NEW YORK  - Shareholder climate activists have finally notched up a victory against U.S. fossil-fuel companies. Some 54% of Phillips 66’s  owners backed a climate-related resolution at the company’s annual meeting on Wednesday, the company confirmed on Friday. After numerous failed attempts to get American energy firms to take action on global warming, the winning strategy turned out to be: think smaller.

Activists have had some success persuading European rivals like BP, Shell and Total to come up with ways to reduce their impact on global warming, but have had less luck across the pond. Phillips 66, formed when ConocoPhillips spun off its downstream and midstream assets in 2012, is not as high profile as its former parent or, say, Exxon Mobil. But it is one of the top 100 or so greenhouse-gas emitters that investor coalitions like Climate Action 100+ have on their list of targets.

The resolution is a small ask. It entreats Phillips 66 to report on the health risks of expanding its petrochemical business in areas affected by climate change. It comes as calls for big emissions-reduction targets have had little success in the United States. Exxon persuaded the Securities and Exchange Commission to exclude one such resolution from being on the ballot at its 2020 and 2019 annual meetings. Moreover, the petitioners themselves were small investors – in this case a group called As You Sow, rather than any big institutional investor.

The modest scope doesn’t make it any less important. Floods, storms and rising sea levels are already creating dramatic disruptions – think of the Texas hurricanes of 2018 – which means it’s easy to argue that Phillips 66 faces financial and pollutive effects that are important to shareholders. What’s more, picking on petrochemicals also taps into concerns about plastics, which has in many instances become a more hot-button issue than either climate or water security in recent years.

More investors are paying attention, too. BlackRock, which upped its commitment to climate-related causes earlier this year, is one of the top-three holders of Phillips 66 stock with 5%. It holds a similar percentage and rank at both Exxon and Chevron, which face similar votes at the end of this month. Granted, this vote doesn’t actually compel the company to act. But it’s a brave executive team who tries to hold back the rising tide.

 

CONTEXT NEWS

- A majority of Phillips 66 shareholders backed a resolution asking the U.S. energy company to report “on the public health risks of expanding petrochemical operations in areas increasingly prone to climate change-induced storms, flooding, and sea level rise.”

- A total of 54% of investors supported the motion at its annual shareholder meeting on May 6, the company confirmed in a filing two days later.

- As You Sow, which put forward the resolution, has filed similar motions for the shareholder meetings of Exxon Mobil and Chevron, both of which take place on May 27.

 

(Editing by John Foley and Amanda Gomez) ((antony.currie@thomsonreuters.com; Reuters Messaging: antony.currie.thomsonreuters.com@reuters.net))