At the end of last month, I attended the Chevron Annual Meeting with my colleague Ortal Ullman and Stanford climate historian Dr. Ben Franta (see his blog reflecting on the experience). While this year’s meeting received significantly less attention than the ExxonMobil meeting, where attendees had to pass a 100-foot-long banner on the climate crisis, or the BP meeting, where some attendees staged a crime scene in the middle of the CEO’s opening remarks, Chevron did not escape activist pressure. And despite its efforts to keep a low profile about its meeting, Chevron faced shareholder discontent over its dedication to climate inaction. Here’s my take on the end of a proxy season in which oil and gas company decisionmakers showed why two-thirds of people in the US distrust fossil fuel companies.
Barriers to entry
Unlike some of its peers, Chevron is incredibly secretive about its annual meeting. There is no webcast, no recording, and no transcript. The meeting was held on a Wednesday morning at 8 AM, at the company’s San Ramon Campus, which is far outside the Bay Area’s mass transit system. The logistics do not welcome outsiders or casual shareholders – we had to show our printed proxy tickets to security just to get into the parking lot.
Before we even entered the auditorium, Chevron made us run a security gauntlet and coat check our pens and notepads in an abundance of caution over recording devices (no electronics are allowed). The company produces over three million barrels of oil equivalent per day, endangering the climate and rushing us towards a global average temperature increase well beyond 2°C, but that clear plastic pen is the real threat to be neutralized.
Shareholder proposals win support
With all the difficulties in attending, it’s no surprise that only two shareholders were on hand to present the five shareholder resolutions calling for better governance and environmental performance from the company. As Kathy Mulvey’s blog on key takeaways from the ExxonMobil annual meeting points out, assessing support for shareholder proposals against a majority threshold is overly simplistic. Even when a shareholder proposal receives less than 50% of the votes, it can demonstrate that a substantial portion of the shareholders are dissatisfied—and encourage the company to take action to address their concerns. Yet Chevron seems surprisingly comfortable leaving around one-third of its shareholders unsatisfied on a variety of environmental, social, and governance issues.
This year, Chevron successfully petitioned the SEC to prevent shareholders from voting on a proposal requesting the company set greenhouse gas emissions targets. Two shareholder resolutions were withdrawn before the meeting in exchange for commitments from the company to report on plastic pollution and on lobbying activities. However, Chevron’s commitment to disclose payments of more than $100,000 to trade associations falls far short of the emerging norm of reviewing trade and industry associations’ climate policy advocacy and acting to address misalignment with stated company positions. Shell and BHP have completed such audits, and a number of other companies in the extractive industries (including Equinor and reportedly BP) have promised to do so.
Three shareholder proposals received over 30% support this year, including:
- A request for a report on reducing the company’s carbon footprint. This vote was a clear rejection of the company’s current climate risk report, which insists that Chevron has no responsibility to align its business model with the Paris climate agreement—which would require reducing emissions from its operations and the use of its products to net-zero by mid-century, as underscored by the findings of the Intergovernmental Panel on Climate Change (IPCC)’s special report.
- A resolution to make it easier for shareholders to call special meetings was spurred by Chevron’s historic mismanagement of risk, exemplified by the ongoing legal challenges related to the pollution in Ecuador by Texaco (which Chevron acquired in 2001).
- A request for a report on the human right to water, presented by Sister Nora Nash of the Sisters of St. Francis of Philadelphia, who has attended these meetings and pushed for better corporate behavior from Chevron for over a decade, also received more than 30% support.
Questions & few answers
There were also a number of questions from shareholders and their proxies. Nearly all of these addressed either the climate or Chevron’s legal responsibilities in the Amazon. While CEO Michael Wirth made vague statements that bypassed the more pointed questions, he did explicitly say that there was no new science, and no new evidence, that supported the climate lawsuits filed throughout the US. We beg to differ.
Additionally, Wirth sidestepped my question about whether the company’s emissions targets – which will amount to just a .12% reduction of its total emissions over seven years, based on 2016 emissions – squared with the urgent need to reduce emissions to net-zero by mid-century to avoid the worst impacts of climate change. He also supported the American Legislative Exchange Council (ALEC), the Koch brothers’ conservative “model” bill factory, and declared the Chevron would not create a litmus test for trade association membership, as some of its competitors have begun to do to ensure their trade association climate lobbying doesn’t conflict with their own stated positions.
Unlike the ExxonMobil meeting I attended last year, I did not even leave with a swag bag of various petroleum products. Instead, I left with two very crummy Chevron-emblazoned pens and a sense of growing frustration. And a newly released survey conducted by Yale University’s Program on Climate Change Communications suggests that I’m not alone. The poll found that two-thirds of people across the US—and more than seven in ten Californians—distrust fossil fuel companies.
It is clear that Chevron intends to uphold the status quo when it comes to annual meetings and community engagement – keep people out and keep expectations low. Despite scoring poorly on UCS’s 2018 Climate Accountability Scorecard, Chevron has managed to sneak under the public radar with a lower profile than its peers. It’s up to us to shine a light on the company’s current and historic role in spreading climate disinformation and blocking climate policies.