ExxonMobil Passes Proposal for New Climate Change Report
Starting next year, Exxon will report the impact of climate change risks and regulations on its business.
ExxonMobil shareholders passed a proposal calling for the oil giant to produce annual reports on the impact climate change has on its business, at least the third instance this month of shareholders voting in favor of such reporting at a major energy corporation.
At Exxon’s annual shareholder meeting Wednesday in Dallas, 62 percent of shareholders voted in favor of the proposal, according to preliminary results. Exxon’s board of directors will reconsider proposals that received majority shareholder approval, including the climate change report, said Darren Woods, chairman and CEO of ExxonMobil, after the vote.
The climate change proposal, which was co-filed at Exxon this year by the New York State Common Retirement Fund and the Church of England’s investment fund, has support from investors such as the California Public Employees’ Retirement System and the New York City Retirement Systems. It calls for Exxon to consider the impact of carbon restrictions on its business, as well as rules such as the Paris Agreement, a United Nations agreement last year to limit global average temperature increases this century to 2 degrees Celcius.
“This is an unprecedented victory at Exxon for investors in the fight to ensure a smooth transition to a low-carbon economy,” said New York State Comptroller Thomas DiNapoli, trustee of the New York state’s fund, in a statement after the Wednesday meeting. “Climate change is a risk to the core business of ExxonMobil, and the burden is now on the company to show that it is responsive to shareholder concerns.”
The New York State Common Retirement Fund and the Church of England’s investment fund made the same climate change proposal to Exxon last year, receiving just 38 percent support from shareholders. Edward Mason, head of responsible investment for the Church of England, expressed disbelief during the oil company’s meeting Wednesday that he was making the same proposal to the board for the second straight year.
“Members of the board, do you leave your knowledge of climate change at the door when you attend shareholder meetings?” Mason said in a scathing remark to Exxon’s board of directors.
Woods emphasized during the meeting that Exxon believes “the risks of climate change are serious and warrant thoughtful action.” In the company’s April 13 proxy statement, the board said it already published a report called “Energy and Carbon – Managing the Risks” to give shareholders a description of climate change policy and carbon asset risks. Exxon said it also stress tests its investments, while its business segments are required to include an estimate of costs associated with greenhouse gas emissions when seeking funding.
With these efforts already in place, “we remain confident in the commercial viability of our portfolio,” Exxon said in the proxy statement.
Exxon shareholders vote to approve the climate change proposal days before President Donald Trump says he’ll make a decision on whether to pull the U.S. from the Paris Agreement, signed by former President Barack Obama just last year.
Shareholders have had success pushing climate change agendas at other energy companies this month.
On May 17, a majority of PPL Corp. shareholders approved a proposal filed by DiNapoli to require climate change reporting at the Allentown, Pennsylvania-based power producer. And a similar proposal passed May 12 at Occidental Petroleum, which would require the oil and gas company to produce a detailed report assessing the impact of climate change.