Chevron’s Largest Investor Urged to Vote FOR both Justice & Shareholder Value
This morning, we sent the following letter to Vanguard Group chair F. William McNabb. At Chevron’s May 30th annual meeting, shareholders will vote on a proposal filed by Newground Social Investment that calls on the company to allow shareholders to call a ‘Special Meeting’ at their own time and with their own agenda.
This is needed to discuss issues like the company’s liability for environmental destruction in the Ecuadorean Amazon.
As Chevron’s largest shareholder, Vanguard has tremendous power to press the oil giant to change its policies and practices to be more just and sustainable, while also safeguarding shareholder value over the long term.
May 29, 2018
F. William McNabb, Chair
Vanguard Group
100 Vanguard Blvd
Malvern, PA 19355
Re: Chevron’s Investment Risk from Ecuador Litigation
Dear Mr. McNabb:
We hope this letter finds you well. We write as fellow investment managers and long-time admirers of Vanguard’s well-deserved reputation and success. Like you, we are engaged members of our communities, and our respective firms work to achieve positive social and environmental outcomes while creating value for our individual and institutional clients.
We write today with some measure of urgency in regard to the upcoming Chevron annual shareholder meeting that takes place this Wednesday (May 30, 2018). By way of background, we recently spearheaded an invitation to Chevron’s new leadership[1] on behalf of 36 institutional investors that collectively represent $109.44 billion in assets under management.
As you’re no doubt aware, a persistent concern and the primary focus of two shareholder proposals filed this year (Item #8 on Independent Chair, and Item #10 on Special Meetings) are the risks posed by long-standing litigation related to Chevron’s acquired liability of Texaco pollution in the Ecuadorian Amazon.
The most recent developments include:
- A ruling last week will send the Chevron-Ecuador case to Canada’s Supreme Court.
- Chevron has lost three of its last four appellate rulings.
- Canada’s Supreme Court is considered by some to be one of the world’s most friendly toward human rights issues.
For years, civil society groups in the U.S. and around the world have been deeply concerned about and active on this issue, and just this weekend we became aware of a new campaign from the international organization Avaaz[2] that focuses on Vanguard’s ownership stake in Chevron. It is addressed to you personally.
Specifically, the campaign calls on Vanguard to flex its considerable shareholder muscle to help persuade Chevron’s new leadership to put an end to decades of litigation that have damaged the company’s reputation, not to mention impacts on shareholder value. From a responsible investment perspective this would be beneficial, but from a shareholder perspective this could likely be far less costly over time than the current strategy.
The Avaaz petition — which over half-a-million people have already signed — reads:
As citizens worldwide who cherish our planet, we believe Chevron should be held accountable for the devastation caused to the lands, rivers, and people of Ecuador. We urge you to support the two shareholder proposals by Zevin Asset Management and Newground Social Investment, and use your influence to get others on board. As Chevron’s biggest shareholder, you have major influence to persuade Chevron’s management to reach a fair settlement with the affected communities in Ecuador.
This week, a decisive public statement and a FOR vote by Vanguard on the two relevant Chevron shareholder proposals could be a game-changer, given Vanguard’s position as a market mover, industry leader, and significant Chevron stockholder. The two proposals are Item #8 on Independent Chair, and Item #10 on Special Meetings.
We’d be more than happy to discuss via phone or email at your convenience, and to share notes on our own process of engaging with Chevron. In the meantime, we welcome hearing your thoughts on the matter. Thank you kindly!
Sincerely,
Bruce T. Herbert, AIF
Chief Executive
Newground Social Investment | Investor Voice
Pat Miguel Tomaino
Director of Socially Responsible Investing
Zevin Asset Management, LLC
cc:
Mortimer J. Buckley, CEO, Vanguard Group
The Vanguard Investment Oversight Committee
[1] http://www.newground.net/Chevron-Investor-Letter-2018.pdf
[2] https://secure.avaaz.org/campaign/en/chevronamazon/
