What’s Going on Here?
This year, ‘Big Oil’ companies are facing investor backlash as demand increases for them to align with the goals laid down by the Paris Agreement, and limit global Greenhouse Gas (GHG) emissions to 1.5 degrees Celsius.
What Does this Mean?
Every year, public companies hold their Annual General Meeting (AGM). This is when a company’s board of directors seek shareholder approval on annual business matters. Items such as board re-election, executive compensation structures, and (more commonly) approval of its climate strategy. AGMs also allow shareholders to file “proposals” to the board recommending certain actions be taken by the company.
Investors in ‘Big Oil’ have shown that they want companies to demonstrate their transition strategy for a low-carbon economy, and critically, to do so on a faster timeline than currently proposed . Over 30% of shareholders of TotalEnergies supported a resolution recommending the company switch to cleaner energy. Similar demands were made by shareholders of Shell, Exxon Mobile, and BP.
The demands made by shareholders at these AGMs reflect growing discontent towards the lack of progress in lowering emissions and the push to hold companies accountable for business-caused impacts. Recent AGMs have been accompanied by protests from climate activists. Both the TotalEnergies and Shell AGMs ended with police breaking apart demonstrations.
Why Should We Care?
The ‘Oil Majors’ account for about 12% of oil and gas reserves, 15% of production, and 10% of estimated emissions from industry operations according to the IEA. While Big-Oil Companies have committed to decarbonization and reducing their scope 1 and scope 2 emissions – very few have committed to lowering their scope 3 emissions (as of the end of 2022).
Scope 3 accounts for over 80% of the industries’ total emissions and thus has a big impact on how we address climate change. This combined with reports of future extractions and the industry’s history of climate change denialism means investors are sceptical of Big Oil’s climate strategies. That scepticism is resulting in an increase of climate resolutions at AGMs.
Be Curious!
- Own stock in a public company? See if you can file your own shareholder resolution!
- Use your voice and join a climate protest! Non-violent demonstration can be an effective communication tactic.
- Read about past events where shareholders made impact!
