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Sharon Kimathi
Energy and ESG Editor, Reuters Digital


Climate investors at major oil companies made some gains during this week’s annual general meetings (AGM) as TotalEnergies, Exxon, Chevron and Shell, backed resolutions to minimize carbon emissions. However, the oil conglomerates shut down proposals for more stringent action to address emissions from consumers burning their fuels, known as scope 3.

TotalEnergies' shareholders voted in favor of the French oil and gas company's climate strategy with 88.89% supporting the proposals. This was down from 91.88% last year when shareholders voted in favor of the climate plan and approved a rebranding marking the company's shift toward renewable energy. Its climate resolution had met earlier opposition from minority shareholders, who pressed the company to go further in plans to cut its greenhouse gas emissions.

The ‘rebrand’ was not enough to appease environmental activists from Greenpeace France and other organizations, who launched a protest on Wednesday outside TotalEnergies' AGM against the company's environmental policies.

At Exxon, results marked a major shift from a year-ago when activist investors secured three seats on its board, a governance landmark. The company has since allocated $2.5 billion per year for projects to minimize its emissions. It seeks an audited report assessing the impact that the transition to net zero emissions would have on its finances. Only 28% of shareholders backed a Scope 3 resolution from Dutch activist group Follow This. If approved, it would have reduced sales of fossil fuels, and made the company set and publish medium- and long-term targets for cutting overall greenhouse gas emissions.

Only 33% of Chevron shareholders voted in favor of climate proposals filed by Follow This at their annual shareholder meetings on Wednesday, as the majority of investors voted against Scope 3 targets. “One-third is a shareholder rebellion," said Follow This founder Mark van Baal, referring to the Chevron vote. "Together with these investors we have to convince the other investors to vote in favor of Paris-alignment as well."

Shell's shareholders backed the oil major’s climate strategy at a meeting that was disrupted by dozens of climate protesters, while a climate activist proposal from the Follow This group received fewer votes than last year. Shell aims to cut to net zero by 2050 all greenhouse gas emissions, including those from burning fuel and from products it sells.

Talking Points

Senegal's President Macky Sall speaks during a press conference with German Chancellor Olaf Scholz (not pictured) at the presidential palace in Dakar, Senegal May 22, 2022. REUTERS/ Ngouda Dione
Senegal's president and African Union chairman Macky Sall said that when he visits Russia and Ukraine in the coming weeks he will push them to unblock exports of grains and fertilizer to avoid widespread famine.
Moving South Africa's coal-dominated economy onto a greener footing will require at least $250 billion over the next three decades, a report released on the sidelines of the World Economic Forum said on Thursday.
Britain announced a 25% windfall tax on oil and gas producers' profits on Thursday, alongside a package of support for households struggling to meet rising energy bills.
A majority of Amazon shareholders voted against each of 15 investor-led resolutions that challenged the company's policies - including its treatment of workers and use of non-disclosure agreements, an executive said at its annual meeting.
Breakingviews: Shares in utilities like SSE and Drax dived on the eve of UK Chancellor Rishi Sunak’s announcement of a package to support households struggling to meet soaring energy bills. Reports on Wednesday had said Sunak was eyeing a raid on the electricity sector’s apparent 10 billion pounds of excess profits. Windfalls from high power prices are hard to grab and North Sea oil is a better target.

In Conversation

Elaine Wood, VP of risk, investigations and analytics practice at global consulting firm, Charles River Associates, tells us her view on the U.S. Securities Exchange Commission’s recent rule changes aimed at tackling greenwashing.
“Recent SEC actions here in the U.S. signal a new focus on accurate public statements and reporting - and assessment of each company’s own process and risk. The SEC crackdown is no doubt making the sustainable funds industry panic – but they don’t need to.

“ESG shouldn’t be seen as a headache, PR stunt or nice-to-have – but as a crucial part of broader standard risk management. Companies face new and emerging risks on a regular basis, and already identified risks are also constantly evolving in tandem. As a result, risk exposures and appetites are constantly changing, too.

“ESG encapsulates more than carbon emissions; it includes diversity of the workforce, inclusivity of employees and general business culture, among many other considerations. Risk management has always had to balance internal and external stakeholder demands and expectations, but as the younger generation join the workforce and demand more of a company’s internal environment, companies must find their own position when it comes to ESG.

“Companies with sound risk management practices in place have always tended to be the most sustainable and profitable, so understanding ESG just makes good business sense – but it shouldn’t require reinventing the wheel. Perhaps old-school risk management can help address this new ESG universe?”
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ESG Lens

Reuters Graphics, May 24
Shell's spending plans remain heavily tilted towards oil and gas. It plans to increase the share of spending on low-carbon energy to about 25% by 2025 from about 15% now. Critics such as Follow This say its spending does not reflect its targets and say Shell's plans to cut emissions from oil well to car exhaust by 20% by 2030 and 45% by 2035 fall short.

ESG Movers and Shakers

British pensions and financial services consultancy Hymans Robertson appointed Paul Hewitson to be head of ESG for risk transfer. Hewitson’s newly created role will see him lead the risk transfer team’s comprehensive review of the ESG credentials of the eight insurance companies that offer buy-ins.

He joined Hymans in February 2020 and specializes in advising trustees and sponsoring employers on risk transfer transactions, with a particular focus on buy-ins. Hewitson was a pensions actuary at global accountancy firms KPMG and PwC prior to joining Hymans.
Candriam, a global multi-asset manager focused on sustainable and responsible investing, has expanded both its ESG development and climate-related thematic global equity teams with four new hires.

Marouane Bouchriha, has been appointed as fund manager on Candriam’s climate action strategy. David Czupryna has been appointed lead fund manager on the firm’s circular economy strategy. Alexandra Russo has been hired into a newly-created role as head of ESG client portfolio management for the United States and the United Kingdom. Marie Niemczyk has been appointed head of ESG client portfolio management, based in Paris.
Pantheon, a global private market investor, has hired Eimear Palmer as partner and global head of ESG – a new role for the firm that will oversee and further develop its established ESG strategy and range of initiatives. Palmer previously worked at the multinational private equity firm, Carlyle Group, where she implemented an enhanced ESG framework for Carlyle Europe Partners.

Quote of the Day

“It’s undeniable there’s less energy with this year’s WEF in Davos - war, inflation and the pandemic have created a palpable sense of unease in the spring air. Yet, having the critical mass of decision makers in one place can move mountains. For example, when the CEOs of Bank of America, EY, BCG and Nasdaq all agreed with Biden’s climate envoy John Kerry that finance and industry must move further, faster, and on the same playbook to defeat climate change, that’s the real magic of Davos.”
Tim Mohin, chief sustainability officer at Persefoni, a climate management & accounting platform

Looking Ahead

Norway's Hammerfest liquefied natural gas (LNG) production facility is scheduled to resume output on May 27 following a fire 20 months ago.
Federal government offices, the Federal Reserve, the International Monetary Fund (IMF), stock and bond markets will be closed on Memorial Day in the United States on May 30.
Find out more about how researchers at Uganda’s Makerere University have built a low-cost air quality monitor dubbed AirQo, in a Reuters report on May 31.
Keep your eyes peeled for our wider image feature on May 31 on how Nigeria, Africa’s most populous nation, has quietly lost almost 10% of its tree cover over the past two decades.
Future of Health
In the open-air kitchen of a small research clinic in Ghana's capital, Accra, pathologist Kafui Akakpo carefully carved a piece of cancerous breast tissue into a sample smaller than a matchbox.

Hundreds of other samples bobbed around him in plastic jars of formaldehyde, but this one would soon travel across town to Yemaachi Biotech, a Ghanaian research and diagnostics startup that Akakpo thinks could change African cancer studies forever.

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