ExxonMobil along with 4 other companies have been removed from its board following non-compliance to key minimum requirements, including on emissions reporting and targets.
In a significvant development, the Legal & General Investment Management, Britain’s biggest asset manager, has dumped ExxonMobil along with four other companies, from its board saying it would vote against their chairs for failing to confront the threats posed by climate change.
Legal & General Investment Management is the funding arm of insurer Legal & General, which has 1 trillion pounds under management. The fund has been the most vocal asset managers on climate risks.
It will also divest from Hormel Foods, Korea Electric Power Corporation, Kroger and Metlife. The divestment only applies to LGIMs Future World Funds which it says are set up for clients who want to express a conviction on environmental, social and governance (ESG) themes.
“In all other LGIM (non-Future World) funds that remain invested in those companies that have not met our criteria, we will vote against the election of the chair of the board,” said Meryam Omi, Head of Sustainability and Responsible Investment Strategy, LGIM.
She went on to add, “We can vote against the chair on any number of issues, so to do so because of a single issue such as climate change sends a powerful message to companies that they should be raising their standards in this area”.
The move is aligned with its Climate Impact Pledge, which it launched in 2016; LGIM has sought to “engage with the largest companies in the oil and gas, mining, electric utilities, autos, food retail and financial sectors on climate change and said it would take action.”
“ExxonMobil Corporation has not met our key minimum requirements, including on emissions reporting and targets,” said LGIM in its report.
LGIM stated, “meeting the 2015 Paris climate agreement goal of limiting global warming to 2 degrees Celsius would mean cutting fossil fuel use by a third by 2040”.
Although institutional investors have pressed Exxon to define a path toward meeting the Paris agreement, the company has yet to commit to any targets. In May 2019, shareholders defeated measures calling for a special board committee on climate change and for a report on the climate risks.
Exxon was not immediately available for comment.