Find out more at btsub.sg/btdeal
You are here
ExxonMobil faces climate showdown at annual meeting
[NEW YORK] ExxonMobil's controversial stance on climate change will be back in the spotlight Wednesday when shareholders vote on an environmentalist-backed measure calling for an accounting of climate policy risk.
The US oil giant has successfully beaten back shareholder proposals on climate change for years, but the measures have been picking up momentum and a number of leading institutional investors that supported Exxon previously, have signaled they may break ranks this time.
The proposal, submitted by the New York State Common Retirement Fund, seeks an annual assessment of Exxon's asset portfolio under different policy scenarios, including those that limit temperature increases to under two degrees Celsius and are consistent with the 2015 Paris climate accord.
Environmentalists have argued that Exxon's petroleum-dominated portfolio of assets could become uneconomic under tougher climate policies, and the company has not thoroughly analyzed this risk. They call on Exxon to invest more in renewable energy and less in oil.
Exxon has pointed to its research collaborations with leading universities on alternative energy, while maintaining that oil will remain "the world's primary fuel through 2040," according to its proxy statement.
The oil giant said it already conducts its own stress tests under various scenarios and its current processes "sufficiently test the portfolio to ensure long-term shareholder value". A similar shareholder proposal failed last year, but garnered 38.2 per cent of the vote, surprisingly strong support for a measure opposed by management.
Leading institutional investors, including BlackRock and Vanguard Group, have signalled they may support environmentalists this year, according to a Wall Street Journal report.
The Exxon vote comes after shareholders of midsized US oil company Occidental Petroleum on May 12 voted overwhelmingly (67 per cent) in favour of a similar proposal. Chevron, the number two US oil company, also faces a vote on a climate policy assessment at its annual shareholder meeting on Wednesday.
Exxon has long been a lightning rod over its stance on climate change, which included publicly challenging climate science at a time when most scientists and some leading oil companies called for action.
The company is now facing an investigation by New York Attorney General Eric Schneiderman on whether it knowingly downplayed the risk of climate change.
Exxon in recent years has shifted its stance, recognising climate change as a risk that needs to be mitigated and even calling on President Donald Trump to honour the Paris agreement. But that has done little to appease environmentalists, who say management should be doing more.
Former Exxon CEO Rex Tillerson now serves as Mr Trump's secretary of state.