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Climate change: Active engagement with Chevron

Engagement with investee companies is crucial to understanding and influencing their net zero trajectories.

Published on 23/05/23.

Net Zero emissions commitment

As a founding member of the NZAMI (Net Zero Asset Managers Initiative), we have committed to reaching net zero emissions by 2050 or sooner across all assets under management.

While this requires optimal allocation of capital towards green investments, at AXA IM, we consider stewardship as the bedrock of responsible investing, to support real-world decarbonisation, in line with the Net Zero methodology we are using to implement our commitment for corporate exposure.

Our engagement strategy

Engagement with investee companies is crucial to understanding and influencing their net zero trajectories. This logically makes climate change one of the central pillars of our engagement strategy, representing 28% of our engagement activity in 2022.

When engaging with companies, it is crucial to understand the specific journey each issuer is in, how they will progressively transition their activities, and the timeframe they are setting themselves in that perspective.

Our engagement policy

In line with our engagement policy, at the beginning of each engagement, we define clear objectives with the issuers, and a corresponding timeframe to allow them to achieve those, which may lead us to using escalation techniques when progress is too slow or when the level of responsiveness is not satisfying.

For issuers which do not take climate change seriously, which we consider to be “climate laggards”, we consider it our role to adopt a no-compromise approach, using all possible escalation tools at our disposal.

Stewardship and Engagement

Our engagement to drive action and create meaningful impact.

Download the report

2023 annual general meeting: co-filing a resolution

The detail

To push Chevron to further enhance its energy transition ambition, we made the decision to co-file, together with a group of investors, the climate resolution that ‘Follow This’ will be submitting at the company’s 2023 annual general meeting (AGM).

The resolution is focusing on setting medium-term Scope 3 emission reduction targets. In our view, integrating Scope 3 emissions in its transition plan would contribute to raising the level of ambition in Chevron’s carbon intensity reduction targets. Although it is not part of this resolution, we also believe Chevron should expand its scope 1 & 2 net zero goal to all its operations.

Moreover, ahead of the 2023 AGM, we intend to cast our votes1 :

  • against the shareholder resolution requesting to rescind the Scope 3 GHG reduction proposal submitted by ‘Follow This’ at the 2021 AGM, which would lead to a significant step backward,
  • in support of the shareholder resolution on transferred emissions, while signalling our belief that a similar logic should also apply to material acquisitions,
  • against the re-election of the Public Policy and Sustainability Committee Chair, as a way to push the Board to strengthen the level of their ambition when setting the company’s climate strategy.

Post-AGM results & learnings  (update on 15/06/23)

The Scope 3-related proposal that we co-filed at Chevron’s 2023 AGM recorded 9.6% of votes in favour, a support level which we consider low. However, we are comforted by the consensus from shareholders which massively (with 98.7% of votes) opposed the shareholder proposal requesting to rescind the Scope 3-related proposal (that was approved at the 2021 AGM). Moreover, although re-elected with a high level of support (92.4% of support), we note that the Public Policy and Sustainability Committee Chair recorded the highest level of opposition among board members up for re-election.

Read more below on the full account of our active engagement with Chevron.

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The investee company: Chevron

Chevron - an American multinational energy corporation headquartered in California - is one of the world’s largest oil and gas integrated companies, with activities spanning the entire value chain, from refining to chemicals and distribution.

As one of the world’s largest oil and gas integrated companies, Chevron is part of our climate-related engagement focus list. We have observed a reluctance to commit to net zero for its downstream activities, and a lack of ambition in its intensity emission reduction targets for energy sales, which we think sets the company behind its main peers.  

Indeed, while all its peers have goals to achieve net zero by 2050 for their scope 1 and 2 operations and for their entire activities, Chevron is limiting this goal to its upstream business, excluding all downstream operations which have higher absolute emissions.

Chevron is yet to take scope 3 emissions into account, and as a result its targets to reduce emission intensity of its energy sales between 2016-28 are not as ambitious as other companies in the industry who are factoring scope 3 into their plans. All Chevron’s European peers have a net zero by 2050 ambition for their scope 3 and intermediary targets.

Our engagement approach

As we consider these ambitions to be insufficient, we have used several escalation techniques since 2021, first by supporting a shareholder proposal submitted by Dutch campaign group ‘Follow This’ at the 2021 annual general meeting (AGM), requesting the Company to set medium- and long-term Scope 3 emission reduction targets. The proposal received the support of 60.7% of votes cast, highlighting the fact that our concerns on the lack of ambition of Chevron’s transition strategy were shared by a majority of investors. In response to the proposal, the company implemented a Portfolio Carbon Intensity (PCI) reporting framework, but still considered that setting Scope 3 emission reduction targets would clash with its business strategy, which aims to decrease carbon intensity while increasing oil and gas production.

In light of what we considered an unsatisfactory response to a wide shareholder demand, we decided to further escalate our concerns and voted against the re-election of the board Chair and members of the Sustainability Committee at the 2022 AGM.

Further escalation

Although discussions have taken place with the company’s sustainability teams, and notable progress has occurred (including the publication, last October, of a methane report), we believe that Chevron’s evolution in its climate strategy does not match the pace of the climate urgency.

Therefore, in order to push Chevron to further enhance its energy transition ambition, we made the decision to co-file, together with a group of investors, the climate resolution that ‘Follow This’ will be submitting at the company’s 2023 AGM.


Highlights and data

In 2022, we have made 596 commitments to companies, including 480 from of committed issuers and governance was our key theme of discussion, with 24% of cases covering corporate governance matters.

Read more about our engagements

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