SEC Says Chevron Must Address Climate Risk Shareholder Proposal Filed By As You Sow, Arjuna Capital

Recently, the Securities and Exchange Commission (SEC) released a crucial decision holding that Chevron Corp. must respond to shareholders’ climate risk related shareholder proposals and cannot exclude them from the ballot at the company’s annual meeting. The first proposal asks Chevron to report how it plans to transition its business model to remain successful in a rapidly decarbonizing energy economy. The low carbon business model resolution was filed by shareholder representatives As You Sow and Arjuna Capital along with co-filers American Baptist Home Mission Society and Zevin Asset Management.

The SEC further upheld a shareholder proposal asking the company to report on its actions to reduce fugitive methane emissions. Methane is 86 times more climate intensive than carbon dioxide over a 20-year period, so reducing emissions from oil and gas operations is crucial to maintaining global warming below 2 degrees Celsius. As You Sow filed the methane proposal along with co-filers Dominican Sisters of Hope, Congregation of St. Joseph, Adrian Dominican Sisters, and Dignity Health.

Chevron argued to the SEC that global warming lawsuits -- filed against the company by cities, states, children, and other groups harmed by global warming -- should preclude any climate change inquiry from shareholders, claiming that such inquiry would strategically harm their legal case.

“Had Chevron prevailed in its argument, shareholder inquiries about one of the most important issues of the century would be excluded from consideration,” said Danielle Fugere, President of As You Sow. “The SEC rightfully declined to allow Chevron to muzzle shareholders.”

Natasha Lamb, managing partner, Arjuna Capital, said, “The clock is ticking on how Big Oil will respond to climate change and Chevron can’t choose to hide behind a stack of litigation. Investors have the right to know how the company will adapt its business to climate risks.”

The low carbon business model resolution and methane resolution are expected to go to a vote at Chevron’s annual meeting in late May.