Signatory support for climate engagements continues to grow with Exxon and Chevron AGMs just a week away
18 May 2016
The 2016 proxy season has seen a record-breaking 89 resolutions filed focusing on climate change according to ISS, with the two largest US oil companies – ExxonMobil (XOM) and Chevron (CVX) – receiving the bulk of investor pressure. The companies face six and seven climate risk resolutions respectively at their AGMs on 25 May.
The New York State Common Retirement Fund, the Church of England and Wespath Investment Management have filed resolutions on portfolio resistance, asking the companies to assess the long-term portfolio impacts of public policies relating to climate change. These proposals have received significant investor support with large funds including CalPERS, AXA Investment Managers and Legal & General publically declaring their intention to vote in favour of the resolution at Exxon, and ACTIAM, Amundi and Schroders Investment Management voting in favour at Chevron. The full list of investors voting in favour can be found here. The two prominent proxy advisory services ISS and Glass Lewis have also declared their support for the resolution at Exxon. Similar resolutions, including at AES Corporation and Occidental Petroleum have seen significant votes in favour (42.2% and 48.9% respectively).
Other PRI signatories have filed additional resolutions at both companies, including As You Sow, whose resolutions ask both companies to account for energy reserves in resource-neutral BTUs (British Thermal Unit – an internationally accepted energy unit), in addition to the traditional barrels-of-oil and cubic feet of gas standard. This proposal seeks to counter the perverse incentive oil and gas companies have to manage their reserve replacement ratio by developing new reserves, and in doing so, potentially increase the risk of stranded assets.
Finally, members of the PRI-coordinated investor working group on corporate climate lobbying have both filed and supported resolutions on lobbying disclosure. Prominent asset owners including Local Government Super, the Environment Agency Pension Fund and AP7 are among those who have declared they will vote in favour. These resolutions ask Exxon and Chevron (among others) to disclose their policies and procedures governing lobbying, including payments made and memberships to various tax-exempt organisations. These resolutions play a crucial role in ensuring that companies who say they are supportive of a 2 degree limit on global warming over pre-industrial levels and a low-carbon transition do not financially support organisations who are lobbying for the contrary. Lobbying resolutions at energy companies have also received notable support, including a 40% vote in favour at Suncor, and 34.3% vote in favour at Duke Energy.
To view a full list of upcoming resolutions being filed by PRI signatories this season, click here.