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Progress despite opposition
DESPITE the George W. Bush administration’s continued opposition to the Kyoto Protocol and other schemes for mandatory cuts on emissions of greenhouse gases, climate activists who deal with several major US oil and gas companies say they are making good progress.
Activists with stock in six of the 10 biggest US oil and gas firms — including ChevronTexaco, Unocal Corp., and Marathon Oil — have reached agreements with the companies on steps the latter will take to lessen the growing risks posed by global warming to their share value.
As a result, the activists, who last year sponsored resolutions designed to press the corporations to address the long-term threats to their value posed by global warming, have withdrawn resolutions for this year’s shareholders meetings, which normally take place during the spring months.
“Most of the oil and gas companies are taking climate change much more seriously than they were just a year ago,” according to Mindy Lubber, President of Ceres, an investor coalition that has helped coordinate shareholder resolution filings on global warming.
“There’s a much broader recognition from companies that climate change is a serious issue with serious financial consequences for investors if it isn’t well managed,” she added.
The new agreements between activist shareholders and oil and gas companies have come just as the Kyoto Protocol, which requires industrialized countries that have ratified the accord to reduce their greenhouse gas emissions by an average of about five per cent below 1990 levels by the year 2012, took effect in recent months.
The United States, which is responsible for about 25 per cent of the world’s annual global emissions, and Australia are the only wealthy countries not to ratify the treaty which is supposed to be extended to developing countries after 2012.
The Bush administration, which won a major victory for its quest to expand the oil supplies when the Senate voted narrowly to open Alaska’s Arctic National Wildlife Refuge (ANWR) to drilling, has argued that mandatory cuts in emissions will prove too great a burden on the US economy.
Despite the administration’s position and Senate vote, popular concern about warming and fossil-fuel consumption — particularly given the record high prices of oil that have been sustained over the past year — appears to be rising.
Led by California, which last year approved a plan to drastically cut automobile emissions over the next decade, other states, cities and counties in various parts of the country have been taking measures to sharply reduce emissions and improve energy efficiency.
In December, the bipartisan National Commission on Energy Policy, which included leaders from the automobile and oil industries, former lawmakers, academics, and environmentalists joined the growing clamour, calling on the administration and Congress to enact a mandatory programme to limit greenhouse emissions and tighten fuel-efficiency standards.
According to a survey released by the Opinion Research Corporation, a whopping 89 per cent of the public now believes that the government should mandate a 40-mile (70 kms) per gallon fuel efficiency standard.
The growing interest in curbing emissions has been bolstered by the growing attention to two constituencies that are considered new to environmental causes. Pro-Israel neo-conservatives, who have long campaigned for reducing US reliance on Arab oil in order to reduce Arab influence on US foreign policy, are now focusing more on conservation measures and the adoption of new, energy-saving technologies.
At the same time, some prominent Christian Right leaders have endorsed the “Evangelical Call to Civic Responsibility,” promulgated last fall by the National Association of Evangelicals, that includes a section on environmental degradation called “sacred responsibility to steward the earth”.
A popular bumper sticker that asks “What Would Jesus Drive?” as well as a website by the same name — has drawn particular attention in light of the overwhelming popularity of gas-guzzling four-wheel drive and sports utility vehicles (SUVs).
Add to this the record high oil prices that have been sustained for much of the past year, and the issue of oil consumption and global warming is once again moving towards centrestage.
Over the last several years, shareholder activists, backed by state public pension funds and other big institutional investors, have been pressing companies in key industries — including electrical utilities, oil and gas, and automobile manufacturing — to address the problem of global warming and energy consumption, particularly how it will affect their investment value.
In July 2002, the Washington-based World Resources Institute (WRI) warned that most oil and gas stocks could lose several percentage points of their share value if they failed to address the issue by, for example, moving aggressively into the production of renewable energy, such as wind and solar power.
Against this background, activist shareholders, many of them church-related, have succeeded in gaining increasing support at shareholder meetings for greenhouse-related resolutions.
Last year, an unprecedented 37 per cent of the shareholders voted at the annual meeting of Houston-based Apache corporation in support of such a resolution, while similar resolutions at annual meetings of Anadarko Petroleum, Marathon Oil, and ChevronTexaco received 32 per cent, 27 per cent, and 10 per cent, respectively.
Given the usual amount of shareholder proxies held by management at these meetings, any showing of more than three by insurgent shareholders is ordinarily considered a victory that must be considered seriously by the board of directors.
As a result, five of the companies (Chevron-Texaco, Anadarko, Apache, Unocal and Tesoro) for which shareholders had filed new resolutions this fall have negotiated agreements with insurgents to withdraw their resolutions.
The agreements include such provisions as requiring the disclosure of the company’s total greenhouse gas emissions; the setting of emission goals and reduction targets; increases in investments in low- or no-carbon energy technologies, including renewables and carbon sequestration; the integration of climate risk into core business strategies; and assigning boards of directors direct responsibility to oversee global-warming corporate strategies.
Andrew Logan, an oil specialist at Ceres, said of the four remaining top 10 US companies, two — ConocoPhillips and Devon — were making sufficient progress on their global-warming programmes to make the filing of a shareholder resolution unnecessary this year.
The remaining two, Occidental and the world’s largest company, ExxonMobil, according to Logan, had far more disappointing records. Shareholders have filed two resolutions with ExxonMobil, which is widely considered the company most resistant to taking global warming seriously.
The resolutions call for the board of directors to review and publish how the company will meet greenhouse gas reduction targets in countries that have ratified Kyoto and to provide research data from the company relevant to its sceptical position on the science of climate change.
“The industry as a whole is really moving forward on climate change, with the one exception of ExxonMobil which continues to deny the science and avoid dealing with the issue in a serious way,” said Logan. — Dawn/IPS News Service
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