Big news for Fossil Free California’s CalPERS divestment campaigns: on May 12 at a shareowner meeting of Occidental Petroleum, CalPERS “climate risk reporting shareowner resolution” passed. The resolution will require Occidental Petroleum to report to its shareholders on risks and opportunities associated with climate change.
The resolution is the first of its kind in the U.S. With its passage, Occidental will now have to explain to investors how future changes to both climate and economy will impact its business. Going forward, the corporation will need to be clear about the risks it faces from both physical changes caused by climate change, and policy decisions that move the country toward a low carbon economy.
Kirsten Spalding, director of the Ceres investor network, which focuses on sustainable investment, said “we count this as a major win,” noting that the resolution asks Occidental to consider analysis for the scenarios that limit global warming to less than 2 degrees C. Spalding continued, saying “[the resolution is] going to impact the entire sector and it moves us in the right direction.”
Surprise support from BlackRock
CalPERS put forward Resolution #5 at Occidental’s annual meeting. The resolution passed, though, with support from BlackRock Inc. The investment management company, which has $5.4 trillion under management, is Occidental’s biggest investor, with about 8 percent of the oil company’s shares.
Reuters reported that BlackRock opposed a similar resolution at Occidental’s shareowner meeting last year. In a statement from BlackRock spokesman Ed Sweeney said the company is “concerned about the lack of discernible improvements to [Occidental’s] reporting practices.” Because last year’s proposal failed by a narrow margin, it seems that BlackRock’s large stake in Occidental tipped the scales this year.
Amid growing calls for CalPERS and other big public pension funds to divest from their fossil fuel holdings, CalPERS typically says it prefers “engagement” with Big Oil and other problematic corporations. This resolution is a first in the realm of successful engagement—reporting on climate related risks to shareholders is a definite step in the right direction. We hope it is indeed the beginning of the “sea change” that Ceres thinks it is.
Read the CalPERS statement on the resolution here.