Ross Kerber, Simon Jessop

BOSTON/LONDON – Big Oil is enjoying a more relaxed ride this year at shareholder meetings than last year, when there was a punishing string of hostile votes from investors tied to climate issues. However, tight oil supply has made those concerns irrelevant.

Major oil companies defeated several prominent climate resolutions introduced by shareholders activists during the current round of annual general meetings.

Investors are more positive than ever after Russia invades Ukraine. It also coincides closely with an increase in energy prices due to Russia’s intervention. Many companies have been trying to boost plans to shift to a low carbon economy, which has been under pressure for years.

It is possible that Big Oil convinced investors that the energy crisis outweighs the climate crisis,” stated Mark van Baal, Dutch environmental activist and Follow This organization. This group filed many of the defeated resolutions at the recent AGMs. They were referring to Ukraine’s impact.

Companies faced an increase in shareholder support last year for resolutions and votes regarding environmental and other social issues. ExxonMobil Corp (NYSE:) Corp had, for instance, three directors elected to its Texas-based board. This was a significant win for Engine No. 1 activist investor Engine No. 1.

However, that was before.

Only 15% of the shareholder votes at BP (NYSE)’s May 12 annual meeting voted for a call to British oil giant to increase its energy transition. That compares with the 21% that favored it in a similar vote last January.

Additionally, at the May 6th shareholder meeting 17% supported Occidental Petroleum Corp (NYSE 🙂 calling for emissions reduction targets. 16% supported a March 27 measure asking Marathon Petroleum Corp. (NYSE 🙂 to give information about how it’s transition plans have affected communities and workers.

ConocoPhillips’ (NYSE:) 58% of the votes last year backed a campaign to establish emissions-reduction targets. Only 42% supported an identical measure on May 12, which also requested that the Houston-based company set global emissions reductions consistent with Paris climate goals. According to a Securities filing,

Exxon holds shareholder meetings Chevron Shell (LON 🙂 and (NYSE 🙂 are scheduled for this month.

Analysts claim that investors have shifted away from environment priorities partly because they are concerned about tightening energy supplies due to the conflict in Ukraine. Russia refers to it as “special military operation.”

Geopolitics have “provided a compelling plausible excuse to procrastinate rather than committing to vital climate actions,” stated Abhijay Soom, financial sector research manager at ShareAction (a non-governmental organization that emphasizes responsible investment).

Caitlin M. McSherry is director of investment management at Neuberger Berman. She said that investors might also respond to additional information many companies provide on their transition plans.

McSherry indicated that this gave “maybe some investors more comfort” in voting for management. Neuberger did not discuss the details of most votes.

Occidental had argued the company already has appropriate targets. A representative from the Houston-based firm said that the result of its AGM “reflects how Oxy’s shareholders feel about the company’s net zero strategy and the rigorous, disciplined targets we have set.”

A ConocoPhillips spokesperson said the vote at its AGM supported its view that the shareholder proposal for emissions was “not the right solution for an E&P (exploration and production) company with a transition-oriented portfolio and production.”

Marathon of Ohio, which is based in Ohio, declined to comment on its AGM vote.

BP didn’t immediately reply to a request of comment.

BLACKROCK PULLBACK

BlackRock Inc, a leading asset manager (NYSE:), has proved to be a market driver. It recently stated it would not support more resolutions related to climate change as many of them were too strict.

A series of votes in similar veins at Wall Street’s top banks also showed a change in mood.

Andrew Logan is the senior director for oil and gas at Ceres. Ceres is a Boston-based non-profit that seeks investor support for climate proposals. Logan said low attendance at AGMs may reflect activists’ efforts to convince companies to disclose their emissions. This would be a simpler change than making plans.

“We are finding an equilibrium here as far as what investors are willing and able to support.” Logan stated that it is a healthy and positive process.

Strong support still exists for some environmental resolutions made at shareholder meetings. On Jan. 20, Costco Wholesale Corp. (NASDAQ:), saw 70% support a request for big-box retailers to establish emissions-reduction goals. Costco is based out of Washington. It did not respond to an immediate request for comment.

Heidi Welsh, the executive director at the Sustainable Investments Institute which tracks shareholder resolutions, stated that politics might have been a factor in Big Oil’s election.

Republicans from Texas and Florida have fought against corporations that they claim have gone too far to impose social or environmental policies.

Welsh suggested that “it might be the case, that the large (asset), managers have their eye on whom’s going to get elected in the Fall and they don’t want to lose sight of who it is” for Republicans.