Phillips66 shareholders request concrete emission reduction targets.
An undisclosed majority of shareholders in Phillips66 approved the climate proposal by Follow This to set reduction targets for all emissions. During the virtual AGM today the company said that the votes cast were “more than the votes required for approved of the proposal” without disclosing the percentage. The resolution needed a majority to be approved.
On Tuesday, 58% of shareholders voted for a similar Follow This resolution at ConocoPhillips (read Reuters or Follow This press release). BP still hasn’t published the votes for a similar climate resolution (more than four hours after the AGM adjourned).
This raises the expectations for the upcoming votes at Shell and Chevron.
Today was the second opportunity for investors to vote on emission reductions targets at Big Oil in the US since the Paris Climate Agreement. A majority of investors seized this opportunity again to urge Phillips66 to reduce the emissions of its products (Scope 3).
“This majority vote is a victory in the fight against climate change. By passing our climate proposal, investors urge Phillips66 and the entire oil industry to change in order 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. “Phillips66 cannot ignore this unequivocal request from its shareholders. Big Oil can make or break the Paris Accord. Investors in oil companies are saying now: we want you to act by decreasing emissions.”
- Activist climate proposal, filed by Follow This and ACCR, requests Phillips66 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 have faced shareholder votes since 2016
- Statement by Follow This for the 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.”
“Phillips66 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. 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 the 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.
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.”
“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 Phillips66, 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.”