Two group of investors, who have a combined total of $1.9 trillion assets under management are pushing Exxon Mobil Corp to address significant climate risk concerns.
According to two groups of investors, Exxon Mobil Corp is attempting to block an investor proposal that calls on the largest publicly traded oil company to set targets for lowering its greenhouse gas emissions.
In late January, Exxon wrote to the U.S. Securities and Exchange Commission (SEC) stating that the investor proposal, set for a vote at its annual meeting in May 2019, is misleading and an attempt to “micro-manage the company”.
The proposal has the backing of the Church of England, the Church Commissioners for England (CCE), as well as that of New York State Comptroller Thomas DiNapoli, who manages the state’s pension fund.
“Trying to strike out a shareholder proposal from institutional investors with a fiduciary responsibility to manage climate risk is an outdated reflex,” said Edward Mason, head of CCE. “Our proposal deserves more serious consideration.”
Exxon Mobil’s peers, including Royal Dutch Shell PLC and BP Plc, have already taken steps to broaden disclosure on greenhouse gas emissions or tied executive pay to reducing emissions.
Investors supporting the Exxon proposal manage a total of $1.9 trillion and are led by DiNapoli.
“Exxon is trying to deny shareholders’ right to vote on a significant climate risk concern,” said DiNapoli in a statement while adding Exxon’s position is “shortsighted and disappointing.”
The proposal, led by New York state’s pension fund, calls on Exxon to start setting targets for cutting greenhouse gas emissions that are “aligned with the greenhouse gas reductions goals established by the Paris climate agreement,” including for use of its own products.
These short, medium and long-term targets will allow shareholders to supervise its “day-to-day” considerations, said Exxon in its letter to the SEC.
The 2015 Paris Agreement which aims to limit a rise in average world temperatures to “well below” two degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial times.
In 2017, DiNapoli spearheaded a campaign that convinced a majority of shareholders to call on Exxon to detail risks it could face from rising global temperatures.
Exxon produced a report last year outlining how global oil demand could drop sharply by 2040, but critics said the report fell short on areas like how climate policies could affect company finances.