SEC grants shareholders right to vote on emissions from US oil majors
Shareholders at US oil giant Conoco Phillips will have the chance to vote on emissions reductions targets after the US Securities and Exchange Commission (SEC) denied the firm a bid to throw out environmental motions.
The oil major had sought to convince the regulator that motions asking the firm to lay out its plans for reducing “scope three” emissions was a form of micromanagement.
But in a letter back to the firm, first reported by the Financial Times, the SEC dismissed the claim, stating: “In our view, the proposal does not seek to micromanage the company to such a degree that exclusion of the proposal would be appropriate”.
The decision marks a change of direction from the watchdog, suggesting that it will be tougher on climate issues than it was when Donald Trump was president.
That could see US oil firms such as Conoco Phillips and Exxon begin to adopt emissions reductions targets as their European peers have in recent years.
Mark van Baal of activist investor group Follow This said that the SEC’s decision was a “breakthrough” in the global fight against climate change.
Before the Open: Get the jump on the markets with our early morning newsletter
“Finally, shareholders can vote about the elephant in the room: product emissions. All our experience in Europe has shown that only shareholders’ votes for concrete emissions targets will lead oil majors to change course”, he said.
Van Baal added that he expected the SEC to allow similar votes at Chevron and Phillips66. Although such votes are non-binding, they do provide strong evidence of investor sentiment for executives.
While European oil majors have begun the long process of shifting away from fossil fuels over the last year and a half, US firms have lagged behind so far.
That in part was due to the environment stance adopted by former President Trump, who pulled the US out of 2015’s Paris climate accords.
But climate change issues are expected to be a big part of Joe Biden’s agenda over the next four years. He has already reversed the Paris decision, as well as block a controversial pipeline project.