|Cheniere Energy, Inc.||2020||N/A||https://www.blackrock.com/corporate/literature/press-release/blk-vote-bulletin-cheniere-jun-2020.pdf|
During our most recent engagement with Cheniere earlier this year, we raised our concern that the company does not have fulsome TCFD aligned reporting available to shareholders. While the company provides information on its website regarding board oversight of climate risk and the company’s belief that LNG will remain a viable source of energy into the future, the company does not set forth scenario analysis, GHG reduction targets, or its risk management process. The company advised BIS that it is aware of this gap and plans to release an inaugural corporate responsibility report by year end 2020. The report will be aligned with elements of the reporting standards and recommendations set forth by the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB), among others. The report is also expected to include a discussion of the company’s outlook for LNG demand under the International Energy Agency’s Sustainable Development Scenario,4 as well as its views on the risk of stranded LNG facility assets during the transition to a lower-carbon economy.
We are encouraged by Cheniere’s plans to publish a report aligned with the recommendations of TCFD and SASB and are hopeful that these disclosures answer many of the questions we currently have with regard to risk management and strategic planning around climate risk. However, given the company’s business model, we would have expected the company’s current reporting on these topics to be more advanced, particularly given BIS’ engagement with the company in prior years.
By not having this reporting already in place, the company is lagging its peers and leaving investors without a clear sense of important components of the company’s risk-management approach. These facts, combined with our inability to predict the fulsomeness of the future reporting, leaves us concerned about the robustness of the company’s current approach to climate risk.
- Report on Plans to Address Stranded Carbon Asset Risks
Given the specificity of this proposal and the company’s lack of reporting baseline on account of its lagging scenario analysis disclosures, the company should prioritize bringing its reporting in line with the recommendations of SASB and the TCFD. Once we have had an opportunity to review the company’s forthcoming disclosures, we can better provide them our feedback on the rigor of their targets.