It is not every day that the super and environmental campaigners address the annual general meeting of one of the world’s largest oil companies.
That’s what happened earlier this year when Australian Heath Hoske spoke with Norwegian equinor shareholders at AGM in Stavang.
He demanded that they get a resolution to halt Equinor’s plans for a small Australian offshore oil drill – off the coast of South Australia – one of the world’s most uncertain marine environments.
Oil and gas extraction poses a serious threat to the local wildlife and climate, says Mr Joske, who lives in the region.
“We see your plans to drill in the Bight as a direct threat to our culture and identity,” he said at the meeting.
This is just the latest example of how so-called shareholder activism is being used to put pressure on big energy firms to pursue green policies.
Mr Joske spoke on behalf of an alliance of environmental groups – led by Greenpeace Norway and the World Wildlife Fund – that had acquired enough equity in Equinor to be able to bring their resolution to the AGM.
The motion called on the company to stop oil-and-gas exploration and production in “frontier” and “pristine” environments that would include the Bight.
While it did not get enough votes to pass, it did make publicity for the campaign, which aims to convince Australia’s regulator to reject Equinor’s proposals when it announces its decision later in November.
“Shareholder activity and the dialogue it holds between shareholders and the board of directors are an important element of good corporate governance,” says Brynn O’Brien, the head of the Australasian Centre for Corporate Responsibility.
The ACCR backed Equinor’s petition in May and brought in other companies such as BHP Billiton and Rio Tinto.
Ms. O’Brien says, “even though resolutions that are not supported by boards rarely pass, they quite often produce change in terms of company obligations to increase action to reduce emissions.”
They can also convince firms to stop lobbying that is “inconsistent” with the goals of the 2015 Paris Agreement, which aims to reduce the risks and impacts of climate change globally.
One of the most successful activist groups has been Climate Action 100+, a global system of institutional investors that targets the world’s 100 largest corporate greenhouse gas emitters.
Its 370 members, who have 35tn dollars of assets under management, include good-known names such as Aberdeen Standard, the Church of England Pensions Board and HSBC Global Asset Management.
In March, the group with others forced the oil giant Shell to make a legally binding commitment to use a broader definition of greenhouse gas emissions in its carbon-reduction targets.
Commenting on the resolution while talking, Shell said he acknowledged and agreed “with the importance of its investors on climate change.” It was also mentioned that the company’s future success “is due to its ability to effectively navigate the risks and opportunities presented by climate change.”
Also, at BP’s AGM in Aberdeen in May, Climate 100+ secured overwhelming approval for a motion that called on the oil giant to document its efforts to meet Paris Agreement goals in quarterly reports.
As shareholder resolutions are almost non-binding, BP could choose to ignore it. But the oil firm had held discussions with Climate 100+ before its AGM and agreed to support the proposal.
“Climate 100+” has been really interesting to watch because they employ an engagement-first model as opposed to a shareholder proposal-first model,” says Courteney Keatinge, head of environment at shareholder advisory Glass Lewis.
“It has worked with targeted companies, trying to understand their positions and priorities, before submitting a shareholder proposal which is often seen as a more combative move by companies.”
Despite such successes, major greenhouse gas emitters continue to burn and extract fossil fuels, and Ms. Keatinge suggests there is only so much shareholder activists can do.
“Without strong regulatory pressures and market incentives, companies are going to continue to extract oil and coal at their own discretion.”
“There is an energy market and if these needs are not met, companies are going to find a way to deal with them.”
Despite pressure from shareholders and campaigners, Equinor still hopes that Bight will start drilling. He claims that he has a safe drill record and that the project will benefit both its shareholders and the people of South Australia.
“Production from existing oil and gas fields is declining and a new supply is needed to meet future energy demand,” said spokesman Eric Holland.
“Even in the recognized scenarios of the future, which are consistent with the objectives of the Paris Agreement, there is a significant demand for oil and gas for the next decades.”
However, Ms O’Brien believes the company could take legal action if its plans go ahead. This is because new drilling projects are very expensive, and the oil market has been unsustainable lately.
“The break-even point – how much a barrel of oil would have to be worth to justify the capital expenditure on the infrastructure that goes along with a frontier drilling operation – is rapidly rising,” says she.
“If shareholders – including Norwegians, private investors and other states – lose money, they may be able to sue for damages if these decisions are made in circumstances that were unreasonable.”
Australia’s National Petroleum Safety and Environment Authority will announce its decision on the Equinor plan on November 14. He has in the past rejected a similar request from BP.
From his home in South Australia, Mr Khoske tells the BBC that if drilling goes ahead, the resistance of the community will be heightened.
He also believes that the shareholder resolutions introduced at Equinor’s May AGM were worthwhile, even though the firm did not change course.
“Nothing has changed here. We are waiting for the decision right now and if they do, it has grown serious, opposition-wise.”
