Shareholder climate activists aim for ‘watershed year’

By Corbin Hiar | 01/07/2022 06:52 AM EST

Darren Woods, Exxon.

Exxon CEO Darren Woods listens as President Trump speaks during a meeting with energy sector leaders in the White House in 2020. AP Photo/Evan Vucci

Sustainable investment advocates passed three dozen environmental, social and governance-related shareholder resolutions in 2021, a record-breaking annual tally.

This year, they plan to keep the ESG pressure on with resolutions that push for corporate net-zero emission plans and lobbying disclosures at a wide range of firms — from major emitters like Exxon Mobil Corp. to comparatively modest polluters like the Cheesecake Factory Inc.

"The theme is that investors are looking to all of their companies to address climate risk," said Danielle Fugere, the president and chief counsel of As You Sow.

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Last year, 14 ESG resolutions backed by the sustainability advocacy group were voted on by shareholders of some of the nation’s largest companies, according to data compiled by the Manhattan Institute think tank. More than a quarter of As You Sow’s proposals were supported by those investors.

The group’s winning resolutions included one urging plastic maker DuPont de Nemours Inc. to report on its pellet pollution and another calling for the industrial conglomerate General Electric Co. to create a plan to achieve net-zero emissions by 2050 (E&E News PM, July 15, 2021).

Less than a week into 2022, As You Sow has already filed 79 resolutions, 30 of which are directly focused on corporate climate policies. While some of those will be withdrawn if the group and companies can reach agreements on the issues, many will be decided at annual investor meetings.

The companies being targeted by As You Sow include major emitters like Exxon and utility Dominion Energy Inc., as well as insurers like Chubb Ltd. and the Hartford Financial Services Group Inc., which continue to underwrite new fossil fuel projects (Climatewire, Sept. 20, 2021).

The sustainability group is also targeting companies with relatively small carbon footprints like the Cheesecake Factory and Foot Locker Inc.

"We’re not just looking at the largest companies but looking down supply chains," Fugere said. That broader perspective can "drive reductions across enterprises and across business because that builds it into the system."

The goal is to "reduce the fossil fuels across the board," she said.

Other activist investors are working to ratchet up the pressure on U.S. oil and gas producers.

The Dutch group Follow This has filed resolutions with Exxon, Chevron Corp., Marathon Petroleum Corp., Occidental Petroleum Corp., ConocoPhillips Co. and Phillips 66 Co.

"Our theory of change is along these lines: when a few oil majors change course shareholders and customers will reward them; others will be sure to follow," Roos Wijker, a spokesperson for Follow This, said in an email.

"Investors can no longer focus on the short-term interests of Big Oil alone," she added. "They must safeguard the long-term interest of their entire portfolios invested globally."

Last year, Follow This went three-for-three with successful emissions-reduction resolutions at Chevron, Conoco and Phillips 66.

But the most high-profile shareholder climate campaign victory last year was secured by Engine No. 1. The hedge fund succeeded in ousting three directors from Exxon’s board (Energywire, June 3, 2021).

Engine No. 1 declined to comment on its shareholder advocacy plans for this year.

Other investment groups predicted more shareholder successes in the months to come, particularly around reducing biodiversity loss and increasing emission reduction ambitions.

"Recent years have shown an unprecedented willingness for investors to use their voices to push for tangible progress on climate related goals: 2022 promises to be another watershed year," Claire Schiff, a spokesperson for BNP Paribas Asset Management, said in an email.

Reporter Mike Lee contributed.