Commercial, GHG Emissions, Industrial - June 5, 2017
Exxon shareholders call for climate risk disclosure
Shareholders of Exxon Mobil on May 31 approved a proposal calling for the global oil and gas company to assess and disclose risk related to climate change.
According to a summary of the company's proxy voting results, 62.1% of shareholders voted in favor of the nonbinding resolution, up from the 38% that voted in favor of a similar proposal presented last year.
Institutional investors with more than $5 trillion of combined assets under management co-filed the proposal, including lead-filers from the New York State Common Retirement Fund and the Church Commissioners for England, according to a news release from the nonprofit sustainability advocacy group Ceres.
"This is an unprecedented victory at Exxon for investors in the fight to ensure a smooth transition to a low-carbon economy," New York State Comptroller Thomas DiNapoli said in a statement. ", and the burden is now on the company to show that it is responsive to shareholder concerns."
The company's board of directors recommended against the resolution, which is nonbinding, though The New York Times reported May 31 that Exxon CEO Darren Woods said the board "would consider the result because it reflected the view of a majority of shareholders."
The vote at Exxon, coupled with recent majority votes at Occidental Petroleum and utility holding company PPL Corp., represent a shift in investor support for climate risk disclosure. According to Ceres, as recently as 2015, similar resolutions averaged 23% support. A string of high votes this year at other U.S. oil and gas companies and electric utilities is elevating the call for enhanced disclosures on climate risk and opportunities amidst the energy transition.
"Now the very largest investors in the world are challenging the companies representing some of their biggest holdings on this issue," Ceres said.
The Exxon proposal — which appears on page 62 of the shareholder proxy statement — specifically requests that the company publish an annual assessment of the long-term impacts of technological advances and climate policies on its full portfolio of reserves and resources, including a portfolio resilience assessment that considers a low oil demand scenario consistent with the target of keeping global temperatures from rising more than 2 degrees Celsius above pre-industrial levels.
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