Vote Your Pension has launched a worldwide campaign to tackle climate change in two big oil companies. The shareholder action platform is asking its users to support its movement to make ExxonMobil and Chevron change their business models to suit the global 2°C climate change target.
Vote Your Pension is calling on millions of people worldwide to use its platform to urge their pension funds to support resolutions at both companies’ AGMs on May 25. The resolutions aim to put the two biggest US oil companies on a low-carbon pathway.
The Asset Owners Disclosure Project (AODP), ShareAction and SumofUs, which run Vote Your Pension, are calling on pension funds and other asset owners to actively use their voting rights to drive Exxon and Chevron, the two biggest US oil companies, towards a low carbon future.
Catherine Howarth, Chief Executive of ShareAction, said: “ExxonMobil and Chevron have business strategies that are simply incompatible with staying well below 2°C, as countries committed to in Paris last year.
“Although these companies’ stock is owned by most pension funds, their business models do nothing to serve the interests of working people, especially younger people, who are the ordinary members of these funds.
“Our future wellbeing depends on preventing catastrophic temperature rises, so why would we not challenge companies owned by our pension funds that are undermining our shot at a safe future?
“ShareAction is pleased to support shareholder resolutions filed this year to push US oil giants to commit to firm action on climate change. It’s right that people with retirement savings should have the chance to raise these profound concerns.”
Vote Your Pension enables ordinary people to leverage their power as retirement fund investors to drive climate action. It is the world’s largest shareholder engagement campaign with direct links to more than a thousand pension funds.
Shareholders can now use its platform to call on funds to vote in favour of shareholder resolutions that would make Exxon and Chevron start to acknowledge climate risk, diversify their companies and disclose their lobbying activities. Two of the resolutions have already gained huge shareholder support from large funds and the campaign has already seen contacted 1010 funds in 46 countries asking them to declare their voting plans.
Julian Poulter, CEO at AODP, said: “The large retirement funds and their fund managers who control these companies have now reached a tipping point of credibility around engagement as way to protect member’s money from climate risk.
“We understand their wholesale rejection of divestment but now they must prove that company engagement can work. These resolutions are the beginning of the critical process to diversify big oil. This is a quadruple win-win as the company executives, shareholders, employees and governments all benefit from a smooth diversification and just transition of these companies.”
This year’s AGMs are the companies’ first since the Paris Climate Summit. In the last year, the industry has suffered from low commodity prices that have weakened profit margins.
In April, Exxon posted its smallest profit for any quarter in 16 years and Chevron reported a first quarter loss in 2016. Adding to this, Mark Carney, Governor of the Bank of England and chairman of the International Financial Stability Board, has warned that climate change action could make huge reserves of coal, oil and gas unburnable stranded assets. The financial case for reform and diversification has never been clearer.
Furthermore, investors are beginning to recognise the need to protect portfolios from climate risk, as revealed by last week’s AODP Global Climate 500 Index, which evaluates the success of the world’s largest asset owners at managing climate risk.
Liz McDowell, Campaign Director of SumofUs, said: “SumOfUs members around the world are fed up with their retirement savings being used to support risky and irresponsible decisions by fossil fuel companies.
“Over 15,000 members have contacted their pension funds, superannuation funds and other investment vehicles to demand that Exxon and Chevron diversify away from fossil fuels. Through the Vote Your Pension platform, ordinary people are exercising their shareholder power to hold corporations to account.”
Even as the campaign got underway, news emerged that global proxy advisers Glass Lewis and ISS who control a large portion of votes are split on their direction with ISS supporting disclosure of Exxon, and Chevron lobbying activities and Glass Lewis voting with the company boards.
Julian Poulter added: “It is encouraging the ISS and Glass Lewis want to see 2°C stress testing but disappointing that they can’t take the simple next step to broaden big oil companies into a low carbon future by voting for item 13 to report output as a broad energy company rather than just as an oil company.
“The cushy relationships between the companies, proxy advisers and funds who don’t want to ‘rock the boat’ are actually owned by ordinary workers who now demand transparency of the Exxon and Chevron voting decisions.
“The secretive world of proxy advice now needs to play out in the open and Glass Lewis and ISS must stop playing politics and start thinking about long term value risk management and value creation for end beneficiaries.”