Update: Wespath's "Climate Change Impact Assessment Report" Resolution Passes at Occidental Petroleum
May 12, 2017
Shareholders overwhelmingly approved Wespath Investment Management’s (Wespath) resolution at Occidental Petroleum’s annual general meeting on May 12 calling on the company to provide a detailed report assessing the impact of climate change. The resolution, co-filed with the Nathan Cummings Foundation, received a historic 67% vote in favor and is the first of its kind in the United States to receive support from a majority of shareholders.
“We are grateful that a majority of our fellow investors recognized the urgent need for Occidental to inform us of possible changes to its business model as the world transitions to a low-carbon economy. This year, more than ever, we have seen a groundswell of support for robust climate risk reporting,” said Dave Zellner, Wespath’s Chief Investment Officer. “By voting for this resolution, investors are affirming that the preparation for a future that is less reliant on fossil fuels is an issue the global business community cannot ignore.”
Mr. Zellner added: “Wespath believes the historic 67% vote in support of our proposal at Occidental Petroleum represents a sea change in how investors are addressing the transition to a low-carbon economy.“
The resolution specifically asked Occidental to explain how capital planning and business strategies incorporate analyses of the short- and long-term financial risks resulting from a transition to a low-carbon economy. A similar resolution filed last year by Wespath and the Nathan Cummings Foundation received the support of 49% of Occidental’s investors.
Wespath believes this analysis is critical in understanding the company’s long-term resilience to an energy sector in transition, particularly in light of global efforts to support a shift to a low-carbon economy. These include commitments from Canada to reduce emissions and from China to invest significantly in renewable energy.
We were pleased to work with the Nathan Cummings Foundation and thank them and our other co-filers for partnering with us.
Wespath has been urging Occidental and its peers to disclose how a transition to a low-carbon economy could affect company sustainability and profitability.
Last month, Wespath withdrew a similar resolution filed at Chevron Corporation after the company published its Managing Climate Risks: a Perspective for Investors report. Although the report lacks a substantive discussion of Chevron’s strategies, we accepted the report as a first step toward explaining to investors how the company assesses climate change scenarios as an element of its strategic planning efforts. You can read more about Wespath’s rationale for withdrawal here.
Updated May 19, 2017