Big Oil Investors Calling For More Aggressive Climate Targets

Investors with combined assets of $1.4 trillion have demanded the world’s biggest oil companies take swifter action to cut greenhouse gas emissions.

This year has seen record profits for Big Oil as countries emerged from Covid lockdowns, boosting energy consumption and prices as supplies tightened. The companies bolstered shareholder payouts in response. Many investors have in fact retreated from stronger climate advocacy amid energy security concerns.

Shareholder activist group Follow This filed resolutions with Shell, BP, Exxon Mobil, and Chevron, urging them to align their 2030 emissions targets with the Paris Agreement. It was joined by investors including Edmond de Rothschild Asset Management, Degroof Petercam Asset Management and Achmea Asset Management. While they each manage billions of dollars, they hold less than 0.1% in the four oil firms, data compiled by Bloomberg show.

The resolutions are centered on limiting the majors’ Scope 3 emissions, which include the carbon dioxide released when customers burn their products. Focusing on these, the sector’s biggest contributor to global warming, would ensure the companies have “no wiggle room for smokescreens” as they pursue net-zero ambitions, Follow This founder Mark van Baal said in a statement.

“Despite net-zero-by-2050 targets, none of these four oil majors are even close to Paris-aligned emissions reductions plans for 2030,” he said, calling for stricter short-term goals.

In response, Shell highlighted its existing target to cut the net carbon intensity of its energy products, including Scope 3, by 20% by 2030 and to halve absolute emissions of Scope 1 and Scope 2 by that year.

“Follow This has consistently proposed shareholder resolutions that are simplistic, unrealistic and against the best interests of Shell,” the UK company said in a statement. Shell’s targets are aligned with the Paris goal to limit the increase in global temperatures to 1.5C above pre-industrial levels, it said.

A spokesperson for BP declined to comment.

Chevron, Exxon

As regards Chevron, Follow This wants the US company to expand its carbon-intensity target, saying it’s insufficient to keep temperature gains below 2C. The group is also calling on Exxon, the only one of the four firms without any form of Scope 3 target, to set goals that align it with the Paris accord.

“Chevron values input from its investors towards the goal of enhancing shareholder value,” the San Ramon, California-based company said. “Any shareholder proposal Chevron receives will be evaluated through its well-established governance process.”

Exxon declined to comment.