Companies like Exxon Mobil, Chevron and Chase, with significant stakes in oil and gas and other fossil fuels, are resisting requests from shareholders to take responsibility for their contributions to climate change.
According to a news report on the website https://www.climateliabilitynews.org/ Exxon Mobil has rejected a proposal by a shareholder calling the company to disclose how it plans to align its business with Paris Agreement climate targets. Exxon Mobil has termed the proposal, “materially false and misleading.”
Other companies in the fossil fuels industry are also opposing similar requests from their shareholders that relate to their contributions to climate change.
The shareholder proposals are a way for investors to push companies to address climate change risks, but the oil and gas majors have been largely unreceptive to them. The companies have refused to include the shareholders’ proposals in the materials that shareholders will consider and vote on at the companies’ annual meetings.
The proposals ask the companies to issue a report on how they are working to reduce their contribution to climate change and how they might align their investments and business activities with the Paris Agreement goal of limiting warming to well below 2 degrees Celsius.
As You Sow shareholders advocacy organisation president Danielle Fugere said, “We were surprised by the ‘false and misleading’ claim”.
He said, “With regard to (ExxonMobil) saying we want them to end oil and gas tomorrow, that is not the case. We’re asking the company to provide a plan to demonstrate that they’re moving towards zero emissions by 2050 target.”
“We don’t believe that anything we’ve said is false and misleading, to the extent we believe every oil and gas company has to start reducing its oil and gas products, and in fact that’s where the market is going,” Mr Fugere said.
Exxon, however, defended its continued production of oil and gas, arguing that “substantial new investment in oil and gas projects will be required for many years,” and that other companies will fill the production void if Exxon moves away from petroleum.
“Singular actions by the company to shrink its oil and gas business would ultimately not reduce global GHG emissions or advance the goals of the Paris Agreement,” Exxon has said.
“Each year, Exxon becomes more hostile toward its investors and buries its head further in the sand to ignore the world changing around it,” said Mr Fugere. “Doubling down on investments in oil and gas while claiming Paris alignment is unacceptable. The company’s efforts to stifle shareholder concern about the climate crisis is wholly inexcusable.”
“We believe that compelling select oil and gas producers to unilaterally reduce their production or change their portfolios to align with a possible future energy mix does not advance the goals of the Paris Agreement,” said Chevron.
But Fugere said Chevron, along with Exxon, needs to do a lot more to prove to investors that they are taking climate risks seriously.
“They point to their efforts to reduce methane emissions and create efficiency in their operations, but that is less than 20% of their entire greenhouse gas footprint,” Fugere said.
“They’re doing not enough, and it’s not quickly enough. They are in fact not Paris-aligned, and neither company will take responsibility for their product emissions.”
According to As You Sow, “JPMorgan Chase’s funding contributes substantially to global climate change. The company is the largest source of financing to fossil fuel companies globally, averaging $65bn annually since the Paris Agreement was signed.”
In a response filed with the SEC on 13 January 2020, JPMorgan Chase argued that the proposal seeks to compel investment decisions based on greenhouse gas emissions, decisions it says are solely in the hands of management. “The requested lending criteria, however, would effectively displace management’s judgment regarding the appropriate factors for making lending and investment decisions.”
JPMorgan Chase claims the proposal “seeks to micromanage the company by probing too deeply into matters of a complex nature.”
But Fugere said banks need to be held accountable for lending decisions that continue to prop up the fossil fuel industry. “So long as banks continue to put money into oil and gas companies, it sends the wrong signal that these companies are investable,” she said. “Banks have to reduce their own carbon footprint, and that means reducing the amount of money going to fossil fuels.” A
|BP promises zero emissions by 2050
Not all of the oil and gas majors are as resistant. New BP CEO Bernard Looney pledged that the multinational will achieve net zero carbon emissions by 2050, as part of a long-term overhaul of the company. This puts BP ahead of the goals set by industry rivals.
The new plan also aims to halve the amount of carbon in BP’s products within the same time frame.
“We have got to change and change profoundly because the world is changing fast and so are society’s expectations of us,” Mr Looney said in his first major speech in the role.
BP did not specify how it intends to reach its 2050 targets.