Audit developed in response to a shareholder proposal fails to address key concerns on environmental racism and discrimination.
NEW YORK, NY, MONDAY, MAY 8TH, 2023 – Faith-based investor members of the Interfaith Center on Corporate Responsibility and shareholders of Chevron ($CVX) today announced their dissatisfaction with a Racial Equity Audit (REA) the company developed in response to a 2022 shareholder proposal they submitted which received 48% support.
The company recently published a report investors say fails to address key concerns on environmental racism and discrimination. Proponents of the proposal specifically requested that Chevron conduct an REA assessing the impacts of its operations and policies on communities of color. The proposal further requested that impacted workers, community members, customers, and other relevant stakeholders be consulted in the development of the audit and report, yet these stakeholder perspectives were not included in the process. An assessment of the report versus the main requests of the proposal is here.
“Chevron is attempting to replace what should have been a comprehensive REA addressing concerns of discriminatory political donations, environmental racism, and poor community relations with a closed-door report focused on employment practices and corporate philanthropy,” said Courtney Wicks, Executive Director of Investor Advocates for Social Justice. “An independent REA of the company's operations and policies, not its internal practices, would help Chevron identify, prioritize, remedy, and avoid adverse impacts on people of color while reducing reputational risk and liabilities.”
Investors also question the integrity and independence of the report, as it was conducted by Paul Weiss, a firm that has frequently served as Chevron’s legal advisor and whose tactics have been scrutinized for fueling climate denialism.
Chevron is one of the world's highest greenhouse gas emitting companies, and lawsuits and fines underscore how the company’s operations contribute to the climate crisis and disproportionately affect communities of color. Notably, impacted stakeholders that informed the REA were not disclosed and the audit lacks input from independent groups.
"Like many fossil fuel companies, Chevron's operations have a legacy of disproportionate harm to communities of color around the globe. But unlike others, Chevron has distinguished itself by the deliberate acts it has taken against those communities when they speak up in defense of their rights and against Chevron's harmful practices,” said Paul Paz y Miño, Associate Director at Amazon Watch.
Chevron did not communicate nor consult the lead proponent and many co-filers about its plans to conduct a REA, a standard practice when companies respond to shareholder requests. Chevron’s audit of internal practices does not serve as a replacement to a REA focused on business operations, and investors seek more disclosure on how Chevron is managing material risks connected to policies and practices that further racist, discriminatory, or inequitable impacts.
“This is an attempt by Chevron to circumvent real progress on racial equity and stifle shareholder support for the proposal,” said Dave Moore, American Baptist Home Mission Society. “An audit of employment practices is a good step, but it in no way addresses Chevron’s material risks stemming from the mounting ‘loss and damage’ class action lawsuits being filed against the company by communities in high-risk environmental justice areas.”
About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.