Climate activists have been asking U.S. oil major companies to consider total emissions reduction but shareholders’ vote this year seems to be waning.
In their annual meeting this year, a majority of Chevron and other firms’ shareholders voted against a proposal to have overall emissions reduction targets.
Major oil and gas producers have come under mounting pressure to cut greenhouse gas emissions and do more to fight climate change.
Climate-related shareholders’ proposals at the oil majors centered on two main issues: emissions reduction targets and methane emissions.
But major oil firms this year flipped the script and won over investors with their climate change plans. They’re worried about energy security and fuel prices outweighing environmental resolutions.
Many of them have set targets for reducing their direct and indirect emissions (Scope 1 and 2 emissions). But they tend to ignore action plans to cut down their Scope 3 emission targets.
- This is evidenced by shareholders’ votes in major oil companies falling short to force the firms to cut their overall emissions.
Shareholders Vote on Chevron Emissions Reduction Targets
Shareholders of Chevron voted against the proposal calling for the firm to set more rigorous targets to reduce GHG emissions.
As per Chevron’s preliminary report, only 33% of the investors voted for the proposal. This is a significant change in the firm shareholders’ stand on this matter.
Last year, 61% of shareholders voted in favor of a similar emissions reduction proposal.
Chevron’s CEO, Michael Wirth, told shareholders that the firm plans to focus on reducing the carbon intensity of its operations. He said,
“We aim to lead in lower carbon intensity oil, products, and natural gas, and to advance new products and solutions that reduce the carbon emissions of major industries.”
The oil major also said its 2022 capital spending will be more than 50% higher than in 2021. This includes the company’s announced acquisitions earlier this year.
The votes come as historic profits by oil majors like Chevron eclipse concerns about the climate crisis. Similar proposals at other oil firms also failed to win enough shareholders’ votes.
Investors Vote Against Scope 3 Emissions Reduction
A climate activist group “Follow This” asked U.S. oil companies to directly reduce their GHG emissions. The company won a court order last year requiring Shell to cut its emissions.
Yet in London, support for Shell’s climate plan declined 10% points to only under 80%. And support also fell for a resolution brought by Follow This to only 20.3% of votes cast, down from about 30% last year.
Shell urged shareholders to reject the resolution saying that:
“The Company has set ambitious targets in line with the 1.5°C goal of the Paris Agreement… Its strategy supports an orderly transition, one that maintains the supply of oil and gas where it is still needed… and that accelerates the shift to low- and zero-carbon energy.”
ExxonMobil also shows the same trend in shareholders’ position on the firm’s emissions reduction plan.
Shareholders voted down a resolution from Follow This to set targets for reducing its customers’ (Scope 3) emissions.
Only 28% of the votes that were cast supported the proposal. If approved, the proposal would have reduced the sales of fossil fuels. It will also make Exxon set and report its targets for cutting overall GHG emissions.
Exxon CEO Darren Woods said that the firm is expanding investments in fossil fuel production. This is to minimize a global energy shortage and the rising prices for consumers. Woods said:
“We don’t believe scope 3 targets are an effective way to manage total society emissions… Access to reliable energy is foundational to our daily lives.”
Investors’ votes at ConocoPhillips Co. and Occidental Petroleum Corp. also failed to support the climate proposal this month.
58% of shareholders in ConocoPhillips have voted for a proposal by Follow This last year. But the support has also reversed with only 39% of favored the group’s proposal to set total reductions targets.
Likewise, Occidental Petroleum Corp. shareholders rejected the same proposal during its annual meeting this year. In fact, shareholders voted 83% against setting more rigorous targets for emissions reduction.
Investors in all five oil companies have cast their votes on the total emissions reduction proposal and the majority of them decided to go against it.