A shareholder activist group that seeks to “change the system from within” is pausing its climate activism.
Dutch group Follow This has announced it will not seek to file any climate resolutions at oil and gas company shareholder meetings this AGM season, after a loss of investor appetite for climate action.
It follows the weakening of energy transition commitments in recent months from the likes of BP, Shell and Equinor, as they double down on more profitable fossil fuels.
A “changing political landscape” and global trade tensions are also to blame, according to Follow This, which began its brand of activism in 2016.
What has Follow This achieved?
Follow This subscribes to the logic that Big Oil won’t change unless its shareholders demand action.
By becoming a ‘green shareholder’ in some of the world’s most polluting companies, the activist group has put forward proposals demanding they align with the Paris Agreement’s directive to cut emissions, and convinced other shareholders to vote for these resolutions too.
Since 2016, the group has achieved shareholder support of 80 per cent at Phillips 66, 60 per cent at Chevron, around a third at Exxon and Shell, and a fifth at BP, Reuters reports.
The Chevron victory came at an AGM in 2021, when 60 per cent of shareholders backed the call to cut emissions. “In 2021, we saw the potential for widespread support,” Follow This founder Mark van Baal told the UK’s Guardian paper. “[But] to compel oil giants to make significant investments in clean energy, investor pressure must rise.”
However, the group has only mustered around 20 per cent support from shareholders in the last few years.
Follow This faced a significant setback last year, when Exxon sued it together with Arjuna Capital for filing a climate-related resolution. A judge dismissed the case, but only after the defendants withdrew the resolution and promised not to resubmit a similar one or help others to do so.
There has been further hostility in the US recently, with some states taking legal action against big investors for supporting climate proposals.
Why are fossil fuel companies backtracking on climate commitments?
Major oil and gas companies have been reneging on their climate commitments in recent months.
In February, for example, BP announced it was scrapping a target to increase renewable generation 20-fold by 2030, returning the focus to fossil fuels in an attempt to tackle investor concerns over earnings.
Van Baal told the Guardian that the group’s mission will remain unchanged. It will continue to engage with investors to understand why they do not use their shareholder rights to demand change from the companies they invest in.
Meanwhile, climate campaigners will be turning up the heat externally as AGM season starts.
“Big oil’s big money is right now participating in one big backlash - against climate regulations from government, against zero commitments in banking, against renewable investments at fossil fuel companies,” Robin Wells, director of Fossil Free London, tells Euronews Green.
“As Shell and BP tear up their climate plans, scoffing over oil profits, what all of us citizens have always understood is now the clearest it has ever been - the fossil fuel industry is not going to willingly stop being the fossil fuel industry.”
