US-based faith investor Wespath Benefits and Investments has urged Chevron’s shareholders to vote against two directors at the California-based oil giant, saying it believes the company has failed to meaningfully respond to investor concerns around climate-related lobbying.
In a filing at the US Securities and Exchange Commission (SEC) last week, the Illinois-based fund targeted Chevron’s lead director, Wanda Austin, and her colleague, Enrique Hernandez, “for failing to provide proper governance over the company’s management of climate change-related lobbying activities”.
As former and current chairs of Chevron’s Public Policy Committee, Hernandez and Austin “bear responsibility for governance oversight of Chevron’s climate policy and lobbying activities”, Wespath wrote.
Wespath said this includes what it describes as the firm’s failure to provide “a meaningful response to a shareholder resolution approved by a majority of the company’s shareholders concerning climate-related lobbying”.
In 2020, 53 percent of shareholders backed a shareholder proposal at Chevron calling for a report on how the company is addressing risks associated with any lobbying – both direct and indirect through trade bodies – misaligned with the aims of the Paris Climate Agreement.
Three years on from that vote, Wespath said that Chevron has not established sufficient governance “to address risks from misalignment between the company’s lobbying practices and its stated support of the Paris Agreement”.
This is despite repeated attempts by investors to engage with the company but “without meaningful observable progress”, the filing stated.
When approached for comment, a spokesperson for Chevron directed Responsible Investor to the company’s proxy statement in which Austin stated that Chevron takes “seriously our oversight obligations to focus Chevron’s talent and capital on meeting rising expectations for financial results and progress in addressing climate change”.
In December 2020, Chevron did publish a 12-page climate lobbying report. But, according to Wespath’s analysis, the company does not once “explicitly state if and how the company’s lobbying activities align with the Paris Agreement, which was the central element of the resolution’s requests”.
Chevron is currently ranked “D” by InfluenceMap, the lobbying-focused non-profit, and is also misaligned with most of the indicators on climate policy advocacy measured as part of Climate Action 100+ (CA100+) corporate benchmark.
CA100+ is the multi-trillion-dollar investor initiative targeting the world’s largest carbon polluters.
RI recently learned from Wespath that the $30 billion fund now also co-leads engagement with Chevron as part of the initiative, joining US Californian public pension giant CalPERS and EOS, the stewardship arm of Federated Hermes.
Last year, CalPERS pre-disclosed that it would vote against four directors at Chevron, in response to what it described as the company’s failure “to adequately respond to the Climate Action 100+ engagement initiative”.
One of those targeted was also Hernandez, who secured 93 percent support in 2022. The other three, which included Jon Huntsman, former Republican governor of Utah, saw support within the 97 percentiles.
Wespath also stated in its SEC filing that it is “inclined” to repeat its voting position at Chevron at other CA100+ focus companies where there is “insufficient progress addressing climate lobbying alignment”.
Chevron’s annual general meeting takes place on 31 May. The vote has been flagged by CA100+.
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