Global warming activists bring commitments from U.S. oil groups

In response to shareholder resolutions requesting reports on their preparedness for world constraints on carbon dioxide emissions, three U.S. oil and gas companies have committed to develop new policies. Three others refused the requests and saw large numbers of shareholders voting against management on the resolutions.

Valero, the largest independent refiner in the U.S., committed to reducing 2008 emissions by five per cent, or 1.8 million tons per year. In addition, the company significantly expanded the climate change disclosure on its website.

“We commend Valero on its forward-looking response to manage a very serious risk facing the oil and gas industry,” said Caroline Williams, chief financial and investment officer of Nathan Cummings Foundation, and filer of the resolution to Valero. “We also look forward to working together to make sure that the company is positioned to benefit from, not be blindsided by, the growing public and investor awareness and concern about climate change, [greenhouse gas] emissions and long-term shareholder value.”

Devon’s shareholders withdrew their resolution when the company agreed to expanded disclosure on climate change.

ChevronTexaco, in response to a resolution requesting further investment in renewable energy last year, has taken the industry lead on climate change. The company is the only oil company to disclose its complete greenhouse gas footprint, including emissions from the end use of its products.

ChevronTexaco has taken the unprecedented step of assuming a cost for carbon (of $5-$20 per ton) whenever it considers a new capital investment. The company is also considering a major investment in renewable energy.

Ignoring shareholder concerns

Record numbers of investors voted against management on the proposals at three other oil companies that refused to address shareholder concerns. Thirty-seven per cent of Houston-based Apache’s shareholders, 28 per cent of Anadarko shareholders and 27 per cent of Marathon shareholders voted in favour of the resolution.

“While others in the industry have felt it prudent to address climate change at the highest levels of their organisations, Apache’s only public statement on climate change and the risk of emissions constraints has been on the 2004 proxy, in arguing against our proposal,” said Steven Heim, director of research at Boston Common Asset Management, and a filer with Apache. “We hope that the enormous number of investors – a record 37 per cent – requesting this disclosure will spur Apache into action to safeguard long-term value.”

Shareholder filers of the resolutions include New York State pension funds, a foundation, socially responsible investment firms and a number of religious pension funds associated with the Interfaith Centre on Corporate Responsibility. Resolution filings were coordinated with assistance from CERES, a coalition of investors and environmental groups promoting investor awareness of the risks of global warming.

“Religious pension funds are concerned about stewardship of the planet, as well as stewardship of their substantial holdings, and so have been requesting this type of information for a long time,” said Leslie Lowe, director of energy and environment programmes at ICCR. “We are heartened to see this industry starting to wake up to the reality that not only should it respond, but that it has the capital and technical know-how to lead into the new energy realities of the 21st century. We hope all companies will head in this direction.”