Proxy Season Update: ConocoPhillips

2014 Annual Meeting: 10:00 AM EDT, Tuesday, May 13, 2014
Omni Houston Hotel at Westside, 13210 Katy Freeway, Houston, Texas 77079

ConocoPhillips has two pending ESG shareholder proposals in 2014.

  • ENVIRONMENT: GHG Reduction Targets
    • This proposal requests the company set greenhouse gas reduction targets.

      RESOLVED: shareholders request that the Board of Directors adopt quantitative goals, based on current technologies, for reducing total greenhouse gas emissions from the Company’s operations; and that the Company report (omitting proprietary information and prepared at reasonable cost) to shareholders by September 30, 2014, on its plan to achieve these goals.

      The resolution’s supporting statement reads:

      For several years, ConocoPhillips has acknowledged the importance of addressing global climate change, and the need to develop greenhouse gas targets for its operations, a process the company says is underway. However, no targets for reductions have been established after all this time, and there appears to be no timeline for setting one. We believe setting targets is an important step in the development of a comprehensive long term strategy to significantly reduce greenhouse gas emissions from operations and products.

      As the downstream operations were spun off on April 30, 2012, quantitative goals are even more important given the trend since 2008 of rising emissions per unit of production from the upstream operations that now constitute ConocoPhillips.

      Your support by voting “Yes” will signal to our company that we should move forward.

    • This resolution from Walden Asset Management 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 ConocoPhillips 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. Description of the decision making process and oversight by management and the Board for making payments described in section 2 above.

      The resolution’s supporting statement reads:

      As shareholders, we encourage transparency and accountability in the use of staff time and corporate funds to influence legislation and regulation both directly and indirectly.

      This resolution received 26% voting support in 2011.

      We appreciate the update on the company website on both political spending and lobbying including expanded management oversight. But the website disclosure is incomplete since it does not disclose lobbying priorities nor contributions to trade associations used for lobbying.

      ConocoPhillips has been on the Board of the United States Chamber of Commerce which is noted as “by far the most muscular business lobby group in Washington” (“Chamber of Secrets,” Economist, April 21, 2012). Since 1998 the Chamber has spent approximately $1 billion on lobbying. Yet ConocoPhillips does not disclose its Chamber payments nor the portions used for lobbying.

      This is an integrity problem for ConocoPhillips since the Chamber actively opposes many environmental regulations and sued the EPA when it moved to regulate certain greenhouse gas emissions.

      ConocoPhillips spent approximately $45 million in 2010, 2011 and 2012 on direct federal lobbying activities, according to disclosure reports (Senate Records). These figures may not include grassroots lobbying to directly influence legislation by mobilizing public support or opposition nor lobbying expenditures in states that do not require disclosure.

      Since ConocoPhillips is now a new company and its lobbying activities and expenditures may have changed, it is an opportune time to set the record straight and disclose company priorities and expenditures going forward. Disclosure is in investor’s best interest.

Download Proxy Preview 2014 to find more greenhouse gas emissions and lobbying shareholder resolutions.