Devon Energy: Disclose Paris Compliant Emissions Targets
BE IT RESOLVED: Shareholders request that the Devon Board of Directors, in annual reporting from 2020, include disclosure of short-, medium- and long-term greenhouse gas targets aligned with the greenhouse gas reduction goals established by the Paris Climate Agreement to keep the increase in global average temperature to well below 2°C and to pursue efforts to limit the increase to 1.5°C. This reporting should cover both the corporation’s operations and products, omit proprietary information, and be prepared at reasonable cost.
WHEREAS: It is widely accepted that a transition to a low carbon economy - driven by advances in technology and government policy aligned with the Paris Agreement - is under way. As the use of zero- and low-carbon technology increases due to technical breakthroughs and decreasing costs, and as governments take steps to limit greenhouse gas emissions, fossil fuel companies face enhanced risk. These trends could limit returns to Devon’s investors by increasing the company’s operating costs or by reducing demand for its products.
The Grantham Research Institute on Climate Change and the Environment has identified at least 1,512 climate change laws. Growing recognition of the risks from climate change will result in increasing numbers of, stringency of, and support for these laws.
In addition, Devon’s greenhouse gas emissions contribute to climate change impacts, presenting systemic portfolio risks to investors. A warming climate is associated with supply chain dislocations, reduced resource availability, lost production, commodity price volatility, infrastructure damage, crop loss, energy disruptions, political instability, and reduced worker efficiency, among others.
Disclosing targets is an important means of assuring investors of the management of risks associated with climate change and that the Company is decreasing the full range of company emissions in line with Paris goals. Devon states that “reducing GHG emissions intensity is one of the guiding principles” of its Environmental Health and Safety philosophy. It has adopted greenhouse gas reduction targets in certain of its Canadian operations, where required by law. The company has not adopted greenhouse gas emission reduction targets in its U.S. operations or taken actions beyond reducing its operational emissions. In fact, its companywide GHG emissions intensity has increased from 2016 to 2017. In contrast, other oil & gas companies, including Total and Shell, have disclosed much longer term ambitions, including for emissions resulting from use of their products. Investors are seeking enhanced disclosure of targets and other measures demonstrating company alignment with the Paris Agreement.
To ensure that Devon is adequately prepared to be successful into the future for its shareholders and other stakeholders we believe it is essential for the company to identify and disclose targets that are aligned with the goals of the Paris Agreement.