The UUA has long been a leader in shareholder advocacy on environmental issues—a role that was affirmed by the 2014 business resolution on fossil fuel divestment. Working with other active shareholders and advocates, the UUA is helping to uncover deceptive and non-science based advocacy by fossil fuel companies. Additionally, the UUA’s past efforts have set the stage for the new methane regulations announced by the Environmental Protection Agency. The new methane rule was opposed by fossil fuel companies which claimed that regulation is burdensome. However, we believe the rule is an important stride towards reining in emissions of this potent greenhouse gas. The rule also rewards companies that have previously been proactive on reducing their methane emissions.
Meanwhile, the UUA SRIC instigated a new advocacy strategy this proxy season. Typically, energy executives have variable compensation linked to discovery of new reserves, regardless of the company’s ability to exploit those reserves in a cost-effective manner. The UUA SRIC is asking energy companies, starting with ConocoPhillips, to link executive compensation to the economic viability of new reserves, creating a disincentive for executives to explore for new fossil fuel reserves that cannot be produced profitably. In the context of low oil prices and new policy commitments made by world leaders in Paris last December, this shift in executive compensation could very effectively decrease the amount of exploration for fossil fuels, effectively leaving them in the ground. The resolution filed by the UUA and presented at the ConocoPhillips Annual Meeting on 5/10/2016 obtained approval from 6.9% of shareholders.This level of support meets the threshold for resubmission in 2017, and will enable the UUA to continue to engage with ConocoPhillips while bringing aboard more coalition partners that are committed to pushing the energy companies swiftly toward new business strategies that are compatible with a carbon-constrained world.