US clears Exxon and Chevron to dismiss shareholder climate reporting requests

The US Securities and Exchange Commission (SEC) has approved requests from both Exxon and Chevron to reject shareholder proposals that have called on the oil and gas giants to report on how the companies are addressing climate change by aligning to the Paris Agreement.

US clears Exxon and Chevron to dismiss shareholder climate reporting requests

The two firms are two of the largest emitters globally

For the second year running, the SEC federal agency has enabled Exxon and Chevron to exclude and ignore proposals from a group of shareholders, including the Church of England and As You Sow, on climate reporting requirements.

The shareholders had called on Exxon to outline how it intends to reduce its total carbon footprint and align to the Paris Agreement ambition of net-zero ambitions by 2050, but the SEC enabled the company to reject the request. In a separate ruling, the SEC enabled Chevron to avoid responding to questions on how it will set out targets aligned to the global climate accord.

As You Sow’s president Danielle Fugere said: “Shareholders are increasingly concerned that the longer companies wait to address the clear and growing danger of climate change, the worse the human and economic toll will be. To prevent global devastation, every single company must plan now for how it will contribute to the goal of achieving a low-carbon world.

“Exxon and Chevron’s continued disregard of shareholder requests to address this existential crisis is astounding, as is the SEC’s. The SEC’s denial of shareholders’ right to raise these concerns in the public forum created for these conversations serves neither shareholders nor companies like Exxon and Chevron that are ignoring both shareholder concerns and clear warning signs of the growing dangers of climate change.”

Chevron claims that it is in alignment with Nationally Determined Contributions submitted as part of the Paris Agreement, but shareholders are unable to gain access to specific commitments that showcase that targets will align the company to the 2C pathway of the Paris Agreement.

Chevron is estimated to spend $4m per year on advertising and communications to suggest that it opposes high-carbon products, climate change and rising GHG emissions – but this is reportedly matched by $28m of lobbying to weaken climate legislation.

Chevron denies this accusation and claims that it is “committed to working with policymakers to design balanced and transparent greenhouse gas emissions reductions policies that address environmental goals and ensure consumers have access to affordable, reliable and ever cleaner energy”.

As for Exxon, the company “supports the Paris Agreement”, but notes that oil and gas demand will still be high throughout the 2040s.

The company claims to have spent $9bn on technologies to lower emissions since 2000, including carbon capture, biofuels and flare reduction. Since 2008, its net GHG footprint has decreased from 126 million metric tonnes of CO2e to 122 million metric tonnes of CO2e.

ExxonMobil reportedly spent the most on climate-focused branding last year of any oil and gas major, with its spend in this area estimated to stand at around $55m. During the 12-month period, its lobbying spend totalled $41m.

Fossil fuel transition

The two companies are in the spotlight because other oil and gas majors, including Shell, Total, Eni and Repsol, have all announced public goals to reduce total greenhouse gas emissions aligned to climate science.

In recent months, a group of 88 investors collectively managing around $10trn of assets have urged companies which they believe are not transparent enough about their emissions, waste and water footprints to disclose this information – along with data concerning their relationship with deforestation – through CDP’s platform.

In total, 707 companies with $15.3trn in market capitalisation are being asked to disclose by the investors. Some of the largest firms to receive this request include oil majors BP, Chevron and Exxon Mobil; carmaker Volvo; e-retailer Amazon and Qantas Airways. Multinational IT and retail giant Alibaba and palm oil firm Genting Plantations are also being targeted.

Last year it was revealed that oil and gas companies have spent £40.5bn ($50bn) on investment projects that undermine the Paris Agreement, according to think tank Carbon Tracker, which warned that major companies risk wasting £1.8trn ($2.2trn) on stranded assets by 2030.

Matt Mace

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