PRESS RELEASE
Majority backs emission reduction targets in historic vote for Follow This climate proposal.
58% of ConocoPhillips shareholders vote for activist climate proposal requesting concrete emission reduction targets.
58% of shareholders in ConocoPhillips have voted for a proposal by Follow This to encourage the US oil company to reduce all of its emissions, in the highest show of support on a vote of its kind.
This sets a standard for the oil industry in the US and sets a high bar for the upcoming votes at Equinor, BP, P66, Shell, and Chevron.
Today was the first opportunity for investors to vote on emission reductions at Big Oil in the US since the Paris Climate Agreement. A majority of investors seized this opportunity to urge Conoco to reduce the emissions of its products (Scope 3). At the company’s AGM today, 58% of shareholders voted for the Follow This climate targets proposal (proposal 5), the company announced during its virtual AGM.
“This majority vote is a victory in the fight against climate change. By passing our climate proposal, investors urge Conoco and the entire oil industry to change to achieve the goal of the Paris Climate Agreement to limit climate change to well below 2°C,” says Mark van Baal, founder of Follow This. “Conoco cannot ignore this request from its shareholders.”
- First ever majority for an emission reductions climate proposal
- Activist climate proposal, filed by Follow This and ACCR, requests Conoco to set emission reduction targets for product emissions (so-called Scope 3 emissions)
- Emission reduction targets will drive a shift in investments away from fossil fuels to renewables
- Big Oil in the US needs to catch up with their European peers, who face shareholder votes since 2016
- The oil industry can make or break the Paris Climate Agreement
- Read the speech by Follow This at Conoco AGM
Why this matters
Product emissions (Scope 3) are the elephant in the room; oil majors prefer not to talk about them. “An oil major with only targets for its own emissions, is like a tobacco producer who quits smoking while continuing to sell cigarettes.”
“Conoco and its shareholders are at the same stage as was Shell in 2017,” said Mark van Baal from Follow This. In 2017 Shell rejected the same resolution with the same argument, that it did not want to take responsibility for the emissions of its products (Scope 3). By the end of 2017, Shell had set ambitions for all emissions, including Scope 3.
BP, Equinor, and Total followed the same pattern: first they refused, but after a substantial body of investors voted for the Follow This climate resolutions, they crossed the Rubicon by setting emission reduction targets for all emissions, including the emissions of their products, so-called Scope 3 emissions.
Thanks to investors
“We thank these investors for their vision. Binding targets are imperative. We don’t have time for discussions about who is responsible for product emissions. Oil majors need to start offering renewables so consumers can buy them.”
“We need oil majors to shift investments and to decrease emissions within this decade,” says Van Baal.
Fiduciary duty
“Only the biggest industry incumbents have the technical know-how, financial muscle, and market-making opportunities to rapidly scale an energy transition to renewables.”
“More and more investors recognise that the oil and gas industry can make or break the goals of the Paris Climate Agreement. These investors understand that achieving these goals is part of their fiduciary duty to protect all the assets in the global economy from devastating climate change. That’s why they vote for the targets in our climate resolutions.”
Targets drive investments
“We believe that only concrete targets for all emissions will lead oil majors to the necessary shift in investments from fossil fuels to renewables,” says van Baal.
“It is evident that the boards of oil majors do not move on their own initiative. Shareholders have to compel them to set targets, and have to hold them accountable for meeting these targets.”
“We thank the individuals within these institutional investors for their personal leadership. They are the real agents of change in the oil and gas industry.”
Shareholders change the world
“Most oil majors have become more powerful than many governments. Only their shareholders can change these multinationals.”
Rationale investors
“More and more institutional investors want all companies they have shares in to commit to Paris,” Van Baal said. “Because they foresee that they cannot make a decent return on their capital in a world economy disrupted by devastating climate change.”
Mission Follow This
“Climate change is now also on the agenda of Conoco, its shareholders and the US media and we will make sure it stays on the agenda until the energy transition is achieved. We will continue our mission: make sure the oil and gas industry makes instead of breaks the Paris Climate Agreement.”
Climate proposal
WHEREAS: In the coming decades, the world will reduce greenhouse gas (GHG) emissions to curb climate change. Companies that fail to reduce overall emissions will incur substantial financial risks, especially fossil fuel companies.
RESOLVED: Shareholders request the company to address the risks and opportunities presented by the global transition towards a lower emissions energy system by setting emission reduction targets covering the greenhouse gas (GHG) emissions of the company’s operations as well as their energy products (Scope 1, 2, and 3).
SUPPORTING STATEMENT: As responsible shareholders we perceive the increasing business risks to companies in the fossil fuel exploration and production sector. Fossil fuel companies are increasingly subject to GHG emission regulations, face climate change litigation, and encounter new competitors in the energy transition from fossil fuels to renewable energy. Meanwhile, the energy transition also provides great opportunities. Companies that are willing and able to engage in innovations and reforms are likely to survive and thrive.
We, the shareholders, therefore support ConocoPhilips in setting emissions reduction targets for all emissions (Scope 1, 2, and 3), the most simple and least prescriptive way to address these risks and opportunities.
The global political pledge to curb climate change, the resulting future regulations for the fossil fuel industry to reduce their overall emissions, and the decreasing costs of renewable energy add to the risk that capital expenditures in fossil fuel projects will become stranded assets. Furthermore, fossil fuel companies are increasingly sued for their role in the climate crisis: not only for their Scope 1 and 2 emissions but also for their Scope 3 emissions.
Reducing absolute emissions from the use of energy products (Scope 3) is essential to achieving the goal of the Paris Climate Agreement to limit global warming to well below 2°C above pre-industrial levels, to aim for a global net-zero-emission energy system, and to pursue efforts to limit the temperature increase to 1.5°C.
Backing from investors that insist on Paris-consistent targets for all emissions (Scope 1, 2, and 3) continues to gain momentum; in Europe, in 2020, an unprecedented number of shareholders voted for climate targets resolutions.
The company’s financial results currently greatly depend on the price of oil. Diversification in renewable energy is an increasingly viable opportunity to decrease risks.
Taking the above points into consideration, we encourage you to set targets that are inspirational for society, employees, shareholders, and the energy sector, allowing the company to meet an increasing demand for energy while reducing GHG emissions to levels consistent with the global intergovernmental consensus specified by the Paris Climate Agreement.
You have our support.
Company: ConocoPhillips
Date of the AGM: 11 May
Climate proposal: “Shareholders request the company […set…] emission reduction targets covering the greenhouse gas (GHG) emissions of the company’s operations as well as their energy products (Scope 1, 2, and 3).’ full text
Board’s voting recommendation and rationale: Against, “ConocoPhillips does not control […] how [energy] products are made, marketed and used.” (item 5, page 120)
- Paris-consistent long-, medium, and short-term emission reduction target (2.3), (3.3), (4.3): No
- Paris-consistent investments (6.1b): No
ConocoPhillips’ climate policies
- Scope 1 and 2: Net-Zero by 2050, 35 – 45% reduction in GHG intensity by 2030 (link)
- Scope 3: No targets. ‘[…] we have no control over how the raw materials we produce are transformed into other products or consumed’ (link)
Climate proposal
WHEREAS: In the coming decades, the world will reduce greenhouse gas (GHG) emissions to curb climate change. Companies that fail to reduce overall emissions will incur substantial financial risks, especially fossil fuel companies.
RESOLVED: Shareholders request the company to address the risks and opportunities presented by the global transition towards a lower emissions energy system by setting emission reduction targets covering the greenhouse gas (GHG) emissions of the company’s operations as well as their energy products (Scope 1, 2, and 3).
SUPPORTING STATEMENT: As responsible shareholders we perceive the increasing business risks to companies in the fossil fuel exploration and production sector. Fossil fuel companies are increasingly subject to GHG emission regulations, face climate change litigation, and encounter new competitors in the energy transition from fossil fuels to renewable energy. Meanwhile, the energy transition also provides great opportunities. Companies that are willing and able to engage in innovations and reforms are likely to survive and thrive.
We, the shareholders, therefore support ConocoPhilips in setting emissions reduction targets for all emissions (Scope 1, 2, and 3), the most simple and least prescriptive way to address these risks and opportunities.
The global political pledge to curb climate change, the resulting future regulations for the fossil fuel industry to reduce their overall emissions, and the decreasing costs of renewable energy add to the risk that capital expenditures in fossil fuel projects will become stranded assets. Furthermore, fossil fuel companies are increasingly sued for their role in the climate crisis: not only for their Scope 1 and 2 emissions but also for their Scope 3 emissions.
Reducing absolute emissions from the use of energy products (Scope 3) is essential to achieving the goal of the Paris Climate Agreement to limit global warming to well below 2°C above pre-industrial levels, to aim for a global net-zero-emission energy system, and to pursue efforts to limit the temperature increase to 1.5°C.
Backing from investors that insist on Paris-consistent targets for all emissions (Scope 1, 2, and 3) continues to gain momentum; in Europe, in 2020, an unprecedented number of shareholders voted for climate targets resolutions.
The company’s financial results currently greatly depend on the price of oil. Diversification in renewable energy is an increasingly viable opportunity to decrease risks.
Taking the above points into consideration, we encourage you to set targets that are inspirational for society, employees, shareholders, and the energy sector, allowing the company to meet an increasing demand for energy while reducing GHG emissions to levels consistent with the global intergovernmental consensus specified by the Paris Climate Agreement.
You have our support.
