Chevron and Exxon Mobil investors pushed back against environmental activists’ calls for swifter action to lower the carbon footprint at the companies’ annual shareholders meetings this week.
After the votes were tallied, environmental activists lost and petroleum-fuel proponents won in a battle over how quickly the major oil companies should act to reduce greenhouse gas and climate change.
In particular, proposals aiming to hold the major oil companies accountable for Scope 3 emissions from third-party users of their fuels failed, receiving 11% percent of the vote at Exxon and 10% at Chevron, The Wall Street Journal reported Thursday. Scope 3 emissions include when drivers burn gasoline in their cars.
Just a year ago, similar Scope 3 emissions proposals won about 25% of the vote, the Journal said. This week’s setback for environmentalists could indicate investors are in less of a hurry to abandon fossil fuels this year than last, perhaps because the challenges of quickly building an electric-vehicle charging network have become more apparent.
Paris Agreement
Shareholder activist group Follow This and others want the companies to do more to cut emissions and comply with the Paris Agreement on climate change. About 196 parties adopted the Paris Agreement on Dec. 12, 2015 at the United Nations Climate Change Conference to limit the average global temperature increase to “well below 2 degrees Celsius above preindustrial levels” and strive to limit the increase to 1.5 degrees above pre-industrial levels, according to the United Nations’ website.
Other activist proposals Exxon and Chevron shareholders considered, such as more information from the companies on oil spill risks and their efforts to meet environmental benchmarks, received less than 25% of the vote, The Wall Street Journal said.
Similar efforts failed at Shell’s annual shareholder meeting May 23, when climate activists disrupted the meeting by attempting to storm the stage, but they were in the minority as 80% of shareholders voted in favor of the company’s climate strategy resolution, according to Reuters.
Oil Companies' Goals
While the activists didn’t gain ground this round, the major oil companies are unlikely to unravel their commitments to reducing greenhouse-gas emissions. Exxon has set a goal of achieving zero emissions by 2050. Its 2030 goals include the following reductions from 2016 levels: 20% to 30% less corporatewide greenhouse gas intensity, 40% to 50% less upstream greenhouse gas intensity, 70% to 80% less in corporatewide methane intensity and 60% to 70% less in corporatewide flaring intensity.
Chevron supports the Paris Agreement on climate change, according to the company’s website. It has announced goals of $8 billion in lower carbon investments and $2 billion in carbon reduction projects by 2028.
The environmental activists aren’t likely to give up. Mark van Baal, founder of Follow This, said the group has made great strides over the years in persuading environmentally conscious investors to support the organization’s proposals seeking larger reductions in emissions as the Paris Agreement on climate change requires. In 2019, Norway’s largest investment fund, the Government Pension Fund Global, controlled by the Norwegian Parliament, divested 150 upstream oil and gas companies and large coal mining companies and invested in renewable energy companies and integrated oil companies, such as bp.
Fuels Institute Rebranding
Oil company shareholders are just one factor in a global movement to reduce greenhouse gases and climate change.
Growing support for alternatives to traditional petroleum-based gasoline prompted the Alexandria, Virginia-based Fuels Institute, a nonprofit organization dedicated to studying transportation energy, to change its name to the Transportation Energy Institute in a rebranding effort and a recognition of growing support for nonliquid energy options.
In a recent announcement, the organization’s Executive Director John Eichberger explained, “the transportation industry itself has evolved and the term ‘fuels’ has come to be viewed by many key stakeholders as not as inclusive as it once was, suggesting to some a limited focus on liquid hydrocarbons rather than inclusive of all energy options.”
State Litigation
In the U.S., environmentalists prevailed when the U.S. Supreme Court in April declined to allow major oil companies' petition to proceed to move to federal court a handful of lawsuits accusing them of harming the environment with greenhouse-gas emissions and failing to disclose the environmental risks to the public. The complaints, which are expected to be heard in state courts, want the oil companies to pay for the environmental harms instead of the taxpayers.
This month, the Biden administration’s clean-energy transportation goals received the support of the Canadian government for a U.S.-Canada EV charging corridor with EV chargers installed about every 50 miles. The Biden administration wants electric vehicles to represent 50% of all new vehicle sales in the U.S. by 2030 and has a goal of 500,000 EV chargers installed across America to help cut fuel emissions 50% by 2030.
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