Oxy Shareholders Reject Climate Resolution

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Occidental Petroleum said Friday that its shareholders overwhelmingly voted against a proposal that would have required the company to set firmer medium-term carbon emissions reduction goals.

An Oxy spokesperson told Energy Intelligence that preliminary results from the company’s annual general meeting indicated that more than 83% of the votes cast opposed the proposal.

“The vote reflects the confidence Oxy’s shareholders have in the company’s net-zero strategy as well as the disciplined, rigorous targets we have established that not only align with the Paris Agreement but also are designed to reduce emissions in a manner consistent with our strategy, competitive strengths and value proposition,” spokesperson Eric Moses said via email.

The news comes a week after a similar proposal was rejected by shareholders of US refiner Valero.

Occidental had urged its shareholders to vote against the proposal, saying the company had already set and disclosed quantitative short, medium and long-term goals for direct and indirect emissions that align with the Paris Agreement.

But activist shareholder Follow This, which filed the resolution, had argued the company’s targets were not ambitious enough. In particular, the organization said that neither Oxy’s medium and short-term emissions targets nor its capital expenditure plans were aligned with the goal of limiting global warming to 1.5°C.

“Occidental has been a front-runner in the oil industry regarding their climate strategy," Follow This said in late April. "However, their medium-term target makes no assurance as to where their overall emissions will be in the medium term. A vote in favor of our resolution would indicate to the company that shareholders need a certain and clear commitment to Paris alignment.”

Chipping Away

Follow This Founder Mark van Baal said the 17% vote in favor of the proposal was still a significant portion. He pointed out that only 2.7% of Shell shareholders voted for a similar resolution the first time it came up in 2016.

“It’s a significant signal that investors are losing their patience with Big Oil’s refusal to curb emissions by 2030,” he said.

The activist investor has filed similar proposals at a number of other oil and natural gas companies, including all five supermajors and ConocoPhillips, the largest US independent. Those votes are scheduled to be conducted in the coming weeks.

Last year, Follow This won 21% of the votes for its resolution at UK supermajor BP, up from 8% in 2019. It is gradually winning more support from Shell shareholders as well. Accoding to Van Baal, Shell was the first European oil major to set goals for Scope 3 (end-use) emissions after 6% voted for the Follow This climate resolution. In early 2020, BP followed suit.

CO2 Emissions, Corporate Strategy , Capital Spending, ESG
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