Shareholders of Occidental Petroleum Vote to Support Climate Risk Planning

05.19.2017 50/50 Climate Project

During Occidental Petroleum’s shareholder meeting on Friday, May 12, 2017, a majority of shares voted in favor of a shareholder proposal seeking an assessment of Occidental’s energy portfolio for long-term climate change impacts consistent with the Paris Climate Agreement’s goal of limiting global temperature increases to 2 degrees Celsius (“2 Degree Scenario Stress Test”).

The key ingredient to this historic shareholder vote at Occidental Petroleum is engagement by investors, with the backing of the 50/50 Climate Project, with large investment managers. BlackRock’s first-time vote FOR a climate change shareholder resolution opposed by the board of directors signals that fund manager engagement efforts by investors has borne fruit and that large asset manager views on climate risk are evolving.

The following are some noteworthy news articles, and excerpts from them, that highlight the unprecedented degree of investor support for the climate risk planning shareholder proposal at Occidental Petroleum. Official vote results for the “2 Degree Scenario Stress Test” proposal are expected to be released by the company this week.

1. Pensions & Investments

“The passing of this resolution is a sign of progress. It is a first in the United States. The vote at Occidental demonstrates an understanding among shareowners that climate change reporting is an essential element to corporate governance,” said Anne Simpson, CalPERS’ investment director, sustainability, in an emailed statement. “I believe that we will see many more companies move in this direction. This vote shows that investors are serious about understanding climate risk.”

2. Bloomberg

“When we do not see progress despite ongoing engagement, or companies are insufficiently responsive to our efforts to protect the long-term economic interests of our clients, we will not hesitate to exercise our right to vote,” BlackRock said a statement posted to its website on Occidental’s AGM date.

3. The Wall Street Journal

The Nathan Cummings Foundation, which led the proposal along with Wespath Investment Management, said Friday’s passing vote puts the oil-and-gas industry on notice that investors are looking more seriously at climate issues.

“It’s hugely significant,” said Laura S. Campos, director of corporate and political accountability at the Nathan Cummings Foundation. “It’s the first, but it’s not going to be the last.”

4. Climatewire

“While the resolution passage at Occidental was an aberration in the history of shareholder activism on climate change issues, with the help of major investors, it may kick off a trend.”