Column: In landmark vote, Chevron shareholders demand report on its climate lobbying

A tanker prepares to load up at Chevron's massive refinery in Richmond, Calif.
(Paul Sakuma / Associated Press)

Here’s a shareholder resolution Chevron will find hard to ignore.

At the big oil company’s annual meeting, held May 28 in a virtual format, a majority of shares were voted in favor of a proposal that the company issue an annual report disclosing its lobbying expenditures on climate change and explaining how they align with the goals of the 2015 Paris climate agreement.

The Paris agreement set goals of holding the increase in the global average temperature to less than 2 degrees Celsius above preindustrial levels and pursuing policies to limit the increase to 1.5 degrees.

Insufficient information is presently available to help investors understand whether Chevron works to ensure that its lobbying activities ... align with the Paris Agreement’s goals.

— Chevron shareholder resolution


The resolution, which Chevron management opposed, passed with 53% of shares in favor, according to preliminary results. That’s an impressively high vote on a shareholder resolution opposed by corporate management. The resolution was the only one of the six shareholder proposals on the annual meeting proxy on which shareholders defied management’s recommendation.

Although the resolution is nonbinding, activist shareholders view it as a significant wake-up call for a company that they see as having paid lip service to the threat of climate change while continuing to fund organizations fighting environmentally friendly initiatives.

“It’s really ill-advised for a company not to do anything to address a majority vote,” says Kathryn Mulvey of the Union of Concerned Scientists.

In the broadest sense, the Chevron vote may not have been all that surprising. Big institutional investors have been joining small investors in pressing for more disclosure by companies about their actions related to climate change.

But the vote looks like a landmark in the so-called ESG movement -- for “environmental, social and governance” investing.

“There is no area of investing that is growing faster than ESG,” says corporate governance consultant Nell Minow. Not only are ESG-oriented investment funds growing, but the concept has been embraced by such major investment figures as Larry Fink, CEO of BlackRock, the world’s largest money management firm.


The Chevron resolution was submitted by BNP Paribas Asset Management, and supported by major institutional investors with sizable stakes in Chevron. Among them was BlackRock, whose 127.2 million shares made it the oil company’s second largest shareholder, after Vanguard, with a 6.7% stake.

A few weeks ago, we described how the giant oil company Chevron was barraging little Richmond, Calif.

Oct. 13, 2014

The firm paints its concern over climate change as a matter of investment prudence: “Climate risk is a significant investment risk, with the potential for financial impacts that reverberate across all industries and markets, affecting long-term shareholder returns as well as economic stability,” BlackRock explained in a January 2020 commentary.

Other institutions have also sent a strong message to fossil fuel companies. CalPERS, California’s giant public employee pension fund, announced on May 6 that it would vote in favor of the climate resolution and urged fellow shareholders to do the same.

“The company has failed to provide shareowners with the needed information to adequately assess their climate-related lobbying objectives,” CalPERS stated.

Last week, the University of California disclosed that its $127-billon endowment portfolio had fully divested its fossil fuel holding, shifting the investments more to environmentally sustainable targets, such as wind and solar energy. UC became the largest educational institution to do so.

“There is no issue more central to the concerns of investors I talk to than this one,” Minow told me. “It’s not just that they’re concerned about climate change; they’re concerned about what’s preventing action on climate change, and that comes down to lobbying and campaign contributions. This is the heart of the matter.”

In September, more than 200 institutional investors representing more than $6.5 trillion in assets, including CalPERS and the California State Teachers Retirement System, called on Chevron and 46 other major U.S. corporations to align their lobbying activities with the Paris goals.

“When evaluating your company’s response to climate-related risks and opportunities,” the investors said in their letters to the company managements, “we will consider the alignment of your lobbying activities with our shared goals for a stable climate.”

The oil and gas industry has never been shy about deploying its billions of dollars in resources to get what it wants from the political system.

July 27, 2016

The Chevron vote is also a reproach to a long campaign by big public corporations to stifle shareholder voices.

Industry lobbyists have been trying to persuade the Securities and Exchange Commission to implement rules aimed at shrinking shareholders’ ability to place proposals on annual meeting agendas. They claim that small shareholders interested in “heavy-handed activism” clutter the agendas with narrow concerns, trampling the interests of mom-and-pop investors.

In fact, the campaign for SEC rules is directed from the corporate suite, which doesn’t want to answer to institutional shareholders. The battle, Minow says, is chiefly waged over institutional demands for more accountability on climate change. The SEC is still pondering the proposed rules.

The fight, moreover, involves more than fossil fuel companies with direct interests in oil and gas production. The financial and economic consequences of global warning are going to be felt across the entire corporate spectrum.

“Everybody is touched by this issue,” Minow says. “So there’s an increasing sense of focus and urgency around this issue, and also a sense of fury about the pushback from corporations.”

Chevron hasn’t divulged how it will respond to the shareholder vote. The resolution calls for a report within the next year and annual updates on its lobbying activities.

“Insufficient information is presently available to help investors understand whether Chevron works to ensure that its lobbying activities, directly, in the company’s name, and indirectly, through trade associations, align with the Paris Agreement’s goals, and whether Chevron takes any action to address any misalignments it has found,” the resolution states.

The company replied to my request for comment with a premasticated, anodyne statement saying: “We value feedback from stockholders” and that its board “will carefully consider the voting results ... and will continue to engage with our investors on these important issues.”

In its opposition message to shareholders, Chevron management called the requested annual lobbying report “duplicative,” as it “already discloses extensive information about its lobbying activities as well as its political contributions.”

Big corporations are known for being two-faced — presenting a nurturing, maternal face to the outside world while ruthlessly pursuing profit on the inside.

Aug. 22, 2017

Critics say San Ramon, Calif.-based Chevron, the nation’s second-largest fossil fuel company, has lagged well behind its competitors in setting carbon-cutting goals for itself in the battle against climate change. Earlier this year, BP committed to becoming carbon-neutral by 2050. Royal Dutch Shell, among other big oil companies, has promised to reduce its carbon footprint significantly.

Chevron Chairman and Chief Executive Michael K. Wirth, however, calls those pledges “aspirational.” In March, Wirth said on Bloomberg TV that the company was disinclined to “set long-term targets that we’re not exactly sure how we will get to. ... Our approach has been, get on the path, start taking actions, set short-term accountability metrics, make progress and start marching in that direction.”

Lobbying and marketing activities of the oil companies have long been a target of their critics. As The Times has reported, Exxon Mobil has been accused of downplaying publicly for decades, through newspaper advertising and other campaigns, what its own scientists were saying internally about climate change — that it posed a material threat to the company’s future.

Oil companies can support policies that undermine the fight against climate change indirectly, through trade groups and other lobbying arms in which their role can sometimes be shrouded.

In February, BP issued its first annual report on its connections with such trade associations, announcing simultaneously that it was leaving three of the 30 organizations to which it belonged “due to misalignment on climate policy” and in conformance with “its support of the Paris Agreement goals.”

The three are Denver-based Western Energy Alliance, Sacramento-based Western States Petroleum Assn. and Washington-based American Fuel and Petrochemical Manufacturers.