University Led Positive Investment Campaign Takes on Exxon and Chevron at Upcoming Shareholder Meetings

03/05/2016 11:47

Positive Investment, a global campaign of students and academics that started at Cambridge University, is coordinating an international effort across major academic institutions to influence the outcome of voting on eight climate change related resolutions at the Exxon Mobile and Chevron Annual General Meetings on May 26th.

While the global divestment movement continues to grow, most investors still hold fossil fuel stocks. Positive Investment asserts that such investors and shareholders have a responsibility to pressure leading dirty energy firms to prevent catastrophic climate change.

The eight resolutions championed by Positive Investment collectively attempt to work climate change into the core strategic thinking of both Exxon Mobil and Chevron. They include polices such as adding a board member with environmental expertise; changing the way these companies report their future energy reserves to put an emphasis on renewables; disclosing direct and indirect lobbying activities; and writing company policies that align with the 2˚ C warming limit agreed upon by the international community (and recently adjusted to a maximum of 1.5˚ C). A 2 degree limit requires that a maximum of 1/3 of remaining fossil fuel reserves can be burnt to maintain what scientists consider to be a habitable world.

Leading thinkers, such as Lord Martin Rees (Cambridge), Robert G. Eccles (Harvard Business School) and James Engell (Harvard) have signed onto the campaign. With fellow faculty members, they are calling on the Chief Investment Officers of their university endowments to vote on these resolutions.

In addition, Positive Investment is promoting an open letter to collect at least 1,000 signatories from the academic and financial worlds to be directed at Exxon Mobile and Chevron's other major shareholders, as well as the top voting advisory companies, which advise on 30% of the votes cast. Farhan Samanani, who has been involved in coordinating the campaign, says: "Together, these investors have the power to pass all eight resolutions, potentially changing the behaviour and future plans of two of the world's largest oil and gas companies."

The Positive Investment team will continue to gather support from faculty members and their Institutions Chief Investment Officers until mid-May. Interested academics can add their name to an open letter of support. The Positive Investment Campaign is also providing information to students on how they can help campaign for their university to take part.

"We are focusing our efforts on universities because we believe universities occupy a unique position. They are value-driven and knowledge-driven institutions, who tend to want to be around for the long term. That means that they're in a privileged position to take the lead in making smart, pointed investment decisions that bring together financial savvy with due regard for the environmental and social threats that climate change poses. And, of course, our universities have tremendous influence on policy and practice worldwide, so if they lead it's very likely others will follow," says Farhan Samanani.

As the global community continues to take steps to avert catastrophic climate change, many fossil fuel reserves are likely to become stranded assets - investments that can never be capitalized upon, though at present, both Exxon and Chevron have continued to invest in the exploration and development of new petrochemical projects. Positive Investment argues that in addition to being morally negligent, these practices are creating increased financial risk for shareholders.

While Exxon and Chevron have both stated that policies to cap carbon emissions to ensure a maximum of 2˚ C of warming would be 'highly unlikely,' neither company has evaluated their long-term business model in the context of climate change policies aimed at achieving a 2˚ C scenario, a significant risk to shareholder value. The proposed resolutions would require these companies to evaluate the resilience of the company's full portfolio of reserves and resources through 2040 and beyond and address the associated financial risks.