SEC Should Examine Oil CEOs With Pay Tied to ESG

Fossil fuel companies should face probes on whether they’re using “loophole-ridden” environmental, social and governance goals to boost executive pay while contributing to environmental destruction, Senator Elizabeth Warren said, adding to her calls to rein in CEO compensation. 

Marathon Petroleum Corp., Chevron Corp. and Occidental Petroleum Corp. and others appear to be using “easily-manipulated metrics” to guarantee higher payouts for executives, Warren said, citing reporting by the Washington Post. 

“These corporations are just a small sample of the companies using ESG metrics to reward their top executives without meeting the commitments that they appear to be making to investors and the public,” Warren, a Massachusetts Democrat, said in a letter dated Tuesday to Securities and Exchange Commission Chair Gary Gensler. She asked the regulator to respond by Jan. 7. 

Chevron said in an emailed response to questions that it strives to be transparent with ESG issues and reporting, and is “working with peers, stakeholders, and regulators to achieve greater consistency and comparability of reporting.”

Marathon and Occidental didn’t immediately reply to requests for comment. Earlier this year, Warren and Democratic Representative Sean Casten of Illinois proposed requiring public companies to disclose their greenhouse gas emissions and other climate metrics. 

--With assistance from David Wethe.