A large coalition of shareholders in several energy companies
has recently published resolutions focused on provoking corporate
responses to climate change. In early 2015, 150 investors in BP Plc
("BP") and Royal Dutch Shell Plc ("Shell")
published resolutions with the two companies demanding several
responses. Specifically, the resolutions call for the companies to:
(i) test whether their business models are compatible with the
"2C target," the international community's pledge to
limit global warming to two degrees on the centigrade scale (3.6
degrees Fahrenheit); (ii) restructure the corporate bonus systems
to no longer reward climate-harming activities; (iii) commit to
reducing emissions and investing in renewable energy; and (iv)
disclose how their public policy plans align with climate change
mitigation and risk. These measures will be put to a vote at BP and
Shell's annual general meetings ("AGM"), in April and
May 2015, respectively. In a January 29, 2015, letter to the
shareholder coalition regarding the resolution, Shell stated its
intention to recommend that shareholders support the resolution at
its AGM.
The BP and Shell resolutions are notable for the size of the
investors involved in the coalition. One of the driving forces
behind the resolutions was the "Aiming for A" investor
coalition, organized by CCLA Investment Management, a charity fund
manager. The "Aiming for A" coalition was established
with the goal of engaging with the 10 major UK-listed utilities and
extractives companies to earn an "A" in the Carbon
Disclosure Project's Carbon Performance Leadership Index. The
BP and Shell resolutions are the first shareholder resolutions
published by the coalition.
CCLA manages, among other things, more than US$2.35 billion of
Church of England money. The full co-filing group in the BP and
Shell resolutions comprises more than 50 institutional investors,
including UK churches, charities, and local authority pension
funds, as well as clients of Rathbone Greenbank Investments and
individual supporters. Eight of the co-filing pension funds have
assets higher than US$15 billion. The co-filing group is being
assisted by ClientEarth, an environmental law firm, and
ShareAction, a shareholder action group
The kind of shareholder resolutions filed with BP and Shell are
becoming increasingly common. According to Ceres, more than 100
similar resolutions related to climate change, carbon asset risk,
and greenhouse gas emissions have already been published for 2015.
The actions requested by these types of resolutions take many
forms. Proposed resolutions were filed with several large banks,
urging the banks to disclose information about the loans they make
to "oil, gas, coal and other companies whose practices create
carbon emissions."
As previously reported in the Fall 2014
Climate Report, multiple shareholder proposals by state
pension funds in New York and Connecticut were filed in 2014 with
five energy companies, requesting that they (i) report on their
progress in achieving the Obama administration's goal of an 80
percent reduction in greenhouse gas emissions by 2050, (ii)
consider innovative energy generation technologies and strategies,
and (iii) evaluate best practices among domestic and international
peers. More recently, the Vermont Pension Investment Committee
approved the co-filing of a resolution asking ExxonMobil to report
to shareholders by the end of November 2015 about its plans for
reducing total greenhouse gas emissions from its products and
operations. And a resolution filed in November 2014 with ExxonMobil
called for the company to return capital to shareholders rather
than invest in high-cost, high-carbon oil projects.
As coalitions such as "Aiming for A" become increasingly
active, the number of resolutions, and the amount of assets
implicated, can be expected only to grow.
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