Environmentalists scored a major victory at Chevron's May 27 annual meeting as 53 percent of shareholders voted in support of a resolution requiring the energy giant to issue a report on its climate change-related lobbying effort.
Specifically, the resolution's goal is to gauge whether Chevron's lobbying aligns with the Paris Climate Change Agreement's goal of limiting global warming to well below two degrees Celsius.
"Corporate lobbying activities that are inconsistent with meeting the goals of the Paris Agreement present regulatory, reputational and legal risks to investors," according to the resolution's supporting statement.
"These efforts also present systemic risks to our economies, as delays in implementation of the Paris Agreement increase the physical risks of climate change, pose a systemic risk to economic stability and introduce uncertainty and volatility into our portfolios."
The resolution sponsors believe Paris-aligned climate lobbying helps to mitigate these risks, and contributes positively to the long-term value of their investment portfolios.
They also want Chevron to spell out its participation in trade associations and other politically active organizations "that speak for business but, unfortunately, too often present forceful obstacles to progress in addressing the climate crisis."
Chevron's board had urged shareholders to reject the proposal, saying the company's lobbying activity is already transparent through existing disclosures.
The board shares the concerns of governments and the public about climate change risks. "Chevron recognizes that the use of fossil fuels to meet the world's ever-growing energy needs is a contributor to the rising levels of greenhouse gases in the earth's atmosphere," according to the board's statement opposing the proposal. "Chevron believes that taking prudent, practical and cost-effective actions to address climate change risks is the right thing to do?"
The directors also noted that Chevron takes its fiduciary duties to stockholders very seriously, and believes it would not be doing so if it based "decisions on what a particular constituency believes the appropriate exercise of these fundamental rights to be."