Deactivating climate activism? The seven strategies oil and gas majors use to counter rising shareholder action
Pete Tillotson, Raphael Slade, Iain Staffell, Krista Halttunen
Abstract
International oil companies (IOCs) are facing mounting pressure to transition towards low-carbon business models in line with the Paris Agreement's goals to limit global warming. Shareholder activism in oil and gas companies has increased rapidly over the past decade but has not yet been widely researched. This study explores company communication strategies within the context of climate and transition-related shareholder activism at IOC annual general meetings (AGMs). We analyse 123 relevant proxy statements produced by ExxonMobil, Chevron, and BP at their AGMs from 2006 to 2022. This yielded 10 distinct categories of resolution request, and seven common themes of communicative strategy deployed by IOCs. IOCs were generally successful at minimising the impact of climate-related and environmental shareholder activism, with most resolutions unsuccessful, and even successful ones having limited impact on company performance. However, recent shareholder revolts reveal the oil and gas (O&G) sector is experiencing more instances of, and more successful, investor pressure to improve environmental performance. Cases of voluntary changes in company policy and behaviour further indicate the potential for shareholder activism to influence low-carbon transitions. Further research of the phenomenon itself to gain greater understanding of IOC response strategies can yield insights into the nature and likelihood of a transition away from fossil fuels in the future.