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Activist investors target 5 oil majors with new slate of climate resolutions

Dutch activist investor group Follow This has filed new shareholder resolutions at five of the largest integrated oil and gas majors, including Exxon Mobil Corp. and Chevron Corp., asking them to cut emissions and align their business strategies with the goals of the Paris Agreement on climate change.

The investor group also submitted fresh resolutions at Europe's BP PLC, Equinor ASA and Royal Dutch Shell PLC, but this is the first time Follow This has independently filed resolutions at the U.S.-based Exxon and Chevron.

Follow This is asking that Exxon and Chevron set strategies to reduce scope 1, 2 and 3 emissions to levels that are compatible with the Paris Agreement's intent to limit global warming to below 2° Celsius, founder Mark van Baal said in a statement.

Scope 1 emissions come directly from a company's owned or controlled operations, while scope 2 emissions are those that come indirectly from the electricity purchased and used by an entity. Scope 3 emissions are all indirect emissions that occur in a company's value chain.

Although representatives from Exxon did not respond, Chevron spokesman Sean Comey confirmed Dec. 16 that the company received the resolution from Follow This.

"It's too early to comment on stockholder proposals. Our board of directors will review all proposals received and will provide its recommendations in the proxy statement," Comey said in an email. "However, we have established greenhouse gas emission intensity reduction goals for upstream oil and natural gas, methane and flaring."

In October, Chevron announced that by 2023, the company plans to lower emissions from its upstream oil operations by 5% to 10% and cut emissions from its natural gas projects by 2% to 5%, from 2016 levels. The reductions will occur from Chevron's operated and nonoperated upstream assets.

Chevron also established reduction targets for its methane and flaring emissions in February, with those goals tied to executive pay and bonuses starting this year.

Exxon and Chevron will hold their next annual general meetings in the spring of 2020, but a vote on the Follow This resolutions is not guaranteed because companies can request that U.S. regulators throw out certain shareholder resolutions.

In March at Exxon's behest, the SEC blocked a resolution filed by the New York State Common Retirement Fund and the Church Commissioners for England that called on the company to set and publish short-, medium- and long-term emissions reductions targets.

An Exxon spokesman told S&P Global Market Intelligence in June that it already discloses scope 1 and scope 2 emissions.

Meantime, in Europe, Follow This is again asking BP, Shell and Norwegian-controlled Equinor ASA to set stricter medium- and long-term targets for scope 1, 2 and 3 emissions. All three of the majors have set short-term emission reductions goals; Shell's reduction includes scope 3 emissions, while BP's and Equinor's do not.

BP, Shell and Equinor did not respond to inquiries regarding the Follow This resolutions.

Investors have been pushing for large energy companies to reduce emissions and take more serious action on climate change. Unlike in Europe, shareholder resolutions in the U.S. are nonbinding, but companies generally pay attention to those that win majority shareholder support.

At BP's annual general meeting in May, shareholders approved an investor-backed resolution to broaden the way the company reports on its emissions reductions and climate goals.