What’s happening? Chevron’s shareholders have voted in support of a Follow This proposal for the company to reduce its Scope 3 emissions – i.e. those that come from the burning of its products. The resolution received majority support from investors despite Chevron’s board urging shareholders to reject it. (Bloomberg)

Why does this matter? The Chevron news is just one part of what was a terrible week for Big Oil. Alongside this outcome at the California-based oil major’s AGM, another activist investor, Engine No.1, managed to put two of its candidates on the board of ExxonMobil to push the company to take stronger action on climate change. Even more dramatically, a Dutch court also told Shell its emissions-reduction plans were not good enough, and ordered it to cut CO2 faster to protect future human rights.

The two shareholder votes at Chevron and Exxon demonstrate the growing influence of investors in determining company climate policy, and Follow This – a group of green shareholders who seek to change the behaviour of oil companies – has previous form in this regard.

Making individuals count – Since its inception, Follow This has proposed shareholder resolutions at the annual meetings of Shell, bp, Equinor and Total. It believes the only way to fundamentally change oil majors’ behaviour is via investor pressure – by making oil companies realise ignoring climate risks also represents a financial risk.  The organisation was founded by Mark Val Baal, who like most felt powerless about climate change because as an individual he couldn’t make a difference, and some of the only people who could were CEOs in the fossil fuel industry.

Follow This works by buying shares in the oil industry so it can then attend meetings and put climate target resolutionson the agenda of oil firms’ AGMs. It represents around 6,000 supportive shareholders who can buy a share in oil firms for Follow This to then represent them at AGM voting. If their resolution gets majority shareholder approval, the company will be forced to change the way it operates.

Follow This is not alone – ShareAction and the aforementioned Engine No. 1 operate similar models to leverage stakeholder pressure.

Have they been successful? Yes. The headlines this week follow growing success for Follow This. On Wednesday the organisation’s Chevron proposal received 61% of support from shareholders, representing the organisation’s third successful shareholder rebellion after it forced through votes to cut emissions at ConocoPhillips and Phillips 66 earlier this month. At Shell’s last AGM, Follow This’s resolution even received support from Legal & General Investment Management (LGIM) – Britain’s largest fund manager, which manages more than more than £1.2tn of assets.

Is this the right approach to tackle climate change? Some argue that by requiring oil firms to drastically cut back their oil production and move towards renewable energy, companies may be forced to lay off many workers who specialise in oil and gas production – so there are human impacts to these decisions. Furthermore, although LGIM supported the Follow This resolution at Shell’s AGM, it still has reservations about the activist group’s objectives to use shareholder pressure to turn oil and gas firms purely into renewable energy companies.

Some climate activists believe investing in oil companies is the wrong approach, as you are providing capital to the company to increase its services and there is a chance the resolution may not receive majority support. However, even if majority support is not received, the movement does adds pressure on the oil company to change its behaviour.

On the other side of the equation, completely divesting from oil companies can be seen as leaving the problem for someone else to fix, so changing from within might be the better option.