38% back independent chair at Chevron as ESG proposals get strong support

Oil major faced investors at annual meeting

A shareholder resolution calling for an independent chairman at Chevron gained 38% of votes at the oil giant’s annual meeting yesterday, amid strong support for a series of investor proposals on environmental, social and governance (ESG) issues.

Dutch pension fund giant PGGM, which also voted against the re-election of Chevron Chief Executive John Watson, said the combined CEO/Chairman role is “obviously compromised”. Also voting against Watson’s re-election were sustainable funds firm Trillium Asset Management and the AFSCME Employees Pension Plan.

Supporting the independent chairman motion, brought by the Unitarian Universalist Association, were major US pension funds, CalPERS, CalSTRS and the Florida State Board of Administration.
Proposals on political lobbying disclosure, country selection guidelines (human rights) and board environmental expertise all gained 23% support.

They had been tabled by the American Federation of State, County & Municipal Employees (AFSCME) and the Needmor Fund, the International Brotherhood of Teamsters and the New York State Common Retirement Fund respectively.

Twenty-seven percent of votes backed the proposal from Green Century Capital and others on hydraulic fracturing, or fracking.

PGGM, which backed all the shareholder proposals, backed the New York fund’s call for environmental expertise saying Chevron is currently involved in a long-standing environmental legal controversy, referring to the Ecuador case, and that the company is exposed to environmental risks.CalPERS, the largest US pension fund, supported the lobbying and fracking proposals though it did not support the proposal on country selection, saying it may pose long-term harm to the company.

It also did not support the motion calling for environmental expertise on the board, saying it is unnecessary. CalSTRS and the Florida SBA also voted against this motion.

“Disclosure of the impact of material ESG factors could assist investors” – CPPIB

The Canadian Pension Plan Investment Board backed the environmental expertise resolution, arguing it was warranted because “the adoption of responsible policies and practices by companies can maximize sustainable long-term shareholder value”.

Backing the fracking and lobbying motions, CPPIB added: “The disclosure of the impact of material ESG factors could assist investors in assessing the extent to which corporate decisions contribute to or detract from long-term investment returns and risks.”

Canada’s Ontario Teachers Pension Plan voted against the shareholder motions on political lobbying, country criteria, fracking risks and environmental expertise.

Elsewhere, a shareholder proposal on fracking at the Exxon Mobil AGM in Dallas gained 29.6% support. And 22% voted to reject the company’s remuneration policy, according to a Bloomberg report.
New York State Comptroller Thomas DiNapoli’s proposal to prohibit discrimination based on sexual orientation and gender identity gained 20.6% backing.