Hot, Hotter, Hottest – Meet Chevron

Hot, Hotter, Hottest – Meet Chevron 

Give Me Swelter

The Pacific Northwest sizzles, a region where air conditioning is not regarded as a necessity, but where records for unabated heat, well over 110 degrees Fahrenheit sustained (118 degrees even in British Columbia, Canada), are being broken every day. Alaskan and Canadian glaciers melt away, icy mass contracts, perhaps forever. Heat reflecting snow and ice replaced by darker, heat absorbing waters and soil, methane – almost 24 times heavier than carbon dioxide – released from millennia’s entrapment within seemingly endless tundra plains (permafrost). Flood waters rising. Coastal erosion along pricey urban ports of call. Droughts terminating agriculture, resulting in desperate migration meeting hostile reception. Killer floods elsewhere in stark contrast.

Have we reached that tipping point, where global warming can no longer be contained by releasing less carbon-based emissions from activities mankind can control? Where nature’s rage is not so simply reversible, where not only carbon emissions must cease, but where active carbon gas removal is now required? Are those climate change deniers, who believe that current trends reflect merely normal climate cycles that will eventually return to familiar weather, able to continue to slow efforts to contain and reverse climate change as they have to date?

There indeed is still a massive human anti-carbon-containment constituency, from India’s farmers burning fields in an annual clearance ritual to American coal miners demanding increased use of their most toxic contributor to global warming to Brazilian efforts to burn away Amazonia for exploitation to automakers fighting a rear-guard action as the inevitable transition to non-fossil-fuel powered cars explodes. Why should those at the bottom of the economic ladder be required to make the largest sacrifices, when in fact a fossil-fuel-driven industrial boom made those at the top of the monetary food chain rich?

America’s corporate laws, unlike comparable laws in many developed nations, place a fiduciary duty with a public corporation’s board of directors for one, and only one, stakeholder: shareholders, and in particular, shareholder values. Employees, the local impacted communities, and society in general ARE NOT STAKEHOLDERS. A board can only implement socially conscious limitations and costly solutions to social/environmental problems if they are governmentally required or if such efforts would make the company more attractive to investors, consumers and potential top level recruited employees. But what if it is the shareholders themselves who determine that the company must take a more active role in solving social and environmental issues? Enter oil conglomerate Chevron at its recent annual shareholders’ meeting.

Michael Hiltzik, writing for the June 27th Los Angeles Times, explains: “Chevron, one of the world’s leading oil companies, got a major wake-up call on climate change from shareholders May 26… At its annual meeting that day, a stunning 60.7% of shareholders voted for the company to ‘substantially’ reduce its greenhouse gas emissions… The vote was surprising for a couple of reasons… One was its magnitude. Majority votes in favor of shareholder resolutions opposed by corporate management, as this one was, are exceedingly rare in corporate America.

“The other was that it supported a policy sharply at odds with the company’s long-held business model… ‘This was an ask that a couple of years ago would have been a very hard sell to most investors,’ said Andrew Logan, an oil and gas expert at Ceres, a Boston nonprofit that helps develop sustainability strategies for industry.

“But investors have been asking for much more from corporate managements — more disclosures about how their activities contribute to climate change, and more about how climate change will affect their destinies.

“Nor are these demands coming only to fossil fuel producers. They’re being felt by manufacturers, retailers, bankers — almost any company exposed to global climate change… ‘Investors want to know how a company is preparing for a different world where there’s more regulatory change and more environmental change,’ said Ann Lipton, a business law expert at Tulane University who has been tracking corporate responses to these inquiries.

“The pressure isn’t coming only from investors. In March, the Securities and Exchange Commission issued a call for public comment on climate change disclosure. More than 5,500 comments have come in, most of them endorsing greater disclosure.

“The SEC request signals the agency’s intention to issue some sort of rule mandating greater disclosure, though the rule-making is probably a few years off… Consumers and employees are increasingly interested in how the companies they buy from or work for are dealing with their effect on the environment.” But is it time to address the bigger corporate governance question? Should American corporate law, currently mostly determined by state statutes, require additional stakeholders entitled to comparable fiduciary duties currently only accorded to shareholders? It’s been happening that way all over Europe for years.

In many cases, where governmentally imposed statutes and regulations are pending, you may witness corporate associations suggesting voluntary industry-wide self-regulation to divert such governmental efforts… and minimize them as well as the penalties for non-compliance. The motive behind that effort is to reduce effective containment, pretending a corporate “good-guy” effort is trustworthy. But responsible companies do not want to make themselves less cost-effective than their competitors; they do not want to incur socially responsible costs that give their non-compliant competitors a pricing advantage. 

Chevron’s shareholders are a newfound anomaly, a rarity in corporate America and one that, under current laws, can only emanate from shareholders. There are other solutions that must be implemented… yesterday. Expanding fiduciary responsibility beyond shareholders would just be a start. Voluntary corporate self-regulation almost never works.

I’m Peter Dekom, and we need to know that political, social and business structures developed in vastly different times absolutely need to be updated and modernized to deal with the litany of existential issues we face today.