By Jennifer Story and Sarah Couturier-Tanoh
At its Annual General Meeting on May 12, 2021, shareholders of the Texas-based oil company Phillips 66 voted strongly in favour of a resolution to align its lobbying activity with the Paris Accord. This proposal was co-filed by SHARE, for the second year in a row, on behalf of the Fonds de Solidarite FTQ. Despite the company recommending against the proposal, the vote passed with a considerable show of support.
This winning vote sends a clear signal to the company, and the oil and gas sector at-large, that investors want ambitious action on climate change and expect the board room and the C-Suite to follow suit.
Lobbying on climate change is not just a high priority for SHARE, but also for the climate investors’ coalition, Climate Action 100+ (CA 100+), for which Phillips 66 is one of 167 focus companies.
As part of our work with CA100+, SHARE has been engaging with Phillips 66 since 2019. The company is one of the largest emitters in the US, and lags significantly behind its peers in terms of disclosing whether or not their memberships are aligned with Paris goals. All the while, the company has paid more than $14 million to 18 industry associations including the American Fuel & Petrochemical Manufacturers (APFM), which has taken hostile positions against climate regulations, including the fuel efficiency standards. They have also been found to fund a group actively involved in climate change denial.
Last year, a similar motion received a majority at the AGM of Chevron, and as a result of that proposal, the company’s first lobbying report was released in December. This year, investors have been putting increased pressure on oil and gas companies to change their lobbying practices.
In 2020, SHARE filed its first benchmark of climate lobbying activities in Canada. Even among those companies that have set emissions targets, many are still funding lobbying activity in the U.S., Canada and globally, aimed at undermining regulatory change. Companies have been found to be funding groups in Canada like the Canadian Association of Petroleum Producers (CAPP), and in the U.S., the Koch-brothers-backed American Legislative Exchange Council (ALEC.)
All eyes will be on oil giant ExxonMobil’s upcoming AGM on May 26. ExxonMobil and other big carbon polluters have urged shareholders to vote against proposals that require reporting on the alignment of their lobbying activity. The vote at Phillips 66 provides evidence that management and company boards appear to be out of step with their investors when it comes to climate lobbying.