Imperial Oil Ltd. shareholders have voted against environmental, social and governance-related proposals backed by the Bâtirente and the British Columbia Investment Management Corp. during the company’s annual general meeting.
The Bâtirente’s motion called on Imperial Oil to adopt direct and indirect greenhouse gas emissions reduction targets for 2030. If passed, the proposal would have obliged Imperial Oil’s board to unveil interim targets in 2024. “For companies to demonstrate credible climate ambition, they must align with the goal of holding global temperature rise to 1.5°C and set targets to halve emissions by 2030,” wrote the Bâtirente in a statement in support of its proposal.
In a statement outlining its opposition, the Imperial Oil board said the government may implement legislation requiring corporations to adopt medium-term emissions’ reductions goals superseding any internal goals it chose to adopt. “Imperial believes it would be imprudent to release additional company-specific, medium-term goals that are potentially misaligned with the anticipated government of Canada cap currently under development.”
The board’s statement highlighted Imperial’s existing climate-related commitments, including its goal of lowering the emissions intensity of its oil sands operations by 10 per cent of its 2016 baseline by 2023 and 30 per cent by 2030. It also noted it had co-founded an organization called the Oil Sands Pathways to Net Zero Alliance. “This ground-breaking approach aims to reduce oil sands GHG emissions by implementing new technology such as CCS, solvent-based production, renewable fuels, low-carbon intensity hydrogen and small modular nuclear reactors.”
The proposal garnered the support of 19,510,026 voting shares, or 15.99 per cent of the total number of publicly traded voting share ballots. It was opposed by 102,495,918 publicly traded voting shares, as well as by ExxonMobil Corp., which controls 505,524,209 privately held shares.
In 2021, the Bâtirente sponsored a shareholder motion requiring Imperial to adopt targets to achieve net-zero carbon emissions by 2050. While it received the backing of 86 per cent of institutional investors, the motion was blocked by ExxonMobil. Despite the failure of the proposal, Imperial said it would aim to eliminate the carbon footprint of its industrial activities in Alberta by 2050 later in the year.
Read: Imperial Oil shareholders defeat Bâtirente’s net-zero emissions motion
The BCI’s proposal called for the Imperial board to provide an audited report estimating the quantitative impacts of eliminating the carbon footprint of its asset retirement obligations by 2050. “Ideally, corporate disclosures would include discount rates, asset types, the range of potential settlement dates and probabilities associated with those dates, given [the potentially accelerated] timing of the energy transition,” it wrote in a statement to shareholders.
“To calculate asset retirement obligations as per the resolution presented would result in an arbitrary retirement obligation that would not reflect a thoughtful, fact-based approach to the energy transition, but instead, a very narrow and specific hypothetical view of the future,” wrote the board in a statement urging shareholders to oppose the proposal. “Based on our performance to date, our company goal to pursue net zero by 2050, the flexibility and integration we have with our asset base and that retirement obligations that are estimable and probable are included in the company’s audited financial statements, we do not view that a commitment consistent with this motion is necessary at this time.”
The BCI’s proposal received the support of 19.89 per cent of publicly held voting shares, with 23,051,605 ballots cast in favour. It was opposed by ballots from 98,954,339 publicly traded shares as well as by all those held by ExxonMobil.
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