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Rune Woldsnes
Australian surfer Heath Joske got to speak at Equinor’s annual general meeting
It is not every day that a surfer and environmental campaigner addresses the annual general meeting of one of the world’s biggest oil companies.
But that is what happened earlier this year, when Australian Heath Joske spoke to shareholders of the Norwegian firm Equinor at its AGM in the city of Stavanger.
He implored them to back a resolution, brought by a small group of investors, to stop Equinor’s plans to drill for oil in the Great Australian Bight – a stretch of coastline in South Australia said to be one of the most unspoiled marine environments in the world.
Oil-and-gas extraction posed huge risks to local wildlife and the climate, says Mr Joske, who lives in the region.
“We see your plans to drill in the Bight as a direct threat to our culture and identity,” he told the meeting.
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Brad Leue
The Bight is one of the most unspoiled marine environments in the world
It is just the latest example of how so-called shareholder activism is being used to try to pressure big energy firms to adopt greener policies.
Mr Joske was speaking on behalf of an alliance of environmental groups – led by Greenpeace Norway and the World Wildlife Fund – that had purchased enough shares in Equinor to be able to bring their resolution to the AGM.
The motion called on the company to stop oil-and-gas exploration and production in “frontier” and “pristine” environments that would include the Bight.
While it did not secure enough shareholder votes to pass, it did generate publicity for the campaign, which aims to convince Australia’s regulator to reject Equinor’s proposals when it announces its decision later in November.
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Shell has faced pressure to do more to stop climate change
“Shareholder activism, and the dialogue that it produces between shareholders and a company’s board, is a critical element of good corporate governance,” says Brynn O’Brien, the head of the Australasian Centre for Corporate Responsibility (ACCR).
The ACCR backed the Equinor motion in May, and has filed others like it against firms such as BHP Billiton and Rio Tinto.
Ms O’Brien adds: “Even though resolutions that are not supported by boards rarely pass, they quite often produce change in terms of company commitments to increased action to reduce emissions.”
They can also convince firms to stop lobbying that is “inconsistent” with the goals of the 2015 Paris Agreement, which aims to reduce the risks and impacts of climate change globally.
One of the most successful activist groups has been Climate Action 100+, a global network of institutional investors that targets the world’s 100 largest corporate greenhouse gas emitters.
Its 370 members, which have $35tn (£27tn) of assets under management, include well-known names such as Aberdeen Standard, the Church of England Pensions Board and HSBC Global Asset Management.
In March, the group, working with others, forced the oil giant Shell to make a legally binding commitment to use a broader definition of greenhouse gas emissions in its carbon-reduction targets.
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Commenting on the resolution at the time, Shell said it acknowledged and agreed with the “importance attached by its investors to the issue of climate change”. It also said the company’s future success was “contingent on its ability to effectively navigate the risks and the opportunities presented by climate change”.
In another example, at BP’s AGM in Aberdeen in May, Climate 100+ secured overwhelming approval for a motion that called on the oil giant to document its efforts to meet Paris Agreement goals in quarterly reports.
As shareholder resolutions are almost always non-binding, BP could have chosen to ignore it. But the oil firm had held discussions with Climate 100+ before its AGM and agreed to support the proposal.
“Climate 100+ have been really interesting to watch because they employ an engagement-first model as opposed to a shareholder proposal-first model,” says Courteney Keatinge, head of environment at shareholder advisory Glass Lewis.
“It has worked with the targeted companies, trying to understand their positions and priorities, prior to submitting a shareholder proposal, which is often seen as a more combative move by companies.”
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BP has agreed to modify its policies following pressure from campaigners
Despite such successes, major greenhouse gas emitters continue to extract and burn fossil fuels, and Ms Keatinge suggests there is only so much shareholder activists can do.
“Without strong regulatory pressure and market incentive, companies are going to continue to take oil and coal out of the ground at their discretion.
“There’s a market for energy and if those needs are not being met, companies are going to find a way to meet them.”
Despite pressure from shareholders and campaigners, Equinor still hopes to start drilling in the Bight. It argues it has a safe drilling record and that the project would benefit both its shareholders and the people of South Australia.
“Production from existing oil and gas fields is declining, and there is a need for new supply to meet the future demand for energy,” says spokesman Erik Haaland.
“Even in recognised scenarios for the future that are aligned with the goals of the Paris Agreement, there is considerable need for oil and gas over the next decades.”
‘Costs rising’
However, Ms O’Brien believes that the company could end up facing legal action if its plans for the Bight go ahead. That’s because new drilling projects are highly expensive, while the oil market has been volatile recently.
“The break-even point – how much a barrel of oil would have to be worth to justify the capital expenditure on the infrastructure that goes along with a frontier drilling operation – is rapidly rising,” she says.
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Heath Joske says drilling in the Bight is “a threat to our culture and identity”
“If shareholders – including the Norwegian people [Equinor is 67% state-owned] private investors and other states – lose money, they may be able to sue for losses if these decisions are found in the circumstances to have been unreasonable.”
Australia’s National Offshore Petroleum Safety and Environmental Management Authority will announce its decision on Equinor’s plans for the Bight on 14 November. It has rejected a similar application from BP in the past.
From his home in South Australia, Mr Joske tells the BBC that if drilling goes ahead then community opposition will intensify.
He also believes that the shareholder resolutions brought at Equinor’s May AGM were worthwhile, even though the firm has not changed course.
“Nothing’s changed here. We’re just waiting on the decision right now and if they tick it off things will escalate, opposition-wise, for sure.”
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