Friday, 1 June, marked Total’s Annual Shareholders’ Meeting; a meeting severely disrupted by Greenpeace in response to drilling in French Guiana. The shareholders' meeting was interrupted for quite some time, to allow police to remove activists who went so far as to suspend themselves from the ceiling of the Palais des Congrès in Paris. This media action by the NGO is a symbolic end to General Meeting season for oil & gas companies, particularly considering the planet.
In 2017, a resolution was passed to align ExxonMobil's strategy to the 2°C Paris Agreement objectives; an unprecedented vote that jostled the company and the oil & gas sector. Management failed to supress shareholder rebellion from investors concerned with the long-term value of the company's assets. A year later, oil & gas companies that took the lead in terms of climate and environment learned their lesson, convincing their shareholders not to vote on any new resolutions of this kind.
Demand and climate: a dual challenge
This is still a victory for the planet's defenders and for responsible investors since the climate has never seen so much limelight. One of the first sentences delivered by Daren Woods, CEO of ExxonMobil, at its Annual General Meeting was: "We are committed to being part of the solution in addressing the risk of climate change and other pressing societal challenges. Our plans for the future reflect these commitments”.
At the Shell Annual Shareholders Meeting, a majority of questions were about climate change (and quite a few concerned working conditions). A climate resolution proposed by Follow This, and backed by big investors, only received 5% of votes. At BP, where no climate resolution was submitted, CEO Bob Dudley also spoke on climate: "Today BP's whole - not just our alternative energy business - is focused on the dual challenge of meeting the growing demand for energy while reducing CO² emissions".
Beyond the speeches, oil & gas companies pledged their goodwill to shareholders. Exxon announced a 15% reduction in methane emissions and a 25% reduction in CO² emissions from flaring gas. Shell promised to cut its carbon footprint by 2050: "This ambition is really at the forefront in the industry, no one else gets close to it”, said Ben Van Beurden, the group's CEO, in response to a resolution by Follow This, which called on them to "translate [these steps] into short and medium-term goals, aligned with the Paris Agreement, during the vital 2020-2030 period."
Commitments yet to be aligned with the Paris Agreement
Chevron had to face two resolutions, one asking for a better measure and reduction of its methane emissions, and the other aiming to move the company toward renewable energies. Both were rejected, but in exchange, the company has, in advance of its General Meeting, joined a coalition of US actors, including BP, Shell and Exxon, which are committed to improving the CO² balance of natural gas production in the United States.
Thus, big oil bought itself a year’s reprieve. Yet several analysts point out that, even if the climate issue is now directly driven by the direction of oil & gas companies, their commitments are either insufficiently aligned with the Paris Agreement or their methodology lacks transparency and consistency.
Ludovic Dupin, @LudovicDupin