After shareholders of two U.S. oil and gas drillers ignored recommendations to vote down resolutions on environmental and governance issues, Chesapeake Energy Corp. negotiated a last-minute withdrawal of measures requiring reports on climate change risk and lobbying efforts before a May 18 vote at the company's annual meeting.
Shareholders withdrew their resolutions after Chesapeake agreed to provide more detail on both issues, company spokesman Gordon Pennoyer said. Representatives of the New York state comptroller, who sponsored the climate change measure, and the Unitarian Universalist Association, sponsor of the lobbying disclosure measure, praised Chesapeake for its "frank dialogue" on the issues.
Chesapeake's board recommended "no" votes on two proposals requiring a more detailed report on the shale oil and gas producer's lobbying efforts and an assessment of the impact on Chesapeake's assets in a world where global warming is limited to 2 degrees C. The board said the company already discloses its spending on lobbying and the impact of climate change in annual reports.
Reflecting a less-than-passive stance on environmental, social and governance issues signaled earlier in 2018 by giant index fund managers such as BlackRock Inc. and State Street Corp., two other independent U.S. oil and gas drillers watched shareholders approve measures focused on climate change and the environment, overriding board recommendations, in the week leading up to Chesapeake's annual meeting.
Shareholders at Appalachian shale gas producer Range Resources Corp. on May 16 narrowly approved a measure sponsored by the Unitarian Universalist Association requiring more detailed reporting of Range's management of methane emissions. Range's board recommended a "no" vote, only to watch a slim majority of shareholders — 50.25% of the votes cast — approve the advisory measure.
"Range is committed to ensuring compliance and limiting emissions across its operations, and is proud to have been a pioneer in implementing a variety of best-in-class practices to manage emissions," Range said May 17, noting that As You Sow, a nonprofit that encourages environmental shareholder action, ranked Range third-highest among operators surveyed for its methane management programs.
"Range appreciates the perspective brought forward by the proposal creators, and looks forward to working together with them to further articulate the company's approach to emissions management," the company said in a statement.
As You Sow sponsored a successful shareholder resolution at Anadarko Petroleum Corp.'s May 15 annual meeting. The measure, requiring a report on how Anadarko plans to navigate the risks of a 2-degree-warming world, earned 53% of the votes cast.
"This majority vote is a victory not only for shareholders but for Anadarko itself," As You Sow President Danielle Fugere said after the vote. "The speed of technological advancements in low-carbon energy, as well as global governments' increasing focus on reducing greenhouse gas emissions, require that Anadarko ready itself for a rapidly changing energy market. The company's investors have stated plainly that they cannot weather this kind of risk without transparency."
A proposal for Range to disclose its political spending by the Nathan Cummings Foundation of New York lost, garnering 36% of the total votes cast.
Sixty investment funds representing $10.4 trillion in assets wrote an open letter to Royal Dutch Shell PLC's investors May 17, urging the supermajor to take more responsibility for its greenhouse gas emissions. The letter comes ahead of a vote at Shell's May 22 annual meeting that would commit it to reducing its carbon emissions below what is required to meet a 2-degree temperature cap, a step further than the climate change resolutions approved recently by investors at U.S. independent drillers.
"Regulation to keep global warming below 2C and in line with the Paris agreement will create additional costs for carbon-intensive industries and risk stranding assets," investment funds led by Aberdeen Standard Investments and Axa Investment Managers told Shell in the letter. "Reducing the carbon impact of their [oil and gas companies'] products is the most effective strategy for these companies to move to a low-carbon world."