This week marks the dramatic culmination of fossil fuel company annual meeting season, with a trifecta of annual shareholders’ meetings. As I wrote yesterday, Royal Dutch Shell is convening today in the Netherlands. Tomorrow, both Chevron and ExxonMobil will hold their annual meetings.
I’ll be in Texas at the ExxonMobil meeting and my colleague Deborah Moore will be in California at the Chevron meeting, attending on behalf of shareholders who support our campaign to hold fossil fuel producers accountable for their role in climate change.
Each of us will be accompanied by a climate scientist who will speak to shareholders, top management, and board members face-to-face about the state of the science on global warming and the consequences of Chevron’s and ExxonMobil’s business practices for people around the world. Activists will also protest outside both companies’ annual meetings.
These companies and their allies are highly engaged—and fighting back on multiple fronts.
Major responsibility for global warming pollution
It is perhaps fitting that Chevron and ExxonMobil are holding their annual meetings on the same day. Not only are they both successor companies to John D. Rockefeller’s Standard Oil, they are also the two largest investor-owned producers of historic carbon emissions since the start of the Industrial Revolution.
Research by the Climate Accountability Institute has traced nearly two-thirds of all heat-trapping emissions from fossil fuels and cement to just 90 investor- and state-owned entities.
No more business as usual
Recognizing both companies’ responsibilities for global warming emissions, shareholders are demanding that Chevron and ExxonMobil begin to align their business models with a carbon-constrained world.
Major fossil fuel producers are behind the curve in terms of accepting the historic agreement reached in Paris last December and joining more than 150 companies that have signed up to set science-based targets for emissions reductions.
As a first step, better tracking and disclosure of climate-related metrics is needed—and some leading investors agree. Both Chevron and ExxonMobil face shareholder resolutions calling on them to:
- Publish an annual assessment of how climate policies may affect their business in light of the globally agreed target to limit global warming to 2°C above pre-industrial levels; and
- Account for reserves in energy units, by resource category, rather than solely in oil and gas units.
We will see how much backing the proposals receive when votes are tallied, but some shareholders have already indicated their support. Norway’s $870 billion sovereign wealth fund, which owned 0.85% of Chevron and 0.78% of ExxonMobil as of the end of 2015, announced that it will vote in favor of the climate change impact assessment resolution at both companies.
Shareholders in these companies will vote on additional climate-related proposals, including:
- For ExxonMobil to acknowledge the moral imperative to limit global average temperature increases to 2°C above pre-industrial levels;
- For Chevron to adopt company-wide targets for reducing greenhouse gas emissions in its products and operations—and report on its plans to achieve those targets.
As I noted in an earlier blog, even vote tallies of 10% or 20% in favor of shareholder proposals can send a strong message to corporate management and lay the groundwork for changes in company policies and actions.
Fed up with denial and deception
Shareholder advocates and other activists are also calling on Chevron and ExxonMobil to reject disinformation on climate science and policy. This year’s annual meetings occur amid growing scrutiny about the discrepancy between major fossil fuel producers’ internal knowledge of climate science and their public denial of climate change.
Both Chevron and ExxonMobil shareholders put forth proposals calling for full disclosure of their direct and indirect lobbying. As part of the rationale for improved disclosure, the resolutions highlight the companies’ lack of transparency regarding their memberships in the American Legislative Exchange Council (ALEC), the American Petroleum Institute (API), and the Western States Petroleum Association (WSPA).
As revealed in UCS’s Climate Deception Dossiers and other recent investigations:
- ALEC peddles disinformation about climate science and tries to roll back clean energy polices. Much of ALEC’s lobbying has focused on dismantling, at the state level, policies that have proven effective in reducing carbon pollution and accelerating the transition to clean energy.
- API authored a 1998 roadmap of the fossil fuel industry’s plan to cast doubt on the public’s understanding of climate science, and continues to claim that the science of climate change is unsettled while attempting to block efforts to limit carbon pollution—such as the Environmental Protection Agency’s Clean Power Plan.
- WSPA serves as a key organizer of opposition to California’s groundbreaking climate policies and employed deceptive ads on more than one occasion to block the “half the oil” provisions of a major clean energy bill enacted by California lawmakers.
Growing momentum for accountability
Attorneys general from California, Massachusetts, New York, and the U.S. Virgin Islands are investigating whether ExxonMobil lied to its shareholders and the public about the threat of climate change.
These investigations have generated a backlash by the Competitive Enterprise Institute (CEI), a free-market think tank that has been funded by ExxonMobil and has regularly misrepresented climate science, and by several members of the House Science, Space and Technology Committee. (For more, see UCS President Ken Kimmell’s blog about the letter he received last week from 13 committee members requesting that UCS turn over correspondence related to our fossil fuel company accountability work.)
AG Schneiderman and others are investigating ExxonMobil for fraud, given evidence suggesting the company knew about climate risks but withheld them from their investors, decision makers, and the public
In California, momentum is building behind the Climate Science Truth and Accountability Act (SB 1161), authored by Senator Ben Allen (Santa Monica). As my colleague Jason Barbose wrote recently, this narrowly targeted bill has garnered support from more than 30 organizations that recognize the threat of climate change and the importance of defending the public from industry foul play.
Last week, 20 prominent legal scholars sent a letter to California Governor Jerry Brown and state legislators stating that SB 1161 is in the public interest because it would ensure that companies that misled consumers about climate science don’t avoid prosecution simply because the clock has run out.
With pressure on major fossil fuel companies escalating from many angles, I look forward to reporting back on our presence at the Chevron and ExxonMobil annual meetings, the companies’ responses, and the new opportunities we are creating for our campaign.