Exxon must put climate on ballot
The Securities and Exchange Commission has told Exxon Mobil that it must include a resolution on its annual shareholder proxy that, if approved, would force the company to outline for investors how its profitability might be affected by climate change and the legislation that aims to combat it.
The decision was a defeat for the energy giant, which had fought against it. The proposal was introduced in December, after the Paris accord on climate change, by a coalition of investors led by New York state’s comptroller, Thomas DiNapoli, who is the trustee of New York state Common Retirement Fund, and the Church of England.
Alan Jeffers, a spokesman for Exxon Mobil, the world’s largest publicly traded oil producer, said Wednesday that the company would “provide the board’s position on the shareholder resolutions in our proxy document, which will be distributed to shareholders next month.”
It is not clear if Exxon’s shareholders will embrace the resolution. Last year,
they soundly rejected a proposal to add to the board an independent director with expertise in climate change.
Exxon Mobil had told regulators that the proposal was too vague and that the carbon disclosures the company already provided were adequate. But those arguments were rejected by the SEC in a letter to the company Tuesday.
“Based on the information you have presented, it does not appear that Exxon Mobil’s public disclosures compare favorably with the guidelines of the proposal,” wrote Justin Kisner, an attorney-adviser at the commission.
The coalition that introduced the proposal represents nearly $300 billion in assets under management and more than $1 billion in Exxon shares, according to a statement released in July by DiNapoli’s office. Other members of the group include the Vermont State Employees’ Retirement System, the University of California Retirement Plan and the Brainerd Foundation.
The group’s leaders greeted the SEC decision as a victory for investors concerned with the possible effects of climate change on their portfolios.
“The Securities and Exchange Commission’s determination upholds shareholders’ rights to ask for vital information,” DiNapoli said in a statement. “Investors need to know if Exxon Mobil is taking necessary steps to prepare for a lower-carbon future, particularly now in the wake of the Paris Agreement.”
Edward Mason, head of responsible investment for the Church of England, said the decision was an important step toward allowing shareholders to confirm that the company is “positioning itself for the transition to a low-carbon economy.”
Awareness of climate change is putting increasing pressure on Exxon. The company is said to be under investigation by New York state, which is trying to determine whether it lied to the public about the risks of climate change.
On Wednesday, the Rockefeller Family Fund — an endowment established in 1967 by grandchildren of John D. Rockefeller Sr., co-founder of Standard Oil, a precursor to Exxon — said it would divest its slender holdings in fossil fuels as “quickly as possible,” singling out what it called the “morally reprehensible conduct” of Exxon.