Over the next few weeks, many oil companies will hold their annual shareholder meetings. It should be a time of celebration: crude oil is at a 4-year high and almost every oil company has made a decent profit in the last year.
But dark clouds loom. In recent years, activist shareholders have used the annual meeting to bring attention to the oil industry’s generally abysmal response to climate change.
In one form or another, these resolutions want the oil industry to show that their businesses are ready for the carbon-constrained world we are living in. Last year, for example, shareholders forced ExxonMobil to tell them how climate change and the regulations under the Paris climate agreement are likely to affect its business. (ExxonMobil published a report earlier this year saying climate change poses little risk to its business.)
Before this year’s votes happen, a group of 60 investors with $10 trillion in combined assets, including Fidelity and Legal and General, have written an open letter to the oil industry. “The Carbon Disclosure Project estimates that the oil and gas industry and its products account for 50% of global carbon emissions. For the Paris climate agreement to succeed, the oil and gas industry must be more transparent and take responsibility for all its emissions,” says the letter published in the Financial Times (paywall) on May 18. “Investors are embracing their responsibility for supporting the Paris agreement. It is time for the entire oil and gas industry to do the same.”
Royal Dutch Shell faces the most controversial of those votes. Follow This, the Dutch group behind the resolution, says that the Anglo-Dutch company hasn’t done enough to meet Paris goals and that it isn’t moving away from fossil fuels fast enough. A similar resolution put forth in 2017 was rejected by 94% of Shell’s shareholders (paywall). That, however, hasn’t dissuaded the group from trying again. Shell’s shareholder meeting takes place tomorrow (May 22).