Citing climate differences, Shell walks away from U.S. refining lobby

Last month. Reuters wrote an article entitled “Citing climate differences, Shell walks away from US refining lobby.” Here are the lead paragraphs.

“Royal Dutch Shell Plc on Tuesday became the first major oil and gas company to announce plans to leave a leading U.S. refining lobby due to disagreement on climate policies.

The review is part of Shell’s drive to increase transparency and show investors it is in line with the 2015 Paris climate agreement’s goals to limit global warming by reducing carbon emissions to a net zero by the end of the century.

It is also the latest sign of how investor pressure on oil companies, particularly in Europe, is leading to changes in their behavior around climate. Last year, Shell caved in to investor pressure over climate change, setting out plans to introduce industry-leading carbon emissions targets linked to executive pay.”

Shell is not the first oil company to cave to investor pressure. Exxon Mobil and Occidental Petroleum (along with utility PP&L) have to inform shareholders of their progress to addressing climate change after shareholder votes required them to do so. Exxon also has two lawsuits it is dealing with accusing them of misleading investors on the financial impact of climate change.

Climate change is real and is impacting us now. The greater number of sunny days coastal flooding, increased number of droughts, increased and more severe forest fires and the added flooding due to slow moving storns are traceable to the impact of climate change, so says climate scientists. I encourage you to ask politicians what they propose to do about this existential threat to our future. If they do not respond or fail to offer any tangible ideas, do not vote for them. We must move forward as we have squandered much of our window to act.

 

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Corporate shareholders are acting on climate change

While fossil-fuel funded politicians avoid addressing climate change and strip away governance enabling industry polluters, shareholders have been picking up the baton. Last week, Reuters published an article called “Chevron ties executive pay to methane and flaring reduction,” which defines specific gas emissions targets.

The article penned by Jennifer Hiller notes that it is not just executives with incentive plan targets to reduce emissions. 45,000 employees also have incentive plan emission targets. In other words, their pay is tied to combatting climate change. The intermediate goal is to reduce gas emissions by 25% by 2023.

While Chevron is the first to tie incentives to reducing gas emissions, in the month before the current US President announced our pullout of the Paris Climate Change Accord, three energy companies -ExxonMobil, PP&L and Occidental Petroleum – announced shareholder votes requiring management to report on efforts to address climate change. The Exxon-Mobil vote is telling in that they face a shareholder lawsuit and one by the New York Attorney General, Barbara Underwood, for misrepresenting the impact of climate change on their business to investors.

Per The Guardian, the NYAG lawsuit notes Exxon’s “longstanding fraudulent scheme” to downplay the impact of climate change including under-representing the “proxy costs” of fossil-fuel extraction. This lawsuit follows a three-year investigation and uses Exxon’s own research and scientists’ speeches against them. Before they took a “global warming is a hoax” public relations stance around the turn of the century. Exxon was active in climate change research. Even Shell produced a video in the 1990s that was made for educational purposes about the dangers of climate change.

But, it does not stop there. Well before fossil-fuel company shareholders made these impositions on management, more forward thinking companies like Amazon, Facebook, Google, IKEA and Walmart have invested in renewable energy like wind and solar energy. IKEA and Walmart are using their expansive store rooftops to place solar panels, while the three technology companies have used all of the above renewable energy strategies to power their  data centers. In my state of NC, these companies have helped propel the state forward as a top four solar energy state.

Let me close with my favorite Super Bowl commercial of last week, Budweiser produced a commercial that noted their beer is now being produced by wind energy. Seeing the Clydesdales meander down a road surrounded by windmills was a beautiful sight. It showed this is not a future goal – it is here. And, just to show it is making a difference, over 1/3 of Iowa’s electricity is produced by wind energy and Germany just announced renewable energy now exceeds coal energy as the biggest electricity source and they plan to be 100% renewable energy powered by 2038, twenty years from now.

Interesting thing is happening at energy company shareholder meetings

An interesting development occurred at annual shareholder meetings of two major companies in the energy business – PPL Corp, a utility serving Pennsylvania and other states and Occidental Petroleum Corp. A shareholder instigated vote took place at each firm and passed over the recommendations against it by their Boards of Directors. The proposal is for each company to share formally a report on what they intend to do about climate change.

Per the website “Financial Advisor” the following was reported earlier this month about the Occidental vote:

“The proposal received the backing of Occidental’s largest shareholder, $5.4 trillion asset manager BlackRock Inc. BlackRock, which owns a 7.8 percent stake in the oil explorer, said it took action due to the “lack of response” on the issue by the company and a lack of improvement in its climate-change related reporting following a similar proposal last year which received more than 40 percent support.”

The shareholder proposals are at the impetus of CalPERS, one of the largest pension trust funds in the world and a major investor in each company. Other state pension trust funds are supportive of CalPERS’ push. A similar vote was taken recently at Royal Dutch Shell and was defeated, with another vote scheduled at ExxonMobil. It should be noted that institutional investor groups are recommending against these proposals, but two have passed.

With a White House at odds with the rest of the world on climate change, we will need a groundswell of advocacy. Fortunately, we are passed the tipping point on renewable energy due to falling prices and rapidly increasing jobs. And, some of these same companies are advocating the US stay in the Paris Climate Change accord. Yet, the US cannot leave the table. To assure that we remain, we need these kinds of shareholder votes and other advocacies.

The White House has now canceled two meetings to discuss the future of our involvement in the Paris Climate Change. I believe this is in reaction to the push back from business. We cannot backtrack on this and other environmental issues. Let’s push forward and, if the President does not want to play a role, we and the rest of the world can leave him behind.