{"id":17940,"date":"2018-06-01T15:55:03","date_gmt":"2018-06-01T19:55:03","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=17940"},"modified":"2018-06-01T15:56:04","modified_gmt":"2018-06-01T19:56:04","slug":"chevron-shareholders-made-methane-a-key-priority-at-annual-general-meeting","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2018\/06\/01\/chevron-shareholders-made-methane-a-key-priority-at-annual-general-meeting\/","title":{"rendered":"Chevron shareholders made methane a key priority at annual general meeting"},"content":{"rendered":"

\"\"<\/a>Yesterday morning at Chevron\u2019s annual general meeting, a shareholder resolution calling on the company to improve its methane management and disclosure received a 45% vote.\u00a0This strong vote<\/a>\u00a0follows a majority vote at Range Resources, where 50.3% of voting shareholders supported a similar methane disclosure resolution (up from just 20% in 2013). Oil and gas industry shareholders are sending a powerful message\u2013 methane is a material risk that\u00a0companies must manage to compete<\/a>\u00a0in a capital- and climate-constrained world.<\/p>\n

Such resolutions are effective at driving change, even for non-majority votes like the 38% of shareholders at Kinder Morgan who supported a methane resolution. For example, last year ExxonMobil\u2019s methane resolution received a 39% vote, and the company responded with a new\u00a0methane emissions production program<\/a>, which now includes a\u00a0quantitative methane reduction target<\/a>.<\/p>\n

Investors will be waiting to see if these companies follow ExxonMobil\u2019s example, as well as deliver results once these programs are implemented. With investors tilting their portfolios towards companies who proactively manage climate risk, they will be closely watching how these companies respond to the clear market demand for improved methane management and disclosure.<\/p>\n

<\/p>\n

Withdrawals can be a win<\/strong><\/p>\n

High percentage votes are not the only way to measure the success of a shareholder resolution. A resolution can drive company progress without going to a vote, if filers and companies are able to work together on an agreement.<\/p>\n

For seven of the ten methane resolutions this year, filers withdrew their requests after negotiating commitments from the companies in question. Anadarko, Devon Energy, Dominion, DTE Energy, Energen, Exelon and EQT all reached agreements to improve their methane disclosure before the resolutions came to a vote.<\/p>\n

For example, EQT\u2019s resolution was withdrawn after the company\u00a0updated its website<\/a>\u00a0to include greater details on methane emissions and its leak detection and report program. The company has also joined the\u00a0ONE Future<\/a>\u00a0initiative, and correspondingly adopted a methane target. If EQT was ranked and scored in the\u00a0Disclosing the Facts<\/a>\u00a0report today, it would now have seven points, up from one point in the 2017 report.<\/p>\n

A methane resolution filed with Dominion was similarly withdrawn. Dominion has committed to report key methane metrics to its investors annually, including updating its\u00a02017 Methane Management Report<\/a>\u00a0to include a methane leakage rate for each of its business segments.<\/p>\n

These withdrawals may signal company management recognition of investor seriousness on the issue. Companies are willing to negotiate on these methane resolutions, with the understanding that a constructive dialogue with investors on a material risk can lead to beneficial outcomes but all stakeholders.<\/p>\n

International interest<\/strong><\/p>\n

Shareholder engagement and resolutions is spreading beyond North America. Investors in Europe are also demonstrating clear concern about methane. Bloomberg reporter Kelly Gilblom observed, \u201cA bit of a surprise to me — there have been as many questions about methane emissions as carbon emissions at\u00a0@BP_plc<\/a>\u00a0‘s AGM in Manchester.\u201d<\/p>\n

Australian investors filed a methane resolution with Santos this year, earning an almost 10% vote \u2013 a remarkably high number for an Australian resolution. As context, the highest ESG-related vote in Australia corporate history only received about 18% support.<\/p>\n

Targets wanted<\/strong><\/p>\n

A trend from this year\u2019s resolutions is the importance investors have placed on target-setting. Nine out of the ten methane shareholder resolutions this year called on companies to set methane specific reduction targets within the context of broader disclosure requests.<\/p>\n

Setting targets is the next front for methane disclosure \u2013 companies like BP, Eni and ExxonMobil have already announced their own methane emissions targets \u2013 and investors increasingly expect others to follow. EDF report\u00a0Taking Aim<\/a>\u00a0can be a tool for Range, Chevron and industry investors to develop and evaluate methane targets going forward.<\/p>\n

What to watch<\/strong><\/p>\n

In the short term, investors will be on the lookout for companies to take concrete steps to reduce emissions and improve reporting now that the resolution results are in.<\/p>\n

Companies should note investors have an increasingly high bar of expectations regarding climate risk management, and can quickly disapprove of companies responses perceived as lackluster. For instance, ExxonMobil\u2019s report on climate change risks last year was\u00a0criticized<\/a>\u00a0for its assumptions and vagueness. So looking forward, companies should remember that when an industry\u2019s largest shareholders ask for information, it is in the company\u2019s best interest to listen and provide detailed answers that demonstrate results.<\/p>\n

In the long term, this year\u2019s resolution season is an indicator that investors are clearly demanding better methane management. Companies lagging their peers should expect similar resolutions going forward.<\/p>\n

[Tweet “Chevron shareholders made methane a key priority at annual general meeting”]<\/p>\n

This post originally appeared on Forbes<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Yesterday morning at Chevron\u2019s annual general meeting, a shareholder resolution calling on the company to improve its methane management and disclosure received a 45% vote.\u00a0This strong vote\u00a0follows a majority vote at Range Resources, where 50.3% of voting shareholders supported a similar methane disclosure resolution (up from just 20% in 2013). Oil and gas industry shareholders …<\/p>\n","protected":false},"author":124740,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[55717,693],"tags":[],"coauthors":[],"class_list":["post-17940","post","type-post","status-publish","format-standard","hentry","category-methane-2","category-natural-gas"],"acf":[],"yoast_head":"\nChevron shareholders made methane a key priority at annual general meeting - Energy Exchange<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.edf.org\/energyexchange\/2018\/06\/01\/chevron-shareholders-made-methane-a-key-priority-at-annual-general-meeting\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chevron shareholders made methane a key priority at annual general meeting - Energy Exchange\" \/>\n<meta property=\"og:description\" content=\"Yesterday morning at Chevron\u2019s annual general meeting, a shareholder resolution calling on the company to improve its methane management and disclosure received a 45% vote.\u00a0This strong vote\u00a0follows a majority vote at Range Resources, where 50.3% of voting shareholders supported a similar methane disclosure resolution (up from just 20% in 2013). 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