Analysis: Big Oil gets reprieve for investors as energy worries trump climate concerns – Reuters

BOSTON/LONDON, May 13 (Reuters) – Big Oil has enjoyed an easier ride at shareholder meetings so far this year compared to a string of hostile investor votes last year linked to climate concerns , as these problems have been overshadowed by oil supply.

The big oil companies easily rejected several high-profile climate resolutions introduced by activist shareholders at the current round of annual general meetings.

The more favorable investor stance coincides with a spike in energy prices following Russia’s invasion of Ukraine and follows efforts by many companies to accelerate plans to transition to a low-carbon economy. carbon after years of pressure.

“Big Oil may have convinced some investors that the energy crisis trumps the climate crisis,” said Dutch environmental activist Mark van Baal of Follow This, an organization that has tabled a number of rejected resolutions during recent general assemblies, referring to the impact of the conflict in Ukraine.

Last year, companies faced an upsurge in shareholder support for resolutions and votes on environmental and social issues. ExxonMobil Corp (XOM.N), for example, voted three new directors onto the Texas-based company’s board, marking a historic win for activist investor Engine No. 1. read more

But that was then.

Only 15% of shareholder votes cast at BP’s (BP.L) annual meeting on May 12 backed a call for the British oil company to speed up its energy transition, compared to 21% in favor in a similar vote Last year.

Additionally, 17% of investors backed a call for emissions reduction targets at Occidental Petroleum Corp at its May 6 shareholder meeting, while 16% backed a measure on April 27 asking Marathon Petroleum Corp to report on how its transition plans have affected workers and communities. Read more

At ConocoPhillips (COP.N), 58% of votes cast last year supported a push to set emissions reduction targets. On May 12, only 42% backed a similar measure that also called on the Houston-based company to set global emissions cuts in line with Paris climate goals, according to a securities filing. Read more

Shareholder meetings at Exxon, Chevron and Shell (SHEL.L) are scheduled for later this month.

Analysts said investors’ abandonment of environmental priorities partly reflects their concerns as the war in Ukraine, which Russia describes as a “special military operation”, is tightening energy supplies.

Geopolitics has “provided a powerful plausible excuse to dither instead of engaging in vital climate action,” said Abhijay Sood, head of financial sector research for ShareAction, a nongovernmental organization that focuses on climate change. responsible investment.

Caitlin McSherry, director of investment management at asset manager Neuberger Berman, said investors could also respond to additional details many companies have released about their transition plans.

“That may have reassured some investors” to vote with management, McSherry said. Neuberger declined to discuss most of his votes in detail.

Occidental had argued that he had already set appropriate goals. A representative for the Houston-based company said the outcome of its annual general meeting “reflects Oxy shareholders’ confidence in the company’s net zero strategy as well as the disciplined and rigorous goals we have established.”

A spokesman for ConocoPhillips said the vote at its AGM supported its view that the shareholder proposal for the emissions was “not the right fit for an E&P (exploration and production) company with a portfolio and transition-oriented production”.

A representative for Marathon, based in Ohio, declined to comment on the vote at its AGM.

BP did not immediately respond to a request for comment.

BLACKROCK WITHDRAWAL

A likely market-wide driver has been leading asset manager BlackRock Inc , which said this week it would support fewer such resolutions on topics such as climate change as many were too prescriptive. Read more

The change in mood was also reflected in a series of similar votes at major Wall Street banks in April. Read more

Andrew Logan, senior director of oil and gas programs at Ceres, a Boston-based nonprofit that seeks investor support for climate proposals, said the weak results at general meetings could reflect how Activists have already convinced many companies to take action such as disclosing emissions, an easier change than making plans to reduce them.

“We’re striking a balance here in terms of what investors are willing to support. It’s a healthy process,” Logan said.

Some environmental resolutions at shareholder meetings still enjoy strong support. At Costco Wholesale Corp’s (COST.O) AGM on Jan. 20, 70% of votes cast backed a call for the big-box retailer to set emissions reduction targets. Costco, which is based in Washington state, did not immediately respond to a request for comment.

In the United States, at least, politics may also have played a role in voting at Big Oil, said Heidi Welsh, executive director of the Sustainable Investments Institute, which tracks shareholder resolutions.

Republicans in Texas, Florida and other US states have campaigned against companies they say have gone too far in imposing environmental or social policies. Read more

“It may be that the big (asset) managers have their eye on who gets elected in the fall and they don’t want to be in the crosshairs” of Republicans who are likely to win, Welsh said.

Reporting by Ross Kerber in Boston and Simon Jessop in London; Additional reporting by Ron Bousso in London, Sabrina Valle in Houston and Liz Hampton in Denver; Editing by Paul Simao

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