Chevron Phillips Publishes Climate Report in Response to Investor Concerns

Chevron Phillips Chemical Company (CPChem), owned jointly by Phillips 66 and Chevron, released its "Managing Climate Change Risks" report Thursday, describing how the company is addressing growing threats from climate change-induced storms, flooding, and sea level rise. The report responds to shareholder proposals filed last year by As You Sow with Phillips 66 and Chevron requesting enhanced disclosure on the risks of hazardous pollutant releases from its petrochemical plants during extreme weather events. The first-time proposals achieved strong investor support -- a majority vote of 54.7% at Phillips 66 and 46% at Chevron.

Petrochemical facilities such as ethane crackers and polyethylene processing plants produce hazardous pollutants including benzene (a known carcinogen), Volatile Organic Compounds, and sulfur dioxide. These operations can become inundated and cause severe chemical release risks during extreme weather events. Flooding from recent storms like Harvey, Laura, and Delta caused CPChem plant shutdowns and the release of unpermitted, unsafe levels of pollutants into air and water.

Civil society groups have opposed the expansion of petrochemical facilities in their communities due to the likelihood of increased harm to health and livelihoods -- impacts disproportionately felt by low income communities and communities of color. Local opposition in the region is growing; the Army Corps of Engineers recently backtracked on a permit for Formosa Plastic's planned petrochemical complex after environmental and community groups mobilized in protest.

A recent report noted that assumptions regarding demand growth for plastics are likely overestimated, as the globe combats the climate crisis and ocean plastic pollution. Petrochemical projects are already losing appeal and previous planned investments are stalling -- PTT Global Chemical Plc recently paused a new, massive U.S. plant as the poor economics of the plant was demonstrated.

Lila Holzman, Energy Program Manager of As You Sow, made the following statement:

"CPChem's new report marks an important first step in responding to investor concern and provides some helpful information on how the company views physical climate risk. However, the new disclosure lacks important information including what assumptions it uses to evaluate future climate and storm risk and which facilities remain at risk. Furthermore, while CPChem acknowledges certain concrete steps it has taken to protect its assets, it does not discuss whether community risks from weather-related upsets and disruptions will continue to exceed permitted levels.

"As awareness grows about the plastic industry's destructive impacts, demand for the sector is unlikely to live up to its grand expectations. Investors must continue to carefully scrutinize new investment in petrochemical assets -- especially in at-risk regions like the Gulf Coast."

To learn more about As You Sow's work on climate change, click here.