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Corporate Social Responsibility
News
3.18.2005 ET
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U.S. Oil/Gas Companies Take Action to Reduce Climate Change Risks; Agreements Prompt Shareholders to Withdraw Resolutions
(CSRwire) BOSTON, MA - After extensive negotiations with shareholders,
Anadarko Petroleum, Apache, ChevronTexaco and three
other leading U.S. oil and gas companies have taken far-reaching actions
in recent months to disclose their potential financial exposure from
climate change and develop strategies to improve their strategic
positioning as international pressure grows to reduce greenhouse gas
emissions and promote renewable energy sources.
The company actions come in the wake of record-high voting support last
year for shareholder resolutions seeking more climate risk disclosure from
oil and gas companies, which face growing regulatory, competitive and
public pressure to reduce their reliance on fossil fuels and other
greenhouse gas emitting energy sources. Shareholder resolutions with
Apache Corp., Anadarko Petroleum Corp. and Marathon Oil
Corp. all received record voting support last year, with support at
Apache reaching 37 percent.
In addition to acknowledging more publicly that global warming is a
serious issue that requires action, six of the country's largest oil and
gas companies are pursuing or have agreed to pursue a wide range of
actions that investors believe will reduce companies' exposure to climate
risk and better position them competitively in the years ahead. These
agreements encompass a range of items, including:
Disclosing operational greenhouse gas emissions and/or end-product
greenhouse gas emissions
Setting absolute greenhouse gas emission goals and reduction
targets
Increasing investments in low- and no-carbon energy technologies,
including renewables and carbon sequestration
Integrating climate risk into core business strategies, including
factoring carbon costs into capital allocation decision-making.
Assigning boards direct responsibility to oversee climate change
corporate strategies.
As a result of these actions, shareholders, many of them members of the
Interfaith Center on Corporate Responsibility, have agreed in the past two
weeks to withdraw climate change shareholder resolutions filed with
ChevronTexaco Corp., Anadarko Corp., Apache Corp., Unocal Corp and Tesoro
Corp. The Marathon Oil Corp. has also agreed to boost its climate risk
disclosure, which resulted in shareholders deciding not to file a climate
change resolution with the company this year.
"Most of the oil and gas companies are taking climate change much more
seriously than they were just a year ago," said Mindy Lubber, president of
Ceres, an investor coalition that has helped coordinate the shareholder
resolution filings with the oil and gas companies. "These disclosure
commitments are only a beginning, but there's a much broader recognition
from companies that climate change is a serious issue with serious
financial consequences for investors if it isn't well managed."
Two global warming resolutions are still pending with the ExxonMobil Corp.
and are expected to go to a vote at the company's annual meeting this
spring. The resolutions request that: the board of directors review and
publish how the company will meet greenhouse gas reduction targets in
countries that have adopted the Kyoto Protocol; and provide research data
from the company relevant to the company's stated position on the science
of climate change. Climate change resolutions are also pending with XTO
Energy Inc. and Vintage Petroleum.
Specifics on the company commitments and actions are as follows:
Anadarko Petroleum
Trillium Asset Management Corp. agreed to withdraw its resolution this
month based on the following actions from Houston-based Anadarko:
Acknowledging publicly on the company web page that the impact of
greenhouse gas emissions is a growing concern and that reducing those
emissions is a responsible action.
Adoption of a greenhouse gas management plan and ongoing collection
of baseline greenhouse gas emission data beginning in 2004.
Formation of a Climate Change Committee comprised of employees in
various disciplines within the company to evaluate and advise management
on climate change and GHG issues. The committee will report annually to
the board of directors.
Discuss the company's strategies for managing climate risk in its
10-K securities filings with the Securities and Exchange Commission.
Using carbon constrained scenario planning as part of long-term
strategic planning.
Minimize greenhouse gas emissions through various technologies such
as enhanced oil recovery. Two Wyoming enhanced oil recovery projects will
ultimately re-inject about 29 million tons of carbon dioxide into aging
oil fields, a form of carbon sequestration. The project will be one of the
largest of its kind in the world.
"It has become clear to us in the past year that Anadarko is evaluating
the risks and opportunities posed by climate change more seriously than
ever," said Shelley Alpern, director of social research and advocacy at
Trillium Asset Management Corp. "We're pleased to see Anadarko undertaking
an inventory of its greenhouse gas emissions for the first time this year
and will encourage the company to set reduction targets once the baseline
has been established."
The withdrawn Anadarko resolution asked an independent committee of board
members to assess how the company was responding to rising regulatory,
competitive and public pressure to reduce greenhouse gas emissions. Last
year's resolution at Anadarko received 31 percent support.
Apache Corp.
Boston Common Asset Management agreed to withdraw its resolution with
Houston-based Apache Corp. after the company agreed to:
Report on its annual greenhouse gas emission intensity from its
operated projects in the Kyoto I annex countries of the United Kingdom and
Canada, as well as from facilities in Australia and the United States.
Reporting will begin in 2006, based on 2005 calendar year data.
Report annually on its GHG projects, initiatives and issues annually
to Apache's board of directors.
Describe and report the progress of all major GHG projects and
initiatives worldwide on its website.
"We are encouraged that Apache has now committed to disclose key
information, such as GHG emissions data, that we believe will enable
shareholders to evaluate its progress on climate change versus its peers,"
said Steven Heim, director of research at Boston Common Asset Management.
"We will continue to press Apache in the coming years for a rigorous
response to the threats that climate change poses to its long term
business and shareholder value. "
The withdrawn resolution asked an independent committee of board members
to assess how Apache was responding to rising regulatory, competitive and
public pressure to reduce greenhouse gas emissions
ChevronTexaco
Investors cited the following commitments and activities underway at San
Ramon, Calif.-based ChevronTexaco in withdrawing their resolution:
Public acknowledgment on the company web site that the use of fossil
fuels has contributed to an increase in greenhouse gases and that there is
a widespread view this increase is leading to climate change with adverse
effects on the environment.
Developing a long-term greenhouse emission profile.
Setting an absolute greenhouse gas emission goal consistent with the
company's strategy of reducing greenhouse gas emissions. In 2004, the
company set a goal to reduce its emissions by 900,000 metric tons over
2003.
Publicly report on renewable energy investments in wind, solar and
other renewable energy sources by the end of the year.
Factoring carbon costs into capital allocation decision-making and
new investments
"ChevronTexaco has come a long way in acknowledging the threat global
warming poses for businesses and the steps needed to better position the
company in the years ahead," said Sister Patricia Daly, OP, executive
director of the Tri-State Coalition for Responsible Investment, a
coalition of investors with the Interfaith Center on Corporate
Responsibility, that withdrew its shareholder resolution last week. "While
there's room for improvement, these commitments move the company in the
right direction. We will continue to work with the company to build more
momentum on renewables and other business strategies to address global
warming."
The withdrawn ChevronTexaco resolution requested that the board prepare a
report explaining how the company was responding to rising regulatory,
competitive and public pressure worldwide to significantly boost renewable
energy sources.
Tesoro Corp.
The United Methodist Church's General Board of Pension and Health Benefits
agreed to withdraw its resolution with the San Antonio, Texas-based Tesoro
Corp., one of the nation's largest independent refiners, after the company
agreed to:
Complete installation of software at each of its six refineries to
establish a baseline for total current greenhouse gas emissions.
Share the GHG baseline with the company's Environmental, Health &
Safety Committee, comprised entirely of independent board members, for its
use in considering greenhouse gas emission reduction objectives.
Publish greenhouse gas emission data on web site.
"The General Board is encouraged that the Tesoro Corporation is responding
to climate change and is assuming its fiduciary responsibility to assess
climate risk by measuring, monitoring and publicly reporting greenhouse
gas emissions from its refiner operations," said Vidette Bullock Mixon,
director of corporate relations at the General Board of Pension and Health
Benefits. "As a concerned investor, the General Board challenges Tesoro to
expeditiously establish greenhouse gas emission reduction objectives."
Marathon Oil
After winning 27 percent voter support for a resolution last year, the
United Methodist Church's General Board of Pension and Health Benefits
(GBOP) decided not to file a resolution for this year's annual meeting
after Houston-based Marathon agreed to:
Assemble 12 key staff, including three of the top 15 officers of the
company, to meet with GBOP representatives and discuss issues raised in
the 2004 resolution.
Publish a sustainability report in May 2005 and begin GHG emission
reporting, also in 2005.
Company has stated a strategic commitment regarding profit
opportunities in a carbon-constrained world, particularly with natural gas
and gas utilization technologies.
Significant progress in reducing flaring, a major source of
greenhouse gas emissions and a threat to public health.
Unocal
Christian Brothers Investment Services agreed to withdraw its resolution
with Unocal as a result of the following actions by the company to address
GHG emissions:
Created a high level Climate Change working group made up of top
level executives, including the CEO and CFO, and heads of operating units.
The group is charged with monitoring developments relating to climate
change and recommending firm strategy on this issue.
Acknowledges climate change as a risk in its 10-K report and has a
public website devoted to its efforts to mitigate climate change.
Commitment to participate in carbon trading regimes and has a
dedicated staff member to manage its efforts in this area.
Developed about 2,500 MWH of geothermal energy and continues to
develop new sources of geothermal.
Significant progress to reduce operational emissions.
Contacts:
Patricia Daly, Tri-State Coalition for Responsible Investment,
973-670-9674
Steven Heim, Boston Common Asset Management, 802-223-4627
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