Chevron Shareholders Strongly Support Wespath’s Call for Climate Resilience “Stress-Test”
A resolution co-filed by Wespath and British investor, Hermes EOS, asking Chevron to “stress-test” its portfolio in anticipation of a lower-carbon future received strong support at its May 25 annual general meeting. The resolution received a 41% vote in favor, a significant showing for a first-time filing.
The resolution specifically asks Chevron to evaluate the impact of fluctuating supply and demand for its products against a rapidly transforming energy sector and amidst clear shifts in public policies aiming to address climate change. Most notably, 195 countries came together during the Paris climate talks in December 2015 and agreed to establish a long-term goal to limit warming to less than 2-degrees Celsius from pre-industrial levels. We believe this type of analysis is critical in understanding a company’s long-term strategic positioning.
Wespath Chief Investment Officer, David Zellner, said: “Our resolution asked Chevron to conduct ‘stress tests’ on its business of plausible scenarios resulting from shifting demand for fossil fuels and the impact of carbon taxes. As investors, we need assurance that Chevron, and other companies in our funds, are strategically positioned for the transition to a low-carbon economy.”
A similar “stress-test” resolution we co-filed at Occidental Petroleum—the first of its kind filed with the company—received a 49% vote in favor in April, another strong show of support for a first-time resolution. More information about our other climate change-related engagements can be found here.
This proxy season, shareholders like Wespath have sent a clear signal to the companies in which they invest that climate change is an issue the global business community cannot ignore—shareholders have filed a record number of climate-related resolutions, which have received higher levels of support than ever before.
We will continue to urge Chevron and its peers to disclose how a transition to a lower-carbon economy could affect company sustainability and profitability.
Posted June 3, 2016