ExxonMobil Pushes Back Against Shareholder Resolution on Climate Change

In December 2018, the New York State Common Retirement Fund (NYSCRF) and the Church of England’s investment fund (Church Commissioners) filed a Shareholders Resolution seeking to have ExxonMobil set and report on greenhouse gas (GHG) reduction targets for emissions from both operations and use of its products. The resolution specifically asks for the company to disclose short-, medium-, and long-term goals in its annual reporting, beginning in the year 2020. The resolution asks that such reductions be in keeping with the Paris Agreement goal to keep the increase in global temperatures below 2 degrees Celsius and strive for reductions to meet the aspirational goal of no more than 1.5 degrees Celsius. The resolution supports this call by noting that the move to a lower and zero emissions economy is currently underway and that setting and publicizing such goals is an essential part of positioning the company for the future. Additionally, the resolution notes that although ExxonMobil has announced a 2020 methane emissions reduction goal, other similar petroleum companies (Total and Shell) have announced more long-term goals.

In a press release announcing the resolution, N.Y. Comptroller Thomas DiNapoli noted that the lack of GHG emissions reduction targets puts the company out of line with its peers in the industry. Furthermore, he noted that ExxonMobil “needs to demonstrate its ability to adapt or risk its bottom line along with investors’ confidence.” Edward Mason, Head of Responsible Investment for the Church Commissioners, stated, “[w]e want to see ExxonMobil develop a clear strategy for long-term sustainability, in line with international commitments for a safer climate. . . Our request would bring Exxon in line with its biggest European peer, Shell, and we believe the board can and should support it.”

This is not the first time the NYSCRF and Church Commissioners (and others) have filed a resolution to have the company provide more information related to climate change. In 2017, the two filed a resolution seeking the company to account for the impact of climate change on its business. This resolution received 62% shareholder support in 2017 and led to the first report issued by the company in December 2017.

According to reporting that first appeared in the Financial Times on Sunday February 24, ExxonMobil wrote a letter to the SEC in late January seeking to block the shareholder resolution. The letter reportedly claimed that it was an attempt to “micromanage the company” and was misleading. Edward Mason responded to this action stating, “[t]rying to strike out a shareholder proposal from institutional investors with a fiduciary responsibility to manage climate risk is an outdated reflex.” Thomas DiNapoli characterized the move by the company as “shortsighted and disappointing”, noting that the company is “trying to deny shareholders’ right to vote on a significant climate risk concern.” There is no word yet on whether the SEC will intervene.


Suzanne Barlyn, Exxon asks U.S. regulator to block climate-change resolution: investors, Reuters, Feb. 24, 2019, https://www.reuters.com/article/us-exxon-mobil-shareholders-climatechang/exxon-asks-u-s-regulator-to-block-climate-change-resolution-investors-idUSKCN1QD0X1

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