Proposals by Climate Action 100+ investor signatories calling on major oil and power companies to disclose lobbying and improve governance on climate change garnered record support during the last season of shareholder representation.
In particular, a majority of 53% of the shareholders of Chevron Corp. CVX,
voted in favor of a resolution seeking a commitment from the oil giant to align its climate policy lobbying activities with the objective of the Paris Agreement, an international voluntary effort that aims to keep the global average temperature rise below 2 degrees centigrade, and ideally limit it to 1.5 degrees
“Lobbying that is inconsistent with the objectives of the Paris Agreement presents a direct threat to our portfolios, our economies and our clients.”
Brought to you by BNP Paribas Asset Management of Climate Action 100+, this was the first climate-related proposal to win the majority of Chevron shareholder votes and was the only proposal on the Chevron 2020 ballot to win the majority, Climate Action 100+, a group of more than 450 leading asset managers, pension funds and others with a combined total of $ 40 trillion in assets said in a statement Tuesday.
“This historic vote at Chevron signals an evolution of investor concerns about corporate lobbying activities. Lobbying that is inconsistent with the objectives of the Paris Agreement poses a direct threat to our portfolios, our economies, and our clients, ”said Adam Kanzer, chief administration for the Americas, BNP Paribas Asset Management, the lead sponsor of the proposal.
“More than 14 large European companies, including BP BP,
and Total TOT,
, have agreed to publish reviews of their trade associations, using the Paris Agreement as a benchmark. There is no reason why American companies cannot do the same, “he said.
Similar lobbying proposals put forward by Climate Action 100+ investor signatures garnered significant, albeit minority, support at Duke Power DUK,
with 42.4% in favor, ExxonMobil XOM,
with 37.5%, Caterpillar CAT,
with 34% in favor, General Motors GM,
with 33%, Delta Airlines DAL,
with 45.9% and United Airlines UAL,
Defense group investor signatories also put forward proposals to seek independence between the position of board chairman and CEO at various companies with the expectation that an independent board will have a longer-term view of the climate risks facing a company.
The independent resolutions of the chairman of the board obtained high votes in the electric companies Dominion Energy and Duke Energy with 46.6% and 40.1% respectively, in the oil giant ExxonMobil with 32.7% and in Southern Company with 22%.
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“Climate Action 100+ signatory investors are driving the transition to zero net emissions, asking companies to consider their climate risks, disclose their lobbying and act on the climate,” said New York City Comptroller Scott Stringer, who presented proposals in several of the companies. “We were pleased to see encouraging results in the proposals we led at Dominion Energy, Duke Energy and General Motors. Companies are aware that investors demand climate actions from the companies they own. ”
Under CEO Darren Woods, Exxon has blocked six climate resolutions from the 2020 vote, which has inspired activists to push harder for the split in leadership.
Despite Exxon’s concerted opposition, the resolution filed for an independent chairman of the board received 32.7% of shareholder support. Previous presentations have revealed that most shareholders believe they “reap significant benefits” from the combined roles Woods plays.
“Companies that don’t address investor climate risk concerns do so with great danger,” said New York State Comptroller Thomas P. DiNapoli. “Exxon, in particular, has become an outlier for its refusal to seriously explain the demands of a lower carbon global economy. Investors in Climate Action 100+ will continue to move forward as we move forward with corporate reforms that address the risks posed by the climate crisis. ”
The pact signer BlackRock, the world’s largest asset manager with some $ 7 trillion under surveillance, lobbied for an independent president at Exxon, voted against two directors, and publicly expressed oil concern over too slow a response with climate targets. Earlier this year, BlackRock BLK,
CEO Larry Fink promised to put sustainability and climate change at the center of his investment strategy and analysis.
Exxon’s main holders include BlackRock, Vanguard Group and State Street Corp, which combined hold approximately 20% of Exxon’s shares.
The largest pension fund in the US The California Public Employees Retirement System, or CalPERS, also voted against two ExxonMobil directors and publicly stated their concern that the board would not disclose greenhouse gas emissions across the entire chain of company value.
“Climate change poses a systemic risk for investors like CalPERS. As trustees, we must hold boards accountable for setting targets to reduce greenhouse gas emissions that cause global warming, ”said Anne Simpson, interim managing director of investment for CalPERS and a member of the global steering committee for Climate Action 100+.
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The list of more than 100 companies selected in the Climate Action pact includes “systemically important emitters” that account for two-thirds of global annual industrial emissions, along with more than 60 more with a significant opportunity to drive the clean energy transition. The initiative has grown to include more than 450 investor signatories with combined assets under management of more than $ 40 billion. Signatories interact with companies through dialogue and broader engagement that often results in significant progress. However, when the dialogues do not produce the necessary momentum, the signatories present shareholder proposals.
“The record votes for the Climate Action 100+ shareholder proposals and the almost unanimous support for them from the CEOs is clear evidence that capital market influencers are aligning with the goals of the Paris Agreement,” said Mindy Lubber, CEO and President of Ceres, and member of the global steering committee of Climate Action 100+.
One of the alliance’s most significant victories came last month following a combination of dialogue and shareholder proposals in recent years, Southern Company SO,
, one of the largest electricity producers in the United States, promised to set a goal to achieve zero net emissions by 2050.