Andarko: Paris compliant Transition Plan
WHEREAS: The Intergovernmental Panel on Climate Change released a report finding that "rapid, far-reaching” changes are necessary in the next 10 years to avoid disastrous levels of global warming. Specifically, it instructs that net emissions of carbon dioxide must fall by 45 percent by 2030 and reach "net zero" by 2050 to maintain warming below 1.5 degrees Celsius.
The Fourth National Climate Assessment report, issued November 2018, finds that with continued growth in emissions, “annual losses in some U.S. economic sectors are projected to reach hundreds of billions of dollars by 2100 —more than the current gross domestic product of many U.S. states.” Other studies estimate global losses over $30 trillion.
These climate change impacts present systemic portfolio risks to investors. A warming climate is associated with supply chain dislocations, reduced resource availability, lost production, commodity price volatility, infrastructure damage, crop loss, energy disruptions, political instability, and reduced worker efficiency, among others.
The oil and gas industry is one of the most significant contributors to climate change; Anadarko is the 47th largest contributor.
While the investment choices of oil and gas companies can play a major role in the transition to a clean energy economy, every dollar invested in fossil fuel resource development and infrastructure slows that transition, increasing risk to the global economy and investor portfolios.
A number of peer oil and gas companies have announced policies to reduce their full climate footprint. Shell announced scope 3 greenhouse gas intensity targets. Total has invested in solar energy and is reducing the carbon intensity of its energy products. Equinor is investing in wind energy development. Orsted, a Danish oil and gas company, sold its oil and gas portfolio and rebranded itself.
While Anadarko has assessed and reported on Company-related risk from climate change, and has adopted plans to reduce its own operational emissions (generally less than 20 percent of its climate footprint), Anadarko has not adopted Paris-aligned targets or actions to reduce the full climate impact of its investments in fossil fuel energy sources. Anadarko’s Scope 3 product emissions are increasing as its ratio of gas to oil reserves declines.
BE IT RESOLVED: Shareholders request that Anadarko issue a report (at reasonable cost, omitting proprietary information) describing if, and how, it plans to reduce its total contribution to climate change and align its operations and investments with the Paris Agreement’s goal of maintaining global temperatures well below 2 degrees Celsius.
SUPPORTING STATEMENT: In the report shareholders seek information, among other issues at board and management discretion, on the relative benefits and drawbacks of integrating the following actions:
Adopting overall greenhouse gas emission reduction targets for the company's full carbon footprint, inclusive of operational and product-related emissions
Reducing capital investments in oil and/or gas resource development
Investing in renewable energy resources