Big Oil is getting relief from investors because energy concerns top the climate

US import prices have not changed as oil prices fall

Big Oil has enjoyed in a simpler ride at shareholder meetings so far this year compared and last year’s punishing run of hostile financial backer votes tied to climate worries, as those issues have been eclipsed by close oil supplies. Major oil organizations have handily crushed a few high-profile climate resolutions got by investor activists the current run of yearly general meetings. Last year, organizations confronted an upsurge of investor support for resolutions and votes on environmental and social issues.

“It might be that Big Oil has convinced some investors the energy crisis overrides the climate crisis,” said Dutch environmental activist Mark van Baal of Follow This, an organization that filed a number of the resolutions defeated at recent AGMs, referring to the impact of the conflict in Ukraine.

Investors’ more supportive stance coincides with a surge in energy prices in the wake of Russia’s invasion of Ukraine and follows the efforts of many companies to speed up plans to transition to a low-carbon economy after years of pressure.

ExxonMobil Corp, for example, had three new directors voted on to the Texas-based company’s board, marking a landmark win for activist investor Engine No. 1.

Only 15% of shareholder votes cast at BP’s annual meeting on May 12 backed a call for the British oil company to accelerate its energy transition, compared to the 21% in favor in a similar vote last year.

But that was then.

Also, 17% of investors backed a call for emissions-reduction targets at Occidental Petroleum Corp at its May 6 shareholder meeting, while 16% supported a measure on April 27 asking Marathon Petroleum Corp to report on how its transition plans affected workers and communities.

At ConocoPhillips, 58% of votes cast last year backed a push to set emissions-reduction targets. On May 12 only 42% supported a similar measure that also asked the Houston-based company to set overall emissions reductions in line with the Paris climate goals, according to a securities filing.

Shareholder meetings at Exxon, Chevron and Shell are set for later this month. Analysts said investors’ shift away from environmental priorities partly reflects concerns as the war in Ukraine, which Russia describes as a “special military operation,” tightens energy supplies.

Geopolitics has “provided a powerful plausible excuse to procrastinate instead of committing to vital climate action,” said Abhijay Sood, financial sector research manager for ShareAction, a non-governmental organization that focuses on responsible investment. Caitlin McSherry, director of investment stewardship at asset manager Neuberger Berman, said investors could also be responding to the additional details many companies have issued on their transition plans.

“That gave, maybe, some investors more comfort” to vote with management, McSherry said. Neuberger declined to discuss most of its votes in detail. Occidental had argued that it already set appropriate targets. A representative of the Houston-based company said the outcome of its AGM “reflects the confidence Oxy’s shareholders have in the company’s net-zero strategy as well as the disciplined, rigorous targets we have established.”

BP did not immediately respond to a request for comment. BLACKROCK PULLBACK

A representative of Ohio-based Marathon declined to comment on the vote at its AGM. A ConocoPhillips spokesperson said the vote at its AGM supported its view that the shareholder proposal for emissions was “not the right solution for an E&P (exploration and production) company with a transition-oriented portfolio and production.”

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