Daily ESG Briefing: Shareholders to vote on stranded assets resolution at Exxon after SEC ruling

The latest developments in sustainable finance

The US Securities and Exchange Commission has upheld a shareholder proposal at Exxon asking it to produce an audited report on the risks it faces from waning fossil fuel demand. The oil major tried to exclude the proposal, filed by Christian Brothers Investment Services, from its AGM this Spring by writing a ‘no action’ letter to the US regulator, arguing that the resolution is based on false information, and that it had already substantially implemented the proposal. 

Chevron has exceeded its 2023 carbon intensity reduction targets three years ahead of schedule, and plans to phase out routine flaring – the burning off of excess gas – by 2030. At its AGM, the firm announced stronger 2028 carbon intensity targets and updated plans to increase offsetting and invest in hydrogen and carbon capture technology. In recent weeks, Chevron has announced a Future Energy Fund with a $300m commitment, and a new bioenergy partnership with Schlumberger and Microsoft.

Asset managers face ‘significant’ compliance costs to adapt to the new EU Sustainable Finance Disclosure regulation, according to a new report from Bloomberg Intelligence. The need to increase investment in ESG data and expertise will disproportionately affect smaller firms and those that have not already adapted, the report says. UK firms affected by Brexit divergence and other mandated disclosures may also struggle to adapt.

Around 80% of board directors at the UK’s five largest banks are allegedly linked to polluting industries, according to analysis by environmental investigations outlet DeSmog. The research claims that 50 of the 64 directors of Barclays, HSBC, NatWest, Lloyds and Standard Chartered have a “present or past connection to a company participating in a high-carbon or polluting sector”, including 15 who are connected to the fossil fuels industry.

The pension fund for employees of Italy’s Credito Valtellinese Banking Group is looking for a manager for the defined benefit section of its scheme. It will prioritise candidates that include ESG criteria in the investment process.

US energy company Valero has pledged to link executive pay to climate performance following engagement with campaign group As You Sow. Under the new plans, shares issued to executives as part of Valero’s performance scheme will be subject to an increase or decrease of up to 25% based on the firm’s performance against GHG reduction and green spending targets. As You Sow will withdraw a shareholder proposal on this basis. It has also withdrawn proposals at confectionery firm Mondelez and drinks giant PepsiCo after they committed to reduce their reliance on ‘virgin’ plastic in favour of recycled plastic.