Shareholder Resolution & Director Votes
At Chevron Corporation’s annual general meeting in late May 2022, we are calling on investors to do two things:
- Vote in favour of the Follow This shareholder resolution that calls on the company to publish medium- and long-term targets to reduce the greenhouse gas emissions of the company’s operations and energy products consistent with the goals of the Paris Climate Agreement.
- Vote against the Lead Director Ronald Sugar and Chairman/CEO Michael Wirth on the basis of their failure to oversee climate performance of the company.
The Follow This Resolution
In 2021, Follow This filed a resolution at Chevron which was supported by 61% of investors. The success of this resolution prompted Chevron to publish its first target covering the greenhouse gases released by use of its products (Scope 3). Chevron pledged to reduce the carbon intensity of its operations and products (Scope 1, 2, and 3) by 5% by 2028.
Follow This founder, Mark van Baal responded by saying “The scientific consensus is clear: the world needs to reduce absolute emission by around 40% by 2030 to have any chance to achieve the Paris Accord. Until Chevron’s targets reflect this fact, their strategy falls short of Paris-alignment. 5% is disappointing tokenism, not a serious attempt to confront the climate crisis”.
Chevron is the second largest US oil company. In 2019 Chevron’s disclosed emissions amounted to 697 million tonnes of carbon dioxide equivalent. It is estimated the company’s total planned emissions from 2018 to 2030 will account for 1.3% of the global 1.5C carbon budget. A September 2021 CarbonTracker report estimates that Chevron needs to reduce oil and gas production 52% by the 2030s to be on track with limiting global warming to 1.5°C.
The resolution filed by Follow This in 2022 recognises that shareholders need to protect assets against devastating climate change, and requests Chevron “to set and publish medium- and long-term targets to reduce the greenhouse gas emissions of the Company’s operations and energy products consistent with the goal of the Paris Climate Agreement”.
We recommend that investors back the Follow This resolution at Chevron, to send a signal that emissions from the oil and gas sector must reduce significantly this decade.
Follow This has also filed resolutions at a further 8 oil majors in 2022.
The Majority Action Director Votes Recommendation
Follow This’ resolution is not the only action shareholders can take on climate at Chevron’s AGM this year.
Votes against Lead Director Ronald Sugar and Chairman/CEO Michael Wirth are warranted. Shareholder advocacy group Majority Action is calling for investors to vote against Lead Director Ronald Sugar and Chairman/CEO Michael Wirth for their failure to undertake necessary action.
Chevron’s net-zero emissions by 2050 aspiration covers only its Scopes 1 and 2 emissions, excluding Scope 3 emissions. As outlined above, it has set a target of reducing the carbon intensity of its portfolio across Scopes 1, 2 and 3 by only 5% by 2028. This provides no guarantee that the company’s Scope 3 emissions will fall in absolute terms.
According to Carbon Tracker, 70-80% of Chevron’s sanctioned and unsanctioned capex fall outside the IEA “Beyond 2 Degrees” Scenario, and the company must cut production by more than half by 2030 to remain aligned with the IEA NZE Scenario.
Oil and gas companies must fully align their policy influence activities, including political spending and lobbying, with the policy settings required to accelerate sector-wide emissions on a timeline necessary to limit warming to 1.5°C. This includes provide full disclosure of all political and lobbying spending in all jurisdictions, and ensuring similar alignment any trade associations or similar entities of which they are members or to which they contribute, or cease membership of such organizations. According to Influence Map, the company receives a near-failing “E+” rating (on a A-F scale) for its obstructive climate policy engagement.
As the second biggest US oil company, Chevron has the power to accelerate or stall the decarbonization necessary to limit warming to 1.5℃. However, without the necessary leadership, sufficient climate action will not be taken. Therefore, this year investors must vote against Lead Director Ronald Sugar and CEO and Chairman Michael Wirth.