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Trump’s SEC Blocks Shareholder Climate Resolution at Oil Company’s Request

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Trump’s SEC Blocks Shareholder Climate Resolution at Oil Company’s Request
EOG Resources Moczygemba Unit in Karnes County, TX. Daniel Olinick / Flickr

The Securities and Exchange Commission (SEC) has blocked a shareholder resolution to set greenhouse gas-emissions targets, setting a troubling precedent for shareholders who want to use their collective power to fight climate change, Axios reported Monday.

The investment firm Trillium Asset Management had intended to propose a resolution at an annual shareholders' meeting this spring calling on EOG Resources, the largest oil-producer in Texas, to set dates for reducing greenhouse gas emissions. But EOG complained to the SEC in December, asking the government agency to bar the resolution from a vote on the grounds that it would "micro-manage" the company.


The SEC ruled in EOG's favor in February, and rejected an appeal from Trillium in March, marking the first time that the SEC has ruled to block an emissions-related proposal for non-technical reasons.

"What the SEC has done here really feels like interfering with the marketplace, substituting their judgment for what shareholders and investors already think and do," Trillium shareholder-advocacy director Jonas Kron told Axios.

Trillium is far from the first investment group to use a similar proposal as an attempt to push fossil-fuel companies to reduce greenhouse-gas emissions. Axios cited data from the Sustainable Investments Institute saying that 130 such resolutions had been proposed since 2010.

According to Adam Kanzer of Domini Impact Investments, this decision is likely not a part of the larger Trump administration attack on climate action, but rather part of a business-led push to reduce shareholder proposals generally. A month before EOG complained, the SEC issued a legal guidance that seemed to broaden the definition of "micro-management," and the SEC rejected other moves by companies to block climate-related shareholder proposals when those complaints did not use the "micro-management' argument.

However, if the EOG decision is part of a shift in SEC policy, it could still have a negative impact on the efforts of shareholders to push companies on climate change.

"If the SEC is shifting its view on what micromanagement means, it has implications for almost any proposal you file, from human rights to the environment," Kanzer told Axios.

President Donald Trump's appointee for SEC chairman, Jay Clayton, has not expressed the same outright hostility to climate science as other influential members of the administration. Before heading the SEC, Clayton worked at a law firm that encouraged its fossil-fuel industry clients to disclose climate-related risks to investors in compliance with a 2010 SEC directive, The International Business Times reported.

The International Business Times cited concerns that the Trump administration might move to overturn that directive, which issued guidelines for how publicly traded companies should report the potential impacts of climate change on their businesses. However, a new report on the requirement publicized by the Government Accountability Office Monday said that the SEC had no plans to alter the directive in any way.

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