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Occidental Investors Reject Environmental Group’s Climate Proposal

These translations are done via Google Translate
(Bloomberg) Occidental Petroleum Corp. shareholders rejected an environmental group’s proposal for the oil explorer to set more rigorous targets for greenhouse-gas emissions.

Shareholders voted 83% against the proposal during its annual meeting on Friday, according to preliminary results issued by the company.

The vote was a blow to environmental activists that have mounted a more aggressive campaign to pressure major oil producers to lay out plans to combat climate change.

Dutch investor group Follow This proposed that Occidental set short-, medium- and long-term targets to reduce carbon emissions, including those of its customers, in line with the Paris Agreement. The major proxy advisory firms — Institutional Shareholder Services Inc. and Glass Lewis — were split over whether investors should support or reject the proposal.

“The significant opposition to Follow This’s proposal reflects the confidence Oxy’s shareholders have in the company’s net-zero strategy,” Chief Executive Officer Vicki Hollub said after the result was announced.

Mark van Baal, founder of Follow This, said the 17% of holders who supported the measure still need to be reckoned with by Occidental. He urged investors in seven other major oil companies to support similar emissions proposals.

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‘Significant Signal’

“It’s a significant signal that investors are losing their patience at Big Oil’s refusal to curb emissions by 2030,” van Baal said.

Occidental’s board opposed the measure, calling it “misdirected” because the oil producer was the first U.S. energy company to establish targets to zero out emissions from both its operations and its customers. The company has set 14 specific “goals” to reduce emissions the board asserts are in alignment with the aim of the Paris Agreement.

The company plans to cut emissions from operated assets worldwide by at least 3.68 million metric tons per year by 2024, a 13.3% reduction from the company’s 2019 emissions. It also looks to achieve net-zero emissions from its operations between 2035 and 2040. Ultimately, Occidental’s goal is to reach net-zero emissions from both its operations and customers by 2050.

However, those goals rely heavily on capturing carbon dioxide and burying it, a technology that’s so far been prohibitively expensive and is not yet commercial.

Occidental plans to build 70 carbon-capture facilities globally by 2035 that will each remove as much as 1 million tons per year of the greenhouse gas directly from the atmosphere. Construction on the company’s first $1 billion direct-air-capture plant is expected to start later this year in the Permian Basin of West Texas, with startup slated for late 2024.

When fully built, the plant billed as the world’s largest DAC project, will remove emissions from the equivalent of about 215,000 cars annually from the atmosphere, Occidental said. The company also is investing $100 million this year to develop three carbon sequestration hubs by 2025.

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