Annual general meetings (AGMs, also known as annual shareholders’ meetings) of major oil and gas companies targeted by UCS’s campaign begin with ConocoPhillips and BP this week and Royal Dutch Shell next week. ExxonMobil and Chevron follow at the end of the month. After the last year of Big Oil companies grabbing pandemic bailouts, publicizing dubious “net-zero” pledges, and getting hit with even more climate lawsuits, we’ve got some questions about how they’re conducting their business.
Lots of attention at these meetings will be on shareholder proposals urging each company to set and report on progress toward Paris-aligned emissions reduction targets. Adapting their own business models for a carbon-constrained world is a necessary—but not sufficient—step.
Beyond internal corporate climate goals, investors are concerned about the enormous public policy influence wielded by these companies and their industry groups. The oil and gas industry has long stood in the way of climate policy advances. That’s why shareholders continue to demand that major oil and gas companies put their climate lobbying money where their mouths are. BP, Shell, and ConocoPhillips have all taken some steps toward transparency about their lobbying—but none is doing enough to keep the American Petroleum Institute (API) and other trade associations in line with the companies’ own supposed climate ambitions.
As we’ve done in past years, my UCS colleagues and I will be monitoring each of these (virtual) AGMs, asking questions where we can. In case we don’t get a chance to speak, we’re publishing our questions here on the blog.
Learn more about AGM season in my recent interview on UCS’s Got Science? podcast, and read more below about what’s in store in the first three meetings we’re following.
Putting ConocoPhillips, BP, and Shell on the Hot Seat at Corporate AGMs
ConocoPhillips (Tuesday, May 11, at 9am CDT):
ConocoPhillips finds the climate change positions of the American Petroleum Institute (API) to be “aligned” with the company’s own positions. Given API’s long history of spreading disinformation on climate science and policy, how does ConocoPhillips plan to ensure that the trade association backs up its stated positions with consistent and effective advocacy?
ConocoPhillips claims to be “the first U.S.-based oil and gas company to adopt a Paris-aligned climate-risk strategy with specific targets.” How has the company assessed the financial, reputational, legal, and other risks of its refusal to take responsibility for the most relevant global warming emissions for its sector—the Scope 3 emissions from burning products derived from the oil and gas extracted by ConocoPhillips?
BP (Wednesday, May 12, at 11am BST):
Your company is currently being sued by a number of cities, counties, and states in the U.S. over its role in spreading climate disinformation.
In one of the most recent suits filed, New York City attests that BP uses flashy PR campaigns to “create the false and misleading impression that BP is a leading developer of clean energy resources,” including claiming that your company is “one of the major wind energy businesses in the US.” However, between 2010-2018, BP allocated only 2.3% of its total capital expenditures on low-carbon investments, and it owns only a sole gigawatt of wind capacity in the U.S. Meanwhile, BP continues to extol the virtues of its “cleaner-burning natural gas,” which is composed primarily of methane, a major contributor to climate change.
BP made headlines last year with its public pledge to become a net-zero company by 2050 and its plan to cut the amount of oil and gas it produces by 40 percent by 2030. Yet BP also acknowledged that it expects its overall emissions to increase over the next decade. Why does BP continue to delay meaningful action to slash emissions and redirect its spending toward clean energies?
Royal Dutch Shell (Tuesday, May 18, at 10am CET):
Two years after Shell’s initial report on climate lobbying by its trade associations, Shell’s 2021 review again acknowledged misalignment between the company’s climate positions and those of the American Petroleum Institute (API). With your company’s contribution to the group of at least $10 million—at least five times what Shell contributes to any other industry group—shareholder dollars are still being used to support API’s continued irresponsible and anti-climate lobbying activities.
Every year of delayed action puts the goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels further out of reach. What, if any, time limit has Shell set on its engagement with API? At what point would Shell suspend its membership dues or discontinue its membership due to API’s failure to align with the company’s climate positions?
Demanding Paris-Consistent Emissions Reduction Plans
ConocoPhillips shareholders are voting on a climate-related proposal for the first time in several years: a resolution put forward by the shareholder advocacy group Follow This that calls on the company to set global warming emissions reduction targets consistent with the Paris Agreement’s goals. While ConocoPhillips claims to be “the first U.S.-based oil and gas company to adopt a Paris-aligned climate-risk strategy with specific targets,” the company steadfastly refuses to set targets that encompass the most relevant global warming emissions for its sector—the “Scope 3” emissions from burning oil and gas products. The resolution argues that reducing absolute emissions from the use of fossil energy products is essential to achieving the goal of limiting warming to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C.
Activist investors are also urging shareholders to vote against ConocoPhillips Chair and CEO Ryan Lance and Lead Director Robert Niblock due to the company’s failure to set an adequate net-zero by 2050 target, realign its investment plans to limit global warming to 1.5°C, and ensure alignment of its climate policy advocacy.
BP shareholders are also considering a resolution by Follow This requesting that the company set and publish emissions reduction targets consistent with the Paris Agreement. Despite BP’s hype around its net-zero aims, the company has acknowledged that it expects its total emissions to increase over the next 10 years—the critical decade for turning the emissions curve down. Read more in this blog post by my UCS colleague Peter Frumhoff.
Shell makes it a three-fer with emissions reductions on the agenda. In Shell’s case, shareholders have two proposals to consider—one by Follow This (similar to the proposals under consideration at BP and ConocoPhillips), and a competing resolution put forward by the company seeking shareholder approval of its Energy Transition Strategy. Follow This points out that Shell’s Energy Transition Strategy is not Paris-consistent, and Shell itself acknowledges that its “operating plans do not yet reflect our long-term 2050 net-zero emissions target…”
While ConocoPhillips, BP, and Shell proclaim grand climate ambitions, major investors remain deeply unsatisfied with the pace and scale of these companies’ commitments and actions. For example, in its Net-Zero Company Benchmark, the Climate Action 100+ investor initiative found all three companies only partially aligned with the Paris Agreement’s goals. And a recent peer-reviewed study by Dario Kenner and Richard Heede argues that corporate compensation structures have created an incentive for oil and gas company executives to resist climate action, casting doubt on BP’s and Shell’s net-zero pledges.
Documenting and Confronting API’s History of Climate Deception
Recent research by Stanford University scholar Ben Franta has shown that API and its member companies were warned of the dangers fossil fuel posed to our climate as far back as the 1950s, and API spread disinformation about climate change as early as 1980. UCS’s own Climate Deception Dossiers spotlighted the infamous 1998 “roadmap” memo by an API task force, which outlined a multifaceted deception strategy on climate science.
Truth-Testing API’s Current Makeover
After French oil and gas major Total decided to quit API in January, pressure mounted on BP and Shell to leave the association. On the same day that UCS joined with 11 other organizations to publish an open letter in the Wall Street Journal calling on all businesses to adopt a science-based climate advocacy agenda aligned with the Paris Agreement’s goals, API made headlines by floating the idea of supporting a carbon price.
In late March, API launched its new “climate action” framework—a desperate attempt to buy a seat at the table in US climate policymaking and set a ceiling on US federal climate ambition.
- focuses on carbon pricing—with the caveat of “avoiding regulatory duplication,” which implies rolling back other climate-related regulations;
- offers incremental mitigation of operational emissions from oil and gas production while prioritizing public investments in unproven technologies including carbon capture, utilization and storage (CCUS) and hydrogen;
- spins natural gas as “lower-carbon” and “cleaner fuel”—framing that is getting API and some of its members in hot water for greenwashing;
- concedes federal regulation of methane—after API led the charge to dismantle federal methane rules under the Trump administration; and
- expresses support for concise, consistent, comparable climate reporting. (Forgive my cynicism, but as a long-time tobacco control advocate, I smell a rat. This reminds me of the tobacco companies agreeing in the 1960s to put weak textual warning labels on their products, then using the warnings as a shield against liability.)
In light of its decades of denial and deception, API has earned a healthy dose of scrutiny and skepticism for its climate claims. Yet Shell and BP both leaned on the framework to justify continued membership in API (although Shell still found “some misalignment” and BP noted that API has made “uneven progress”). ConocoPhillips, the first US oil and gas major to publish a trade association review, deems API “aligned.”
At all three of these companies’ AGMs, shareholders should insist that corporate leaders accelerate climate action consistent with the goals of the Paris Agreement—and stop bankrolling API’s climate dawdling and greenwashing.