Chevron Corp. shareholders on May 26 voted in favor of a proposal to cut emissions generated by the use of the company’s products, a move that underscores growing investor push at energy companies to reduce their carbon footprint.
Shareholders voted 61% in favor of the proposal to cut so-called “Scope 3” emissions, according to a preliminary count announced by Chevron at its annual general meeting.
Although the proposal does not require Chevron to set a target of how much it needs to cut emissions or by when, the overwhelming support for it shows growing investor frustration with companies, which, they believe, are not doing enough to tackle climate change.
Exxon Mobil Corp., Chevron’s closest rival, lost two director seats to Engine No. 1, a tiny activist hedge fund, which holds a stake barely worth $50 million in a company, whose market value is $250 billion.
A Dutch court on May 26 also ordered European oil major Royal Dutch Shell Plc to significantly deepen planned greenhouse gas emission cuts, a landmark ruling that could pave the way for legal action against energy companies around the world.
Oil and gas companies have long argued that they have little control over how their products are used, but with rising investor pressure they are forced to find new ways to cut emissions and fall in line with global climate change pledges. U.S. President Joe Biden has pledged to reach net-zero emissions by 2050.
Chevron shareholders approved the slate of directors and executive pay by 96% and 94% votes, respectively, although they voted heavily in favor of other proposals Chevron had opposed.
One proposal, which called on Chevron to prepare a report on the impact its business would have from the net-zero 2050 scenario, was narrowly defeated with about 48% votes in favor of it.
Another proposal demanding the company report more information on its lobbying activities also received about 48% votes.
Chevron has pledged to limit carbon emissions that contribute to climate change, but has not set long-term targets to achieve net-zero as many European oil companies have done.
Daniel Rice, former CEO of Rice Energy who now sits on the EQT board, addressed the elephant in the room earlier this month at Hart Energy’s Energy Capital Conference.
Denbury Resources and Penn Virginia mutually agreed to terminate their merger after the $1.7 billion cash-and-stock transaction faced difficult market conditions and shareholder opposition.
Realizing the benefit of having diversity of thought to help drive innovation, profits and efficiency among other areas, companies and industry organizations have formed initiatives to encourage women to seek out careers in oil and gas.