Activists are hoping to see shareholders ramp up pressure on the world’s highest-emitting companies over their inaction on climate change, as companies prepare for their Annual General Meetings (AGMs).
AGMs, most of which will be held virtually this year due to the COVID-19 pandemic, offer an opportunity for a company’s shareholders to scrutinise its board, vote on resolutions, and express concerns about the direction it’s taking.
In a sign that shareholders are increasingly willing to challenge companies’ sluggish efforts to cut emissions, AGMs that have taken place in recent weeks have seen increasing numbers of shareholders defying company leaderships and calling for more ambitious action. Major investors like BlackRock have also begun to take a more active role in pushing companies to up their climate commitments, after years of sitting on the sidelines.
With more votes on the way later this month and next, here are some of the key resolutions to look out for.
Paris-aligned Lobbying
A number of companies will face a push for greater transparency on their lobbying activities, with shareholders voting on several resolutions calling for assurances that companies’ lobbying is consistent with Paris Agreement goals.
The two largest US oil companies, ExxonMobil and Chevron, face votes on their lobbying at AGMs taking place on May 26.
Both companies are members of powerful oil and gas trade bodies including the American Fuel and Petrochemical Manufacturers (AFPM), which has refused to back the Paris Agreement and has been an influential force opposing climate measures in the US. French oil giant Total recently withdrew from the AFPM over the group’s lobbying activities, following an earlier departure from Shell.
Votes on lobbying alignment will also take place at major US airlines, United Airlines (May 26) and Delta (June 17). A climate lobbying resolution was due to be voted on at the AGM of car company General Motors in June, but this was later withdrawn for unknown reasons.
Emissions Disclosure
The finance sector is under particular pressure to disclose the greenhouse gas emissions of its activities at AGMs this year.
JP Morgan, which has lent more money to the fossil fuel industry than any other bank, according to a recent report by environmental organisations, faces pressure to disclose the carbon footprint of the money it lends when its shareholders vote at its AGM on May 18.
Similar votes have taken place at AGMs for other major fossil fuel financers, including at Citi, Bank of America, and Wells Fargo.
Earlier this month, nearly a quarter of shareholders of Barclays defied the British bank’s leadership on a different resolution calling for the phasing out of financing for fossil fuels.
Meanwhile, Chevron is facing plans to disclose the total emissions produced from its liquid natural gas (LNG) activities and demonstrate its gas business’ compatibility with Paris goals.
Paris-aligned Emissions Targets
While many oil and gas companies have voiced support for the Paris Agreement, recent assessments by environmental groups show that none have plans that align with the goals outlined in the agreement.
Shell will be the latest of the European oil majors to face calls to set and publish targets that are consistent with the Paris Agreement when its shareholders meet at its AGM on May 18.
Voting on the same resolution at BP and Equinor in recent weeks showed a significant increase in the number of shareholders backing the motion, put forward by campaign group Follow This.
Speaking after BP’s AGM, Mark van Baal, founder of the group, said: “Oil major boards rarely take the initiative to move on their own. The shareholders have to compel them to set targets, and have to support them to attain these targets.”
Jeanne Martin, from campaign group ShareAction, which is also backing the Shell resolution, told DeSmog voting for resolutions was one of the easiest and most high-impact ways for investors to influence companies on climate change, and urged shareholders to back climate resolutions at AGMs.
“A growing number of investors have committed to net-zero by 2050 in the past year. But you can’t boast about distant net-zero pledges and block climate action in the short-term. Investors need to put their money where their mouth is and vote for climate critical resolutions – or risk being called out for greenwashing,” she said,
Meanwhile, Exxon and Chevron both face calls to demonstrate how meeting a 1.5C global temperature target would impact their business model.
Votes on Company Climate Plans
Total is one of a number of companies putting forward its own climate plan for a non-binding vote, which they hope will demonstrate support for their strategy.
However, campaigners from climate groups such as Reclaim Finance have urged shareholders to vote down Total’s plan which they have said is “weak” and have called on shareholders to vote against CEO Patrick Pouyanne over the plan.
Consumer goods multinational Unilever and mining company Rio Tinto also put forward climate transition plans to their shareholders at AGMs earlier this month. Unilever’s plan was overwhelmingly accepted by its shareholders.
Votes on Board Members
Other company directors accused of not taking sufficient action on climate change also face a rebellion from shareholders.
Exxon CEO Darren Woods faces a vote over inadequate plans to put the company on track to reduce emissions, as does the rest of the Exxon board.
The CEOs of Chevron, the Southern Company and NextEra Energy, also face votes against them over concerns about their climate leadership.
Directors featured in a recent DeSmog investigation into bank board members’ ties to polluting industries have also been challenged by shareholders, including Adebayo Ogunlesi, a Lead Independent Director at Goldman Sachs and board member of Texas-based oil company Kosmos Energy.
Upcoming AGMs
- JP Morgan – May 18, 2021
- Shell – May 18, 2021
- NextEra Energy – May 20, 2021
- Chevron – May 26, 2021
- ExxonMobil – 26 May 2021
- United Airlines – May 26, 2021
- Southern Company – May 26, 2021
- Total – May 28, 2021
- Delta Airlines – June 17, 2021
