Capital Monitor: Investor support for holding Big Oil companies’ feet to the fire appears to be growing in Europe, but fading in the US.
By Paul Hodgson
– Five climate resolutions were filed by a total of 20 investors with over €2 trn in AUM at Shell, BP, ExxonMobil, Chevron and TotalEnergies this year.
– The resolutions claim oil majors have no credible plans to drive down overall emissions this decade and ask they align 2030 Scope 3 emissions targets with the Paris Climate Agreement.
– The voting results at each of them were very mixed, though few investors have divested their shares as a result.
At BP’s AGM, 17% of shareholders voted in favour of the climate resolution, up from 15% in 2022. At Shell, the same proportion of shareholders (20%) voted in favour of a similar resolution in 2022. Described as a “shareholder rebellion”, 30% of shareholders supported the resolution at TotalEnergies, up from 17% in 2020.
“CA100+ failed the litmus test”
CA100+ lead Dutch investors, MN and PGGM, encouraged other investors to vote in favour at Shell’s AGM by pre-declaring their votes and flagging the climate resolution in the CA100+ alliance – CA100+ is an investor-led initiative designed to push companies to take action on climate change.
“When 80% of shareholders voted against the lead investors on the shareholder resolution at Shell, you can understand Shell saying – you don’t represent the opinions of CA100+. As an organisation, CA100+ failed the litmus test,” says Follow This’ Van Baal. Van Baal also notes that at Shell, “up to 99% of shareholders voted along with the board on the other 24 resolutions”, thus even a 20% level of support “clearly indicates shareholder discontent”.
Big oil: Ready to wave goodbye?
So, is it time to divest from Exxon and Chevron and other big oil companies? Van Baal thinks not. “Divestment doesn’t work. An investor can say ‘I can clean my portfolio, I can sell off all the fossil fuels’, but it won’t help clean the world. And my remaining portfolio will still be in danger of devastating climate change.”
Van Baal points to another divestment failure; the tobacco industry. “Divestment doesn’t work to get rid of industries. Most European pension funds have excluded tobacco holdings, but Big Tobacco still exists.”
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Read the entire article by Paul Hodgson {tag on LinkedIn} in Capital Monitor: https://capitalmonitor.ai/institution/investment-managers/how-investors-voted-on-climate-change-at-big-oil-agms/
