Exxon, Chevron face test on climate change

Exxon Mobil and Chevron’s unwillingness to venture beyond their core oil and gas business will face a test Wednesday when shareholders vote on climate change proposals at both oil companies’ annual meetings.

The U.S. oil majors have typically enjoyed an easier ride from investors on environmental issues compared with their European rivals. But pressure is building from some investment managers, especially after Royal Dutch Shell and BP recently made significant shifts to address investor concerns.

“I don’t think they’re doing nearly as much as the majors in Europe are,” said Brian Rice, a fund manager at the California State Teachers’ Retirement System, which manages about US$230 billion, including Exxon

and Chevron shares. There’s still a big difference between the U.S. and European oil majors over how they deal with investors’ climate concerns.

For example, BP’s board this month supported a proposal that it disclose how the company’s investments are compatible with the Paris climate accord.

Exxon, by contrast, got the Securities and Exchange Commission to strike a similar proposal off the ballot. Yet U.S. energy companies can’t afford to be complacent. The New York State Common Retirement Fund and the Church of England criticized Exxon’s plea to the SEC and vowed to vote against all its directors at its meeting.

The oil giant said in response that its board already holds at least one session a year dedicated to climate issues and already discloses the likely effects on its business.

I don’t think they’re doing nearly as much as the majors in Europe are.