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Report on KAIROS’ attendance at the Imperial Oil Ltd.
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Canadian churches were at Imperial Oil’s annual meeting of shareholders for the fifth consecutive year, calling on the company to take climate change seriously. This year, KAIROS coordinated the filing of a shareholder proposal on climate change risk which was circulated by the company. The filers of this proposal were The Presbyterian Church in Canada, Fonds Elisabeth-Bergeron (Soeurs de St. Joseph de Saint-Hyacinthe), and the Congregation of the Sisters of Saint Anne.
KAIROS worked closely with other socially responsible investment organizations in drafting the proposal. Given the new rules under the Canada Business Corporations Act, the deadline for filing proposals with corporations occurs much earlier and, in this instance, the deadline was just prior to Christmas. The Presbyterian Church in Canada, the Congregation of the Sister of Saint Anne and the Fonds Elizabeth-Bergeron all submitted the proposal to the company within the proper timeframe. While the company did, in one instance, exercise its right to request proof of ownership of shares, the filers complied with this request. Once it became clear that Imperial Oil would be circulating the proposal within its proxy materials, it was mutually felt that a dialogue would be of some benefit.
A meeting with Imperial Oil management occurred on April 2, almost two weeks prior to the annual meeting of shareholders.
At the annual meeting (held on April 22), once the general business had been transacted, the shareholder proposal was moved by Stephen Allen (Associate Secretary, Justice Ministries – Life and Mission Agency, The Presbyterian Church in Canada), speaking on the proxy of The Presbyterian Church in Canada, and seconded by Nancy Palardy (Program Coordinator, Corporate Issues – KAIROS), speaking on the proxy of the Congregation of the Sisters of Saint Anne. Once the proposal was introduced, both Stephen and Nancy made statements from the floor. The CEO, Mr. T.J. Hearn, then made some comments following these statements. In general he focused on the greenhouse emissions intensity of the company (ie. how much greenhouse gas is emitted per unit of production) rather than overall emissions. He continued by saying that the production of such a report, as requested within the shareholder proposal, would be difficult given that the federal government has not yet disclosed its plan to reduce greenhouse gas emissions. He indicated that the company felt that the uncertainties were too great and that it would be difficult to quantify what the risks might be.
Following the comments made by the CEO, Dr.David Hallman (Program Officer, Energy and Environment, The United Church of Canada and speaking on the proxy of the Fonds Elizabeth-Bergeron) noted that it was Earth Day and yet the company had made no reference to climate change in their presentation until management began discussing the company’s response to the shareholder resolution. David raised questions about the company’s capacity to respond to both the risks and opportunities presented by climate change. Following David’s intervention other shareholders spoke from the microphone in support of the shareholder proposal. In particular one gentleman, who is an analyst for the oil and gas sector, stated that he explicitly came to the meeting to support the resolution and that he was disappointed by the position adopted by the Board. He stated that management is ‘blind’ to the realities of climate change and that he is disturbed by some of the reports which are now being released on the risk issue. A subsequent speaker indicated that Imperial Oil is regarded as a major player in the industry, and that he would like to see the company act as a leader in the energy, rather than petroleum, industry. In particular, he would like to see the company focus more on developing energy alternatives and renewable energies.
The results of the vote were announced at the meeting itself. Following on a request made from the floor by Bill Davis (former coordinator of the Taskforce on the Churches and Corporate Responsibility, and an Imperial Oil proxy holder), the results were provided both as a total out of 100%, and as a total of the minority votes (ie. the 30% not held by ExxonMobil of the United States, but rather held by individuals and institutional shareholders). The KAIROS representatives were very pleased with the results. In looking at the results, it must be noted that ExxonMobil (which holds almost 70% of the outstanding Imperial Oil shares) voted against the proposal. Of the remaining individual and institutional investors, however, 28.67% voted in support of the resolution. This is a significant level of support for an environmental proposal of this nature. It is clear from the level of support that several of the large pension funds (including the Canada Pension Plan) must have voted in favour of the proposal – a very heartening fact.
Media coverage of the shareholder proposal was significant due to the fact that this was the first time that a shareholder proposal on climate change had been successfully filed with a Canadian company. In the United States, several of the state pension funds have identified this as a significant issue and are planning to hold a conference in the fall on climate change risk.
Click here to see the full report
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