Q&A with Follow This on its shift in strategy for 2025
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An interview with Amsterdam-based Follow This founder Mark van Baal on the advocacy group’s recent decision to pause climate resolutions at oil and gas companies.
Follow This has taken the strategic decision to step back from advancing climate resolutions at oil majors this season stating that doing so could be counterproductive given the pro-fossil political climate. Can you expand on what drove this change in approach?
We have decided to pause resolutions for a year, but all our other activities are still there. We still remain the most important counter shareholder voice of the oil and gas industry.
However, we decided that in the current times, filing another resolution with the risk of a slightly lower vote than last year would be counterproductive. We had 20% of the votes in Shell for three years in a row and that’s despite all the divestments. It’s one in five of shareholders and we think there is potential to get that to four in five.
We have evidence that in 2021 we had majorities in the U.S. - we had 80% at Phillips 66 and we had around 60% at Conoco Phillips. The potential is there but investors have become very hesitant in the last few years, so it's very difficult to get that one in five. Every time the votes go up, the ambitions of the old majors go up. But when the votes go down, they scale down or they even scrap ambitions like Shell and BP did recently.
Was this a difficult decision to arrive at given that you've been advancing such proposals since 2016?
The resolutions have been very effective. We compelled five oil majors to set Scope 3 targets, something they didn't want to do. So that's quite hard evidence.
But last year, when the votes plateaued, they didn't force the companies to improve targets. On the contrary, they scrapped targets like we saw at Shell and BP. So, we decided that we first have to get a stronger investor base. Last year, we had 27 investors as co-filers and we want to get more on board and, together with them, prepare ourselves to defend shareholder democracy.
Follow This has cited a “double challenge” faced by investors and the proponents who are working to put climate on the agenda. What are the key obstacles?
Specifically in the U.S., we have a pro fossil fuel government and an SEC with management appointed by Trump which is also curbing shareholder rights like in the first Trump term when we also didn't get our resolutions on the ballot.
The SEC has also published bulletins where they discourage shareholder action and shareholders talking with companies so it's really an attack on shareholder democracy. So, all of these factors make investors hesitate to co-file and hesitate to vote.
Then there are states in the U.S. that are suing some large investors for even considering climate. It is their role because climate risk is financial risk and on top of that, it's also the fiduciary duty of an investor to make sure the company doesn't make decisions that jeopardize its future such as by continuing to invest in oil and gas. You will end up with stranded assets and you will have to pay for the cost of climate damage.
This season, as part of the tweaked approach, Follow This has vowed to intensify efforts to highlight the “crucial role” investors play in the climate crisis. How do you plan to go about this?
We need to empower the investors. We really want to find out what is holding them back to use the power of the vote. Shareholder democracy is the only democracy in the free world where voting is considered escalation. There has been a tradition of engagement in the ESG shareholder space. Slowly, we're getting them to understand that engagement without voting, without using the only tool they have, doesn't work. We've proven that.
Last year, Follow This and Arjuna Capital were sued by ExxonMobil in response to climate-focused shareholder proposals they had filed. Has the lawsuit had a chilling effect given there are no shareholder demands featured on the ExxonMobil ballot for 2025?
The fact that Exxon does not have any shareholder resolution on the ballot has more to do with the SEC, I think, in that as we mentioned we're back to the same situation as we were in the first Trump period. But indeed it has had a chilling effect on investors because nobody wants to be sued and it's a very odd situation that the company would sue its own shareholders.
So there is a chilling effect, of course, and more on investors than on us because we still think this is the key tool, so we have to use it. But we have to convince investors that they should be more afraid of the climate crisis than of lawsuits. However, that's also a big effort.
Overall, DMI has seen a marked reduction in the number of ESG proposals advanced in the first quarter of 2025 compared to previous. Are proponents in “wait and see” mode given the changing landscape in the U.S.?
I think there's really a “wait and see” now because of the election of Trump, the anti-ESG sentiment and states suing investors for considering climate. Something which was a scientific fact has been made into a political debate. It’s almost like identity politics. If you want to tackle the climate crisis, you’re too woke or too left wing.
It will take time, but I think they will conclude that that the risk of the cost of climate change is far higher than the cost of litigation. But they need to have time, and I also understand that investors are risk averse. They should be, because they're trusted with billions. However, I think every investor will have to get out of that comfort zone on climate. They have to show up and show courage on these issues and I’m confident they will with time.
In March, Follow This called on shareholders of BP to vote against Chair Helge Lund in protest at the U.K.-based oil and gas giant’s decision to alter its climate strategy without seeking shareholder approval. What do you hope to achieve in this campaign?
We started this campaign in March just after BP decided to backtrack on the climate strategy that had been approved by shareholders by a vote. Then suddenly with an activist investor behind the scenes, they backtrack with quite a panicked U-turn. We feel this is not good for climate but it's also not good governance.
Normally we don't opt to vote against board members but here we thought that Lund had crossed the line on governance. We and other investors were very dismayed with this way of working. It is not our goal to oust him but to send a signal that all shareholders must be listened to. If he changes a strategy that radically, he needs to get another vote.
Looking forward to 2026 and beyond, is Follow This hoping to return to craft climate resolutions?
Yes, we will go back as soon as investors are ready to put more pressure on the oil and gas companies. This year is a very uncertain year given the business, political and legal climate.
As soon as we know that we can increase the pressure to get them moving in the other direction again, then we will be back with a resolution or with other means. It's not that we are married to the resolution method. Our mission remains the same. It's to empower shareholders to compel Big Oil to reduce emissions to tackle the climate crisis. We still think that the shareholder resolutions are the best way to do that. But if there are other ways, then we will use them.
