Arjuna Capital, the new US sustainability boutique whose engagement with Exxon Mobil helped to get the oil giant to report on carbon risks, is mustering support for its resolution on methane emissions at Occidental Petroleum.
Arjuna has written to fellow shareholders in Occidental urging them to support a proposal calling for a report to investors reviewing its plans to “measure, disclose, mitigate, and set” quantitative reduction targets for methane emissions and flaring from all its operations.
It comes as influential proxy advisory firm Institutional Shareholder Services has recommended a vote in favour of the motion, due to be voted on at Occidental’s annual meeting in Houston on May 2.
“A vote FOR this resolution is warranted as additional information regarding the company’s methane emissions, and its methane emissions reduction practices and policies, would allow shareholders to better understand the company’s management of this issue and any related risks,” writes Arjuna’s Director of Equity Research & Shareholder Engagement Natasha Lamb.
In the 15-age letter, Lamb notes that similar proposals in 2012/13 were filed on behalf of Trillium Asset Management at Spectra Energy, Oneok, and Range Resources which received over 35%, 38%, and 21% of the vote at the firms’ AGMs last year. This indicated “strong shareholder concern” for the issue.
Lamb also cites a joint investor statement from the Institutional Investors Group on Climate Change, the Investor Network on Climate Risk and the Investors Group on Climate Change in 2012.She also refers to concerns that high profile investor Jeremy Grantham of GMO expressed in his quarterly letter to clients in February.
Occidental is advising a vote against the proposal, saying it already pursues the beneficial use of methane in its operations, and that it participates in the Natural Gas Star program and the Global Methane Initiative under the US Environmental Protection Agency. It adds that it summarizes all this in its annual Social Responsibility Report and in its submissions to the CDP [Carbon Disclosure Project] – though Arjuna argues these disclosures don’t go far enough.
Meanwhile, the AGM will feature a management proposal that would separate its chairman and CEO roles – the result of engagement by the California State Teachers Retirement System (CalSTRS) and activist fund firm Relational dating back to 2010.
Other shareholder proposals on the proxy include one on executive stock retention (filer: John Chevedden), a review of lobbying (Needmor Fund and others) and quantitative risk report for fracking (As You Sow). CalSTRS has disclosed it is voting against the lobbying, fracking and methane proposals.
Arjuna was formed a year ago by two former senior figures at Trillium, Farnum Brown and Adam Seitchik. They teamed up with wealth management group Baldwin Brothers on the venture, named after the hero of the ancient Sanskrit epic the Mahabharata. Lamb, the former Vice President of Shareholder Advocacy and Corporate Engagement at Trillium, joined the firm in September.