A green shareholder activist group has decided to “pause” its work pushing oil companies to reduce their emissions amid a growing investor backlash against climate action.
Follow This has confirmed that it will not file any climate resolutions against oil and gas companies during the forthcoming AGM season for the first time since 2016.
The Netherlands-based group, which has been one of the most successful shareholder activists of recent years, blamed “the changing political landscape” and “the backlash against climate-conscious investors” for the decision by “most institutional shareholders” to pull their support for climate resolutions.
The group pointed to a number of US states which have taken legal action against big investors for supporting climate action, and the recent decision of US regulators to drop climate investment disclosure rules as key factors behind the trend.
Follow This was taken to court by ExxonMobil last year for its role in calling for the company to reduce its emissions in line with global climate targets, before a judge threw the case out.
The group said that these challenges, combined with global trade tensions, have left investors “uncertain about how to proceed with climate action”.
Mark van Baal, the founder of Follow This, said: “Shareholder resolutions have been critical in compelling five oil majors to set emissions-reduction targets, but most institutional investors are reluctant to use their voting power.”
He said that the group’s mission would remain unchanged, and it would continue to engage with investors to understand why they do not use their shareholder rights to demand change from the companies they invest in.
Follow This holds a small number of shares in oil companies in order to put forward shareholder resolutions which demand that they align their activities with the decarbonisation agenda put forward in the Paris climate agreement.
The group’s most notable triumph was a resolution against the board of the US oil company Chevron calling for emissions reductions which won support from 60% of its shareholders at an AGM in 2021.
after newsletter promotion
“In 2021, we saw the potential for widespread support,” Van Baal said. “[But] to compel oil giants to make significant investments in clean energy, investor pressure must rise.”
Instead, support for the group’s resolutions has plateaued at about 20% in the years since.
Van Baal said: “Together with supporting investors, we must convince all responsible investors that they have an unambiguous financial imperative to act.
“Big oil can make or break the Paris climate agreement. Their shareholders have only one formal power: the power of the vote. It’s time for more investors to exercise their vote.”
