2014 Annual Meeting: 9:00 AM EDT, Wednesday, May 28, 2014
Permian Basin Petroleum Museum, 1500 Interstate 20 West, Midland, Texas, 79701
Chevron has four pending ESG shareholder proposal in 2014.
- ENVIRONMENT: Hydraulic Fracturing
This proposal from As You Sow requests that Chevron supply annual reports “using quantitative indicators” providing “the results of company policies and practices, above and beyond regulatory requirements, to minimize the adverse environmental and community impacts from the company’s hydraulic fracturing operations associated with shale formations.” It also says Chevron should “minimize the adverse water resource and community impacts.”
The supporting statement reads:
Proponents suggest the reports include a breakdown by geographic region, such as each shale play in which the company engages in substantial extraction operations, addressing at a minimum:
– Quantity of fresh water used for shale operations by region, including source;
– Percentage of recycled water used by region;
– Systematic post-drilling groundwater quality assessments;
– Percentage of drilling residuals managed in closed-loop systems;
– Goals to eliminate the use of open pits for storage of drilling fluid and flowback water, with updates on progress;
– A system for managing naturally occurring radioactive materials; and
– A systematic approach to assessing and managing community and human rights impacts, including quantifying numbers and categories of community complaints of alleged impacts, and portion resolved.
- POLITICAL ACTIVITY: Lobbying
This resolution from the American Federation of State, County and Municipal Employees (AFSCME) asks for annual reports on policy, payments, memberships in groups that write model legislation, information on how these payments occur, and how management and the board of directors monitor them. The proposal says the reports should include:
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Chevron used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Chevron’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
4. Description of management’s and the Board’s decision making process and oversight for making payments described in sections 2 and 3 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Chevron is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees and posted on Chevron’s website.
- POLITICAL ACTIVITY: Country Selection
- A perennial proposal form the Teamsters is again on the slate at Chevron. It asks for the company’s “criteria for (i) investment in; (ii) continued operations in; and, (iii) withdrawal from specific high-risk countries.” Until last year the proposal specifically mentioned Burma. The resolution does note that despite democratic reforms in Burma, U.S. Senators have called for a continued ban on doing business with the state-owned oil company, the Myanmar Oil and Gas Enterprise, which National League for Democracy leader Aung San Suu Kyi says “lacks both transparency and accountability at present.” The resolution also notes Chevron’s involvement in other countries “with controversial human rights records: Angola, Kazakhstan, and Nigeria.” The proposal consistently earns about 22 percent, as it did last year.
- SUSTAINABLE GOVERNANCE: Environmental Expert on the Board
NYSCRF has returned to Chevron with its long-running proposal about nominating an environmental expert to the board. The proposal has gone to a vote every year since 2010, winning between 22 percent and 27 percent support. It asks that the company nominate at least one new director who:
- has a high level of expertise and experience in environmental matters relevant to hydrocarbon exploration and production and is widely recognized in the business and environmental communities as an authority in such field, as reasonably determined by the company’s board, and
- will qualify, subject to exceptions in extraordinary circumstances explicitly specified by the board, as an independent director.
NYSCRF says a director is not independent if he or she:
- was, or is affiliated with a company that was an advisor or consultant to the Company;
- was employed by or had a personal service contract(s) with the Company or its senior management;
- was affiliated with a company or non-profit entity that received the greater of $2 million or 2% of its gross annual revenues from the Company;
- had a business relationship with the Company worth at least $100,000 annually;
- has been employed by a public company at which an executive officer of the Company serves as a director;
- had a relationship of the sorts described herein with any affiliate of the Company; and
- was a spouse, parent, child, sibling or in-law of any person described above.
Download Proxy Preview 2014 to find more hydraulic fracturing, lobbying, political activity, and sustainable governance resolutions.