As You Sow, the US corporate social responsibility advocacy group, has been knocked back in its bid to get US oil giant Chevron to report to shareholders on how it plans to address the potential problem of “stranded assets.”
The Securities and Exchange Commission (SEC) has said it won’t take action if Chevron excludes a proposal from As You Sow on the issue from its annual general meeting agenda.
As part of a broader investor campaign targeting fossil fuel firms, As You Sow had submitted a motion that would have had the firm “address concerns regarding fossil fuels and their contribution to climate change, including an analysis of financial and operational risks to the company.” According to As You Sow, the chief risk is the possibility of stranded assets emerging from future regulation.
Last month, Chevron’s peer firm Exxon Mobil responded to As You Sow and new sustainable boutique Arjuna Capital by agreeing to publish a Carbon Asset Risk report on its website – although the report, released last week, underwhelmed some investors.In Chevron’s case, the company asked the SEC to allow it to omit the proposal on the grounds that it closely resembled three previous proposals that Chevron shareholders had already voted overwhelmingly (more than 90%) against in previous years. Shareholder proposals, under SEC rules, need to gain at least 10% support to be re-submitted.
Writing to the SEC, Chevron rejected As You Sow’s claim that unlike the previous motions, the one for the 2014 AGM was chiefly concerned with stranded assets. It said: “The fact that the proposal may involve different areas of climate change risk does not change the fact that it deals with substantially the same subject matter as the previous proposals – i.e. reporting to stockholders on the perceived risks associated with climate change and the measures the company intends to take to address such risks.”
The SEC agreed, replying to the company that it would not prevent it from excluding As You Sow’s proposal from its AGM, likely to take place at the end of May.