Climate-Aware Shareholders Could Remove Chevron Leadership

Climate-Aware Shareholders Could Remove Chevron Leadership

A shareholder advocacy group is encouraging investors at Chevron to vote out CEO Michael Wirth and Lead Director Ronald Sugar at the oil giant’s shareholder meeting in May. The reason? Chevron’s failure to cut its climate-damaging emissions and lack of ambitious carbon-reducing targets. The company plans to reduce company-wide emissions per unit of energy by 5% by 2028 but has no long-term plans for reducing emissions from the oil and gas it drills. The nonprofit Majority Action, leading the call to remove Wirth and Sugar, also called for their removal in a filing with the SEC earlier this month.

Oversight Committee: Chairwoman Maloney's Opening Statement | Examining Big Oil's Climate Pledges, February 8, 2022.

Oversight Committee: Rep. Khanna's Opening Statement | Examining Big Oil's Climate Pledges, February 8, 2022.

Why This Matters

As an oil giant, Chevron is one of the world’s biggest companies driving climate change. Even among its Bil Oil peers, its climate action and plans are lagging. From 2010 to 2018, Chevron spent less than 1% of its capital budget on lower-carbon energy. Given that the world needs to stop producing oil and gas ASAP to avoid the worst impacts of the climate crisis, Chevron’s foot-dragging is perpetuating damages.

According to Eli Kasargod-Staub, Majority Action’s executive director, if investors aren’t won over by the argument of keeping the planet habitable, they should think about the financial risks associated with climate change to retirement funds, pensions, and college savings accounts. "A world of runaway climate change is not in shareholders’ long-term interest,” he told Grist.

Between 1965-2017, the top 20 companies have contributed 480,169 MtCO₂e in total carbon emissions, or 35% of cumulative global emissions. This whopping amount is mostly from the combustion of their products -- each company on this chart deals in fossil fuels. (Source: Visual Capitalist, October 25, 2019.)

ENDEVR: Inside Chevron | Behind the Doors of the Oil Giant, September 30, 2020.

Investors Have Driven Change Before

Last year, a group of investors successfully booted three Exxon board members and replaced them with climate-conscious nominees from Engine No. 1, an American activist and impact-focused investment firm. At the time, the company was not in peak financial shape, so board members were willing to shake things up with their votes.

However, that’s not the state of affairs for Chevron right now. The company just hit its highest earnings in almost a decade, which "means the vote will be a narrower test of how committed BlackRock and its peers are to holding managers accountable if they don’t carry out winning climate-related resolutions,” Quartz writes.

TED: How to get Big Oil to end the climate crisis | Mark van Baal, January 5, 2022.

Follow This: Follow This testifies in US Congress Hearing about Big Oil’s Climate Pledges, February 15, 2022.

IEA: A 10-Point Plan to Cut Oil Use, March 18, 2022.