Devon Energy: Climate Change Risk Reporting
WHEREAS: The Intergovernmental Panel on Climate Change instructs that global emissions of carbon dioxide must reach "net zero" by 2050 to avoid catastrophic impacts associated with a warming climate. If warming is kept to 1.5 degrees Celsius versus 2 degrees, studies point to an estimated savings of $20 trillion to the global economy by 2100.
The energy industry is one of the largest contributors to climate change, and Devon’s emissions are significant. Devon’s future investment choices matter. Every dollar invested in fossil fuel resources that are not aligned with Paris goals increases risk to the economy and investor portfolios.
Investors recognize this growing risk. Norway’s sovereign wealth fund announced divestment from oil and gas exploration and production companies. The European Investment Bank and the World Bank announced they will cease funding fossil fuel projects. Other investors are seeking Paris Aligned investments from large emitters. Criteria for alignment include: disclosure of Scope 1 through 3 emissions; adoption of a net zero by 2050 or equivalent target; a business plan for becoming Paris Aligned; and a declining carbon footprint.
A growing number of oil and gas companies are taking steps to align with Paris goals. Shell announced Scope 3 greenhouse gas intensity reduction ambitions and has decreased reserves life below the industry standard of 10 years. Total has invested substantially in renewable energy and storage. Equinor rebranded itself from ‘StatOil’ and is diversifying into renewables. Orsted, previously a Danish oil and gas company, sold its fossil fuel portfolio. Repsol announced a net zero by 2050 target, writing down over $5 billion of unaligned assets.
In contrast, Devon does not report Scope 3 product emissions. Its methane reduction intensity target is short term, limited to operated assets, and does not address Scope 3 product emissions. Devon has no long term business plan to align operations with Paris 1.5 degree goals, instead its direct greenhouse gas emissions and greenhouse gas intensity increased each year from 2016-2018.
Investors seek additional information from Devon to address these concerns.
BE IT RESOLVED: Shareholders request that Devon Energy issue a report (at reasonable cost, omitting proprietary information) describing if, and how, it plans to reduce its total contribution to climate change and align its operations and investments with the Paris Agreement’s goal of maintaining global temperature rise well below 2 degrees Celsius.
SUPPORTING STATEMENT: Shareholders seek information, at board and management discretion, on the relative benefits and drawbacks of adopting the following actions:
Disclosing Scope 3 product emissions;
Adopting greenhouse gas emission reduction targets for the company's full carbon footprint, inclusive of product-related emissions;
Reducing non-Paris aligned capital investments in oil and/or gas resource development;
Investing at scale in low carbon energy or other greenhouse gas emission reduction measures.
Resolution Details
Company: Devon Energy Corporation
Lead Filers:
As You Sow
Year: 2020
Filing Date:
December 2019
Initiative(s): Climate Change
Status: Blocked by the Company at SEC