate crisis.

at present, Not a single oil and gas measure Is in line with the Paris Agreement’s goal of keeping global warming 1.5 degrees Celsius above pre-industrial levels.

Engagement does not change. They will only change if you are very clear to them — and the only way to do that is to vote.

Marc vann bar

Founder of FollowThis

The Dutch group FollowThis is a small activist investor and campaign group that invests in several major oil companies and will propose several climate change solutions this month. Investors are demanding that agencies be leveraged to force their energy majors to align with the Paris Agreement.

“The message is, and I’ve already tried to convey it for years, they don’t change with their own unity. They don’t change with engagement. They make you very clear to them. It will only change if it is — the only way to do that is to vote, ”Markvan Baal, founder of FollowThis, told CNBC in a video call.

“If you want to reach the Paris Agreement, you need to vote in favor of these resolutions,” Van Barr said. “These resolutions do not require extremes. They are fair demands.”

“Unclear, general, destructive”

Shareholders of US oil producers ConocoPhillips On Tuesday, we voted against the proposal to include customer emissions in our greenhouse gas reduction targets. This move, advocated by Follow This, received 39% support.

This is the highest vote for Paris’s consistent emissions proposals submitted by the Environmental Group, reflecting investor impatience for Big Oil’s refusal to curb emissions by 2030. I marked it.

The resolution called for reduction targets for direct and indirect emissions along Paris, so-called Scopes 1 and 2, and emissions generated by customers’ use of oil and gas (Scope 3).

The board of directors of ConocoPhillips recommended that shareholders vote against the proposal. Exploration and production companies have many investors who say, “In relation to shareholders,Expressing particular concern“Setting Scope 3 goals can actually undermine our business and their interests in long-term value.”

Shareholders of US oil producers Occidental Petroleum Last week, it also voted against the company’s “Follow This” proposal to extend its existing carbon emission reduction targets.

The protest group Extinction Rebellion’s climate activist was taken away by police on April 13, 2022, after holding his hand over the reception at Shell’s headquarters. XR has made a series of protests to thwart the fossil fuel economy.

Torga Acmen | Afp | Getty Images

Oil major investors such as Shell, ExxonMobil and Chevron voted for a climate-related resolution last year, and Campaign Group hopes for further success this month. These hopes partially presuppose the liability risk of oil and gas major directors and institutional investors.

Shell’s board of directors “takes personal responsibility for the future” for not complying with the Paris Agreement, according to law firm Paulussen Advocaten’s environmental lawyer. Won a groundbreaking proceeding against the oil giant In May last year. Shell has appealed the ruling.

In addition letter To investors on April 25, Paulussen Advocaten’s lawyer said: [to vote for climate resolutions].. “

Nonetheless, Equinor, BP, and Shell all encourage investors to vote against this month’s Follow This proposal.

BP Said The Campaign Group’s move is “unclear, general, destructive and will cause confusion regarding the accountability of the board and shareholders, thus threatening long-term value creation.”On the other hand, the shell Explained Resolution as “unrealistic”.

France’s TotalEnergies has decided not to include investor-led climate change resolutions in its annual shareholders’ meeting.Violate French legal rules.. “

US oil giant Chevron’s profits more than quadrupled in the first quarter of 2022.

Justin Sullivan | Getty Images News | Getty Images

Nine of the ten largest Dutch investors have pre-declared a vote to resolve climate change. “It’s really extraordinary,” Van Barr said.

The ISS advised shareholders to vote for climate change at Valero, Occidental, ConocoPhillips, Phillips 66, and Equinor, but BP voted against it. Glass Lewis, who holds power among oil shareholders, advised investors to vote against all these climate change resolutions, except in the case of Valero.

“We need a majority”

“We’re expecting growth, and we need a majority to actually make that change, so we’re expecting a majority,” said Van Barr. “Many things have happened since last year’s surrogate season.” Investors seem to be “more and more concerned”.

For example, the International Energy Agency caveat If the world does not exceed the critical global warming threshold, new fossil fuel infrastructure cannot be built.A Dutch court has ruled that Shell needs to cut 45% from 2019 levels by 2030, and the world’s leading climate scientists Release Three major reports on the growing climate crisis.

Follow this. For Shell, support for climate change resolution jumped from just 2.7% in 2016 to more than 30% in 2021.

Indeed, the UK Corporate Governance Code Prescribe With a shareholder vote of over 20%, the company needs to return to investors to discuss their concerns.

“The oil industry is now actually using the energy crisis as an excuse to stall climate change measures, and I’m not sure if investors will accept the story,” said Van Barr, who supported voters. He added that it would be “terrible” if discouraged. Climate-related resolutions.

Big oil brace for shareholder rebellion in proxy voting season

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