Carbon Asset Risk

We are filing shareholder resolutions with companies asking for risk scenarios and mitigation plans to address the potential stranding of fossil fuel reserves. If fossil fuel reserves cannot be burned, companies holding these reserves will be overvalued, and the resulting “carbon bubble” created by overvalued reserves puts investors at risk.

Chevron Shareholders with $7.75 Billion in Stock Vote to Increase Dividends to Protect Investor Capital in the Face of Risky Investments in Costly Carbon Reserves

Avoiding “An Economically Unsustainable Path”: Message to Chevron Board About Shareholder Concerns


An As You Sow and Arjuna Capital shareholder resolution calling on Chevron to increase dividends to shareholders in light of continued outsized spending on high-cost, high-carbon projects — including Arctic drilling, tar sands, and other “unconventional” fossil fuels that are increasingly uneconomical and likely to be stranded — drew the support of shareholders with $7.75 billion of the company’s stock (4 percent). The resolution was co-filed by Zevin Asset Management.

Read our full statement

The vote underscores shareholders growing concerns about Chevron’s snowballing outlay of capital despite weakening company fundamentals, changing energy markets, and growing climate change impacts. The resolution also goes a step further than recent greenhouse gas transparency and reporting resolutions at BP and Shell, which garnered record-high shareholder support, asking the company to take the steps necessary to protect shareholder value. The filers view today’s Chevron annual meeting vote as an extremely encouraging outcome for a first-time resolution addressing a new and timely issue and shareowners intend to increase the pressure on Chevron and other oil majors in 2016 to respond to shareowners’ concerns.

Read the shareholder resolution

Recent News

In Wake of Major Climate Votes at BP and Shell, How Will Chevron Shareholders Respond Next Week?

Nearly Unanimous Votes for Greater Climate Transparency to Be Followed by “Tougher” Resolution at Chevron Shareholder Meeting on May 27th


The 2015 shareholder season has seen record-high votes by shareholders at BP (98%) and Shell (99%) seeking greater disclosure of climate-related risks. On May 27th, Chevron shareholders will meet to address a more ambitious shareholder resolution from As You Sow and Arjuna Capital. The resolution asks Chevron to increase dividends to shareholders rather than continue outsized spending on high-cost, high-carbon projects, including Arctic drilling, tar sands, and other ‘unconventional’ fossil fuels, that are increasingly likely to be stranded.

Read our full statement

“Chevron’s continuing to pour billions into finding and developing remote, high-cost, high-carbon reserves is increasingly imprudent,” said Danielle Fugere, president and chief counsel at As You Sow. “Shareholders are no longer willing to trust Chevron’s business as usual, head-in the-sand approach to the clear structural challenges facing the industry. Record-high project costs, decreasing and volatile oil prices, competition from low-cost alternatives, and global climate change are increasing the likelihood that Chevron’s high priced reserves will end up stuck in the ground while billions in shareholder capital is wasted.”

Read the shareholder resolution

As You Sow CEO Andrew Behar said: “While we don’t expect to see the same kind of vote results that were achieved with the climate disclosure resolutions at BP and Shell, we do think it’s important to ask the tough questions and educate the board and shareholders about the fact that Chevron is on an economically unsustainable path. Chevron has lost money in 9 of the last 10 quarters due to poor capital investment decisions. The bottom line here is that shareholders lack confidence in the company’s direction and we don’t think that we have a climate competent board capable of innovative thinking, therefore the capital is better spent as dividends than wasted by stranding more assets.”

Despite Chevron’s Legal Challenge, Shareholder Resolution on Economic Risks of Climate Change Going to Vote

SEC Rules Against Energy Giant, Allows As You Sow/Arjuna Capital Proposal to Proceed


Just weeks before Chevron’s annual meeting, the Securities and Exchange Commission (SEC) ruled in favor of nonprofit As You Sow and wealth manager Arjuna Capital/Baldwin Brothers in their effort to address concerns about the energy giant’s vulnerability to climate-related economic risks.

Read our shareholder resolution

The ruling comes after As You Sow and Arjuna Capital filed a shareholder resolution, with co-filer Zevin Asset Management, asking Chevron to distribute capital to shareholders in light of concerns about Chevron’s spending on high-cost, high-carbon projects, including Artic drilling, tar sands, and other ‘unconventional’ fossil fuels. Chevron challenged the resolution at the SEC to keep it off the shareholder ballot. The SEC rejected Chevron’s challenge, recognizing shareholders right to be heard on this important issue and clearing the path for a vote at Chevron’s annual meeting.

Read our full statement

New Proxy Resolution Urges ExxonMobil to Return Capital to Shareholders in the Face of Global Climate Change & Carbon Asset Risk

Arjuna Capital and As You Sow File Shareholder Proposal Asking ExxonMobil to Return Capital to Shareholders Rather than Invest in High-Cost High-Carbon Projects


In a first of its kind proposal, Shareholders Arjuna Capital/Baldwin Brothers Inc. and As You Sow seek increased dividends or share buybacks from ExxonMobil given structural challenges facing the industry — historically high capital expenditures, decreasing profitability, and global climate change. This represents the first shareholder proposal asking a company to return capital to shareholders in light of climate change risk.

Exxon Mobil wrote a report in response to Arjuna Capital and As You Sow’s shareholder proposal this spring on the potential for stranded assets associated with climate change. Exxon ignored major risk factors projected by the International Energy Agency (IEA) and Wall Street energy analysts regarding stranded carbon assets – i.e. that the company’s most-costly projects may become uneconomical in a low demand or low oil price environment.

The new shareholder resolution calls on Exxon Mobil (XOM) to protect investor value by “increasing the amount authorized for capital distributions to shareholders through dividends or share buy backs,” rather than invest in high-cost, high-carbon oil projects.

Read our full statement

Read our resolution


Activist investors who called a truce with Exxon Mobil Corp. (XOM) this year over climate change disclosures demanded the world’s biggest energy company give cash to shareholders rather than invest in costly new oilfields. Arjuna Capital and a group called As You Sow filed a shareholder proposal with Exxon that calls on the Irving, Texas-based company to shift cash bound for carbon-intensive oil projects into bigger dividend payouts and share buybacks.

– Exxon Investors Seek Dividend Boost in Lieu of New Fields

New Carbon Tracker Report Debunks ExxonMobil’s Denial of Carbon Asset Risks

Exxon underperforms vs. S&P 500 by 8% for past five years due to overspending on risky replenishment of reserves

The Carbon Tracker Initiative (CTI) has issued a report finding that ExxonMobil (XOM) – the largest U.S. energy company – is significantly underestimating the risks to its business model from investments in higher cost, higher carbon reserves; increasing national and subnational climate regulation; competition from renewables; and demand stagnation, among other factors. Click through to read our statement.

Shareholders: ExxonMobil Takes Crucial Step of Acknowledging Carbon Asset Risk … But More Is Needed

Shareholder Advocates Seek Scenario Planning for a Low Carbon Economy

In a much-anticipated report to shareholders today on stranded carbon asset risk, ExxonMobil expressed the view that there is limited basis for concern. Shareholder advocates Arjuna Capital and As You Sow – which withdrew a shareholder resolution when ExxonMobil agreed to release the report – expressed disappointment with aspects of the response, but noted that it is a historic first step forward, providing greater insight into how Exxon is approaching climate change risk and representing an end to the company’s previous refusal to acknowledge climate change issues.

Read Exxon’s report denying carbon asset risk

In its response, the company said it believed that any future capping of carbon-based fuels to the levels of a “low carbon scenario” is highly unlikely due to pressing social needs for energy. Exxon’s position stands in stark contrast to President Obama’s goal to reduce greenhouse gases by 80 percent by 2050 and acknowledgement by world governments that we cannot burn more than one-third of current proven carbon reserves if we are to prevent a greater than 2 degree rise in global temperature. Based on facts as we know them, the $20 trillion in reserves currently on the balance sheets of the 200 largest coal, oil, and gas companies are at risk of devaluation and stranding.

Landmark Agreement with Shareholders: ExxonMobil Agrees to Report on Climate Change & Carbon Asset Risk

Withdrawal of Shareholder Proposal Seeking Disclosure on Stranded Carbon Assets Leads to Agreement with Largest U.S. Oil and Gas Producer

In response to our 2014 shareholder resolution, ExxonMobil, the largest U.S. energy company, for the first time ever has agreed to publish a Carbon Asset Risk report on the Company website describing how it assesses the risk of stranded assets from climate change. The report will provide investors with greater transparency into how ExxonMobil plans for a future where market forces and climate regulation makes at least some portion of its carbon reserves unburnable.

As You Sow and co-filer Arjuna Capital have agreed to withdraw their shareholder resolution in exchange for ExxonMobil providing information to shareholders on the risks that stranded assets pose to the Company’s business model, how the company is planning for a carbon constrained world, how climate risks affect capital expenditure plans, and other related issues.

Read our statement

Exxon’s report will address:

  • How Exxon assesses the risk of a low carbon scenario, other than placing a price on carbon.
  • Why the Company, in assessing the economic viability of proved undeveloped and undeveloped reserves, fails to conduce a scenario analysis based on a scenario consistent with reducing GHG emissions 80% by 2050 to achieve the 2 degree goal. How the Company stress tests its capital investment opportunities.
  • How Exxon’s base case scenario tracks with the IPCC.
  • How Exxon plans for scenarios that diverge from the “Energy Outlook”. Whether or not the Company includes a factor of safety and how that factor is determined.
  • How the Company incorporates a low carbon assessment into capital allocation plans and the implications for capital expenditure plans.
  • Why the Company believes current investments in new reserves are not particularly exposed to the risk of stranded assets. How current capital expenditure is affected by any considerations the Company makes with regards to future short-to-long term risk of stranded assets. The probability/likelihood assigned to that risk.
  • Information for investors to analyze assets at risk in a low carbon scenario. A) The breakdown of the resource base by resource type and location, i.e. oil, gas, heavy oil, bitumen, conventional, deep-water, acid/sour gas, etc. B) Unit profitability by type of production.
  • How the Company assesses capital projects versus alternative uses such as buybacks and dividends.
  • The relative carbon intensity of owned assets using third party information on relative carbon intensities of sources.
  • The company’s production forecast based upon prices remaining flat and the CAPEX outlook for the next several years.


Coal, oil, and gas reserves that are claimed as assets on the balance sheets of the top 100 coal, oil, and gas companies contain over three times the total amount of carbon that scientists believe can be released without climate catastrophe. In the 2012 World Energy Outlook, the International Energy Agency states that “[n]o more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2 degree Celsius goal,” generally recognized as the level beyond which global warming will have dire ramifications.

If laws and regulations are adjusted to recognize this limitation, the vast majority of fossil fuel companies will be left with stranded assets in the form of unburnable reserves and underused infrastructure. Importantly for shareholders, the majority of such companies will be overvalued, presenting the risk of a “carbon bubble.” The valuation of these companies are the core of the Dow Jones and many other international financial indexes, so the impact of these stranded assets could ripple through national and international financial markets, just as the overvaluation of housing—or the housing bubble—did, with disastrous consequences.

As You Sow is working to promote transparency and reporting on this issue by filing shareholder resolutions with key fossil fuel companies. Our resolution asks companies to report plans to address global concerns regarding fossil fuels and their contribution to climate change, including an analysis of long- and short-term financial and operational risks to the company and society.

Further, the resolution asks companies to perform an analysis of various scenarios the company deems likely, or reasonably possible, in which a portion of its reserves or infrastructure become stranded due to carbon regulation, and to discuss the impact those scenarios would have on the company’s plans to invest resources in continuing to explore or further develop new coal or gas reserves.

This information will enable investors to analyze how companies are positioned to address climate change and carbon restrictions, providing valuable information for investors to make reasonable judgments about the benefits or risks associated with investing in these companies. After the credit and financial crises of 2008, it critical that investors are more attuned to the catastrophic effects of mispriced assets in the financial market.