Hess Corporation: Paris Compliant Business Plan
BE IT RESOLVED: Shareholders request that Hess issue a report (at reasonable cost, omitting proprietary information) on how it can reduce its carbon footprint in alignment with greenhouse gas reductions necessary to achieve the Paris Agreement’s goal of maintaining global warming well below 2 degrees Celsius.
SUPPORTING STATEMENT: In the report shareholders seek information, among other issues at board and management discretion, on the relative benefits and drawbacks of transitioning its operations and investments through the following actions:
Investing in low carbon energy resources
Reducing capital investments in oil and/ or gas resource development that is inconsistent with a well below 2 degree pathway
Otherwise diversifying its operations to reduce the company’s carbon footprint (from exploration, extraction, operations, and product sales).
WHEREAS: The Intergovernmental Panel on Climate Change released a report finding that "rapid, far-reaching” changes are necessary in the next decade to avoid disastrous levels of global warming. Specifically, it instructs that net emissions of carbon dioxide must fall 45 percent by 2030 and reach "net zero" by 2050 to maintain warming below 1.5 degrees Celsius.
Climate change impacts present systemic portfolio risks to investors. A warming climate is associated with supply chain dislocations, reduced resource availability, lost production, commodity price volatility, infrastructure damage, energy disruptions, among others.
The Fourth National Climate Assessment report finds that with continued growth in greenhouse gas emissions, “annual losses in some U.S. economic sectors are projected to reach hundreds of billions of dollars by 2100 —more than the current gross domestic product of many U.S. states.” Other studies estimate global losses at over 30 trillion dollars.
The fossil fuel industry is one of the most significant contributors to climate change; Hess is among the top 100 largest industrial contributors. Hess’ investment choices matter. Every dollar Hess invests in fossil fuel resources increases risk to the global economy and investors’ portfolios. Yet, Hess recently announced it is increasing its capital expenditure for oil exploration up to 2.9 billion dollars, with a projected resulting increase in production.
A number of peer oil and gas companies have announced policies to reduce their climate footprint in support of Paris goals. Shell announced scope 3 greenhouse gas intensity reduction ambitions. Total has invested substantially in solar energy and is reducing the carbon intensity of its energy products. Equinor rebranded itself from ‘StatOil’ and is diversifying into renewable energy development. Orsted, previously a Danish oil and gas company, sold its oil and gas portfolio.
In contrast, Hess is planning reductions only to its own operational emissions, including reduced flaring and methane reductions; operational emissions however account for less than 20 percent of the Company’s climate footprint. Hess has not adopted Paris-aligned targets or actions to reduce the full climate impact of its investments in fossil fuel energy sources, including zero planned reductions in its scope 3 emissions.