Shareholders in the US have produced the highest level of support yet for a resolution on the issue of stranded carbon assets.
The resolution, brought at the annual meeting of Anadarko Petroleum, gained the backing of 30% of shareholders, who supported a request that the company ‘prepare a report analysing the financial risks of significantly reduced demand for oil and gas resulting from regulation or other climate-associated drivers’.
The resolution also called on Anadarko, which is one of the world’s largest publicly traded oil and gas exploration and production companies, to show how it is addressing such risks.
Previously the highest level of support for a resolution on stranded carbon assets was 20% in 2013 at the annual meeting of the US-based coal company Consol Energy. The pressure group As You Sow, which was responsible for both resolutions, said investors are becoming increasingly exercised by the idea of stranded assets.
Danielle Fugere, chief counsel at As You Sow, said: ‘Some companies have begun addressing the issue with shareowners, although their communications thus far have been disappointing. Investors are rightfully asking how they are addressing these risks.’ Both Shell and ExxonMobil have agreed to produce reports on stranded assets as a result of shareholder resolutions.
As You Sow’s resolutions form part of an initiative launched in November by the US-based environmental group Ceres along with the Carbon Tracker initiative. So far 12 companies in the US have been asked to explain at annual meetings how they will address lower fossil energy demand scenarios in the future, and to outline what they will do if fossil fuel reserves do become stranded assets.
In September the Principles for Responsible Investment (PRI) will be running the annual ‘PRI in Person’ conference in Montréal, Canada. As part of the conference a session will tackle the issue of stranded assets and provide insights on the strategies investors are using to mitigate risk. To find out more about PRI in Person, including the session How do responsible investors view energy? click here.