Exxon and Chevron shareholders cut support for climate resolutions

ExxonMobil and Chevron shareholders solidly rejected climate change proposals at the US oil majors’ annual meetings on Wednesday, scaling back support from last year and splitting with results at peers in Europe where resolutions related to global warming have won stronger support.

Only 11 per cent of Exxon shareholders supported a petition calling for the company to set emissions reduction targets that would be consistent with the goals of the 2015 Paris climate agreement. A similar proposal at Chevron received less than 10 per cent support.

The vote tallies highlight differences between shareholder support for climate change action at US and European oil companies. Last week, 20 per cent of Shell’s shareholders voted against the company’s energy transition plan, arguing that it was not enough to reduce emissions. At BP in April, 17 per cent of shareholders backed a resolution to force the company to reduce its oil and gas output faster.

Unlike BP and Shell, the US oil majors have resisted setting targets for emissions from consumer use of their products because they would in effect force the companies to start reducing oil and natural gas production. Both of the companies plan to increase output and last week Chevron spent $6.3bn to acquire US shale producer PDC Energy, adding new oil and gas reserves.

In the US, where Republicans have attacked asset managers’ voting behaviours, investor support for climate action has lost momentum. Last year, the Paris alignment shareholder proposals received 28 per cent and 33 per cent support at Exxon and Chevron respectively, according to Dutch shareholder activist Follow This, which filed these petitions again this year.

“It’s incomprehensible that most investors still accept the US super majors’ refusal to cut emissions this decade,” Follow This founder Mark van Baal said after the Exxon and Chevron votes.

The votes came after a change in public perceptions over the past year, as Russia’s war in Ukraine drove up fuel prices and gave renewed emphasis to energy security alongside protecting the climate.

Last year a majority of Exxon shareholders backed a proposal calling for the company to report how a rapid global shift away from fossil fuels would affect its finances. BlackRock, one of Republicans’ biggest targets, voted for this proposal last year.

On Wednesday, Exxon and Chevron faced 13 shareholder proposals related to carbon emissions or climate change. Only one petition received more than 20 per cent support, a threshold regarded as a strong sign of investor dissent. About 36 per cent of shareholders supported a proposal asking Exxon to report more about its methane emissions.

Separately, a quarter of Exxon shareholders endorsed a petition for information about how slowing plastics demand could affect the company’s bottom line.

Before the votes at the US oil majors, the Norwegian sovereign wealth fund, the largest in the world, said it would back the Follow This proposal. 

Exxon fired back at van Baal, arguing he has said publicly that his shareholder proposal is meant to be a “Trojan horse” to force companies to eliminate oil and natural gas investments. 

Additional reporting by Derek Brower in New York