Chevron - Paris Compliant Business 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 emission, "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 dollars.(1)

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 fossil fuel industry is one of the most significant contributors to climate change, and Chevron is the 12th largest global oil & gas contributor.(2) Chevron's investment choices matter. Every dollar Chevron invests in fossil fuel resource increases risk to the global economy and investor portfolios.

A number of peer oil and gas companies have announced policies to reduce their climate footprint in support of Paris goals. Shell announced scope 3 greenhouse gas intensity reduction goals.(3) Total has invested substantially in solar energy and is reducing the carbon intensity of its energy products.(4) Equinor rebranded itself from 'StatOil' and is diversifying into wind and solar energy development.(5) Orsted, previously a Danish oil and gas company, sold its oil and gas portfolio.(6)

In contrast, Chevron is planning reductions only to its own operational emissions (less than 20 percent of its climate footprint), has reported on its own climate risk, and is making limited investments in low carbon technology development. Chevron has not adopted Paris-aligned policies or actions to reduce its full climate footprint.(7) Chevron's climate risk report maintains that use of oil & gas will continue to rise and the company will develop resource to fulfill this projected demand.

  1. https://www.theguardian.com/environment/2018/may/23/hitting-toughest-climate-target-will-save-world-30tn- in-damages-analysis-shows

  2. https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change

  3. https://www.shell.com/sustainability/sustainability-reporting-and-performance-data/performance- data/greenhouse-gas-emissions/_jcr_content/par/tabbedcontent/tab/textimage.stream/1534322148157/faafbe2d44f8f9ade10d1202b3 1b8552a67d1430dc3ae7ddc192fc83e9f835c8/2018-cdp-climate-change-submission-180815.pdf, C4.1b

  4. https://www.total.com/sites/default/files/atoms/files/total_climat_2018_en.pdf, p. 35, p. 6

  5. https://www.equinor.com/en/how-and-why/climate-change.html

  6. https://www.ft.com/content/57482c0b-db29-3147-9b7e-c522aea02271

  7. http://www.lse.ac.uk/GranthamInstitute/tpi/new-research-shows-only-two-large-oil-gas-companies-have-long- term-low-carbon-ambitions/

Resolved:

Shareholders request that Chevron issue a report (at reasonable cost, omitting proprietary information) on how it can reduce its carbon footprint in alignment with greenhouse gas reductions necessary to achieve the Paris Agreement's goal of maintaining global warming 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 transitioning its operations and investments through the following actions:

  • Investing in low carbon energy sources

  • Reducing capital investments in oil and/ or gas resource development that is inconsistent with a below 2 degree pathway

  • Otherwise diversifying its operations to reduce the company's carbon footprint (from exploration, extraction, operations, and product sales).