December, 10 2020, 11:00pm EDT
WASHINGTON
Shareholder representative As You Sow recently filed resolutions at two of the largest integrated fossil fuel companies in the U.S. -- Exxon Mobil and Dow Inc. -- asking the companies to address the growing risks associated with investments in plastic and petrochemical infrastructure.
As You Sow's resolution with Exxon asks the company to address the potential for its petrochemical investments to become stranded due to trends including weakening demand growth for commodity plastics amidst a carbon- and plastic-constrained world, oversupply of plastic feedstocks, and rising opposition from civil society groups that have resulted in the delay of similar projects. As You Sow filed a similar resolution with Dow, noting the company's already large petrochemical presence in the Gulf Coast and its plans to expand.
"Investor concern is growing as both Exxon and Dow expand investments in plastics and petrochemicals," said Lila Holzman, Energy Program Manager of As You Sow. "These investments look increasingly risky in a world battered by climate impacts, plastic pollution, and stranded asset risk from overproduction and loss of social license. We are asking both Exxon and Dow how they will mitigate such risks."
Almost 90% of U.S. plastic capacity is concentrated along the Gulf Coast in areas that increasingly suffer from climate-induced sea level rise, storm surge, and severe storms. Petrochemical operations routinely emit hazardous pollutants including benzene, VOCs, and sulfur dioxide. Unplanned emissions occur before, during, and after extreme weather events -- posing serious health risks to surrounding communities. The implications of these risks have been seen in recent storms; during Hurricanes Harvey, Laura, and Delta, plants were flooded and forced to shut down, releasing unpermitted, unsafe levels of pollutants into the air and water.
"In spite of the risks, companies like Dow and Exxon continue to build dangerous infrastructure in zones battered by climate-strengthened storms," stated Holzman. "Both must provide assurance that nearby communities will be protected, as physical climate risks grow."
A similar As You Sow resolution filed with Exxon in 2019 and 2020 received strong support from shareholders, but no response from the company. In contrast, in 2020, Chevron Phillips Chemical Company (CPChem) responded to majority or near-majority votes at parent companies Phillips 66 and Chevron by issuing a report providing new information on its management of physical climate risks. Investors continue to seek enhancements to such reporting, as concern grows regarding the environmental impacts of plastic manufacturing, use, and disposal.
For more information on As You Sow's work on climate change, click here.
As You Sow is the nation's non-profit leader in shareholder advocacy. Founded in 1992, we harness shareholder power to create lasting change that benefits people, planet, and profit. Our mission is to promote environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies.
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