Zevin Views
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Zevin Views

Investors challenge business as usual at Chevron

Update: Our shareholder proposal urging Chevron to find an Independent Chair received 39 percent support at the company’s annual meeting this week. That is an unusually strong signal that Chevron is on the wrong track and needs to break with business as usual. Through our proposal, investors voted for independent, empowered oversight of climate risk and corporate strategy. We’ll keep pressing for positive impact — now with the board’s attention.

Zevin Asset Management’s commitment to social and environmental responsibility shapes our investment process, so we generally don’t buy stock in the huge oil companies that are driving climate change. However, when our clients inherit legacy shares in major energy companies, we take the opportunity to press management for positive impact on climate action and human rights — just like we do across the rest of our portfolios.

Chevron offices in Houston. (Creative Commons, Jonahtan McIntosh)

That’s why this week we’re urging the board of Chevron to find and appoint an Independent Chair — an objective and empowered leader that will challenge executives and oversee Chevron’s risky business.

The shareholder proposal we put on the agenda of Chevron’s 2017 annual meeting argues that an Independent Chair policy is a commonsense reform that will benefit the firm and its shareholders.

According to the Millstein Center at Yale, an “independent chair curbs conflicts of interest” and “promotes oversight of risk.” And research suggests that companies that separate the roles of Chair and CEO have more reasonable executive pay and potentially higher 5-year shareholder returns.

But an Independent Chair is especially important at Chevron. Along with the rest of the oil majors, Chevron faces a range of complex risks:

  • Physical impacts of climate change
  • Global efforts to regulate carbon to avoid catastrophic 2-degree global warming
  • Chronic over-spending on capital projects
  • Unstable energy prices
  • And growing uncertainty about the value of many oil investments

Chevron has taken a few steps in the right direction. However, all of these risks require the long-range, objective scrutiny that only an empowered board and truly Independent Chair can provide. Management’s judgment alone is not enough. And the gravity of these risks, especially climate change, means that Chevron’s current “lead independent director” is not enough either.

Oil pollution in Ecuadorian Amazon. (Creative Commons, Julien Mushrooms)

Stubborn environmental issues make independent oversight even more important. Our proposal cites the ongoing effort by communities in Ecuador to enforce a $9.5 billion judgment against Chevron for oil pollution that devastated their communities. (Texaco, since acquired by Chevron, had an operation in Ecuador’s Amazon region between 1964 and 1992.)

That case has gone through twists and turns. Chevron has used aggressive legal tactics to try to avoid enforcement of the Ecuador judgment, and last year the company fought off the case in the United States. But there are multiple forums around the world where the Ecuador judgment may still be enforced, including Canada and Brazil. So, investors will continue to watch that space and press Chevron for better board oversight of the entire process.

Thanks for reading and sharing. For more on our other work on climate risk and the environment, join us on our website, Medium, and Twitter. And contact me with any questions.


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Pat Miguel Tomaino

Pat Miguel Tomaino


Socialist he/him in Boston. Significant stints & projects at @ZevinAssetMgmt , @RadioOpenSource , @1199SEIU , @EWarren , @BMOGAM_UK