Investor pressure not enough as big oil baulks on climate change
During a 'do or die' week for three of the largest big oil companies, ExxonMobil, Chevron and Shell continue to rally against growing external pressure to adapt to a low-carbon pathway, warning that the shift would take an "unprecedented amount of effort".
With all three companies conducting annual shareholder meetings this week, the oil giants had been pressured by the world’s largest shareholder action platform – and millions of civilians – to adapt their businesses to a low-carbon pathway.
But even with the Paris Agreement signed and the Sustainable Development Goals in place, all three companies refused to acknowledge a world without fossil fuels, rejecting recommendations based on climate action and citing ‘transitional shifts’ without implementing much action.
During ExxonMobil’s AGM in Dallas on Wednesday (25 May), 11 climate-based resolutions were recommended, but just one was eventually passed as part of a proxy access measure.
While 81% of investors voted against introducing policies to limit global warming to 2C, the company did agree to take a ‘small step forward’ by allowing anyone with more than 3% in company shares to recommend climate activists for a position on the board.
Exxon’s chief executive Rex Tillerson said: “Until we have [the right technology] just saying ‘turn the taps off’ is not acceptable to humanity. The world is going to have to continue using fossil fuels, whether they like it or not.”
With the growing influence that investors possess to encourage companies to introduce climate reporting, Exxon’s refusal to follow the trend wobbled slightly as more than one third on its investors proposed requirements to publish annual climate reports, but this was ultimately rejected.
Exxon, which has ventured into biofuel exploration in recent months, is currently being investigated for alleged fraud by withholding information about the correlation between fossil fuel and temperature increases.
Hey, as has happened every year since 1990, all climate resolutions at Exxon annual mtg resoundingly voted down. Maybe now we can divest?
— Bill McKibben (@billmckibben) May 25, 2016
What are you willing to live without?
A similar occurrence also took place at Chevron’s annual shareholder meeting, also held on Wednesday in San Ramon, where 59% voted against introducing climate reporting measures.
Facing allegations over human rights issues from the Philippines court, Chevron noted that even with the Paris Agreement acting as a “good first step”, countries around the world would still need fossil fuels “under any scenario going forward”.
After rejecting calls to introduce a price for carbon emissions, both internally and internationally, Chevron’s chief executive John Watson said: “When people talk about a price on carbon, you’re talking about raising the price of energy; you’re talking about raising the price of everything you consume. The people arguing for a price on carbon should be prepared to say what they’re willing to live without.”
Despite investors getting close to introducing mandatory reporting, Chevron was able to reject all climate-based proposals including the chance to set carbon reduction targets. But in light of the growing investor desire to introduce reporting, Watson told shareholders that, while Chevron won’t reveal confidential data, it may consider reporting on climate risks in the future.
Meeting in The Hague on Tuesday (24 May), Shell investors also rejected recommendations based on climate change, citing that an overnight transition to renewables would “mean the end of the company”.
With 97% of shareholders rejecting a resolution to invest profits from fossil fuels in order to embark on a new journey as a renewable energy company, Shell’s chief executive Ben van Beurden warned that if the globe was to adopt a 2C pathway – which Shell has previously backed – the oil and gas sector would still require significant investment.
“It will take an unprecedented amount of effort to bring about a net zero emissions future,” van Beurden said. “If collectively we find a way to stay within the 2 degree (limit), we will still need significant investment in oil and gas…I am talking about up to a trillion dollars every year.”
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.