Asset management giant Schroders is urging oil and gas giants to set climate targets in line with the Paris Agreement, as part of a push to encourage a faster transition to net zero emissions.
The investor yesterday announced it was pre-declaring its voting intentions for upcoming shareholder resolutions at Chevron, ExxonMobil, and Shell, which aim to accelerate the fossil fuel producers’ transition to clean energy.
At the Chevron meeting, Schroders said it would support ‘Item 5’, a proposal to adopt medium- and long-term greenhouse gas (GHG) reduction targets. And at ExxonMobil, the firm will back ‘Item 6’ – a bid to force the company to reduce company emissions and hydrocarbon sales.
Finally, Schroders said it would back a bid to make Shell set and publish targets that are consistent with the goal of the Paris Climate Agreement, dubbed Resolution 21.
It follows similar support from the asset manager for resolutions at BP, ConocoPhillips, Occidental Petroleum, and Phillips 66.
“For Chevron, ConocoPhillips, ExxonMobil and Phillips 66, our decision to vote for these shareholder resolutions reflects our aspiration for these companies to show more ambition and transparency in their transition to net zero,” said Tim Goodman, head of corporate governance at Schroders. “While most of these companies now have an ambition to achieve net zero greenhouse gas emissions by 2050 or sooner, their ambition is limited to their operational (Scope 1 and 2) emissions only.
“These companies are lagging behind peers in setting net zero targets that take into account the carbon emissions of the oil and gas that they sell.”
While BP, Shell and Occidental Petroleum have declared ambitions to reach net zero greenhouse gas emissions by 2050 or sooner across Scope 1, 2, and 3, Schroders’ active ownership manager, Carol Storey, said the investor’s decision to vote for these shareholder resolutions was “a signal of our desire for these companies to continue to demonstrate their focus on reaching net zero”.
“We also support the climate reports BP and Shell’s management have presented to shareholders, reflecting the progress they have made in strengthening and broadening their climate targets and developing their decarbonisation,” she added.
The early voting declaration follows the publication, last month, of Schroders Engagement Blueprint which set new standards for active ownership and targets on engagement, and built on the company’s recent commitment to support workers’ and digital rights ahead of tech companies’ annual general meetings.