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Responsible investors applauded US President Joe Biden’s return to the Paris Climate Agreement, but the actions of his Securities and Exchanges Commission (SEC) appointee Gary Gensler will be a true test of the administration’s stance against climate change: will the SEC allow Big Oil to postpone a shareholder vote on climate again?
Shareholders are the last line of accountability to fossil fuel companies, the largest global emitters. There is increasing demand among such shareholders for oil and gas companies to change course; in Europe, a growing number voted in favour of resolutions requesting concrete emission reductions.
If the SEC continues to condone the exclusion of climate resolutions at the world’s biggest emitters, they undermine their own mission to “promote a market environment that is worthy of the public's trust” and render Biden’s climate promises empty.
US oil majors refused the right of shareholders to voice these same concerns, as Trump’s administration permitted the exclusion of most climate resolutions from the ballot last year. Climate resolutions are usually excluded under the guise that they ‘micromanage’ the company. Evidently, a request for company-wide emission targets is not an attempt at micromanagement, but a call for action with higher stakes: the aversion of a climate crisis. The misuse of SEC bylaws has disenfranchised shareholders, and obstructed the necessary path to curb global warming to the 1.5℃ demanded by the Paris Agreement.
Scientific and political consensus is clear: to avert further ecological crisis, an unprecedented reduction in greenhouse gas emissions must occur. If the SEC continues to condone the exclusion of climate resolutions at the world’s biggest emitters, they undermine their own mission to “promote a market environment that is worthy of the public's trust” and render Biden’s climate promises empty.
Where politicians and scientists go unheard, shareholders must be able to take up the baton. In his Executive Order to Tackle the Climate Crisis, Biden stated: “The world must be put on a sustainable climate pathway to protect Americans and the domestic economy from harmful climate impacts”. If climate resolutions continue to be excluded, another AGM season will pass without emission reductions on the ballot, and another year for the climate will be lost.
Betsy Middleton is a research and communications staff member at Follow This and a recent Earth Science & Anthropology graduate from University College Utrecht.
Mark van Baal is founder of Follow This, a group of green shareholders that supports oil and gas companies to set Paris-aligned targets for all emissions and invest accordingly.