Oil cos played hardball in bid to defeat climate outsiders
HOUSTON, June 29, (RTRS): Petty legal filings. Diversionary ballot measures. Counting abstentions as no votes. These are just some of the tactics US oil companies used this spring to quash efforts by investors to win the right to nominate climate experts for board seats.
Led by New York City Comptroller Scott Stringer and proposed at 75 US companies in various industries this year, the so-called proxy access measure would give investor groups who own 3 percent of a company for more than three years the right to nominate directors. At the 19 oil and gas companies targeted, the aim was to demand more accountability on global warming.
While the non-binding measure passed at two-thirds of all the companies targeted, and at 15 of the 19 energy companies, some took unusual steps to block it. Oilfield services provider Nabors Industries Ltd, for example, counted non-votes from brokers as votes against the proposal. Still, the measure passed at Nabors, which didn’t respond to requests for comment.
Shale oil company Pioneer Natural Resources Co filed a last-minute counterproposal calling for a higher ownership threshold of 5 percent, which institutional investors say is much harder to obtain. Pioneer said it gave sharehold- ers extra time to vote. Stringer’s proposal failed.
Exxon Mobil Corp and Chevron Corp tried to block the proposal by arguing the New York City pension funds behind it had not shown proof of owning their shares for a full year. The proposal passed at Chevron and narrowly failed at Exxon.
The 15 victories at energy companies show that investors think the companies must do more to address climate change risks — which range from shortages of water needed for drilling to hefty carbon taxes governments could impose on fossil fuel producers, fund managers said.
“ExxonMobil received this (proxy access) proposal due to its exposure to risk related to climate change,” James Andrus, a representative from Calpers, told Exxon’s annual meeting.
The outcome also shows companies miscalculated the groundswell of support for more climate accountability ahead of the UN conference on global warming in December, fund managers said.
A simple majority was needed for the non-binding proposal to pass. Of the 19 targeted energy companies, all opposed the measure, except for shale oil producers Apache Corp and
Whiting Petroleum Corp.. The other two companies where the measure failed were Cabot Oil and Gas Corp and Noble Energy Inc.
Stringer characterized Chevron and Exxon’s maneuvers as “petty legal actions” in a statement made in February. The US Securities and Exchange Commission sided with New York.
Because the measures are non-binding, corporate boards can either ignore