Exxon Shareholders Approve Climate Resolution: 62% Vote for Disclosure – InsideClimate News

http://bit.ly/2rdkOJg

ExxonMobil shareholders voted Wednesday to require the world’s largest oil and gas company to report on the impacts of climate change to its business—defying management, and marking a milestone in a 28-year effort by activist investors.

Sixty-two percent of shareholders voted for Exxon to begin producing an annual report that explains how the company will be affected by global efforts to reduce greenhouse gas emissions under the Paris climate agreement. The analysis should address the financial risks the company faces as nations slash fossil fuel use in an effort to prevent worldwide temperatures from rising more than 2 degrees Celsius.

Last year, 38 percent of Exxon shareholders supported essentially the same measure, which at the time was a record.

The vote at Exxon shows the rapid erosion of support for the company’s defiant stance on climate disclosure, and it caps a shareholder meeting season that saw unprecedented support for greater corporate disclosure on climate change. In recent weeks, shareholders voted in favor of climate risk analysis at two other major energy companies, Occidental Petroleum and PPL, Pennsylvania’s largest utility. Climate-related shareholder resolutions also garnered record support at other big U.S. utilities that rely on fossil fuels: Dominion Resources (47.8%), Duke Energy (46.4%) and DTE Energy (45%).

In a week when President Donald Trump is expected to either back out of the Paris accord or scale down the U.S. commitment to cut carbon emissions, the vote at Exxon shows that momentum for action on climate is growing without White House leadership.  

Mainstream investment firms are asking harder questions of companies as scientific evidence of the need for deep decarbonization of the global economy mounts. Investigations, first by InsideClimate News and then by Columbia University School of Journalism/Los Angeles Times, have also showed that Exxon long knew of the risks posed by climate change, yet its leaders avoided disclosing those risks to the public and instead sowed doubt about the science.

The oil industry and its allies are mounting a defense, with prominent industry analyst Daniel Yergin, the powerhouse lobby of the U.S. Chamber of Commerce and others opposing calls for climate change scenarios to be integrated into corporate financial disclosure. They say that securities law on disclosure is meant to inform investors of potential returns, not to implement social policy.

But institutional investors argue that climate risk is a long-term financial risk that should be integrated into financial reporting.

BlackRock, the world’s largest investment firm, with $5.1 trillion in assets under management, and several major global investors—including State Street, Aviva, and Legal & General—have signaled that they want more transparency on climate change risk. BlackRock’s first vote against corporate management on climate came this year against Occidental, where it was the largest institutional investor.

“I think we are witnessing a truly historic shift in shareholder support for these resolutions,” said Andrew Logan, director of the oil and gas program at Ceres, a nonprofit that works with institutional investors on sustainability issues. “It’s a sign that the world is getting ahead of the oil industry. When you have very conservative institutions like BlackRock and Vanguard taking these positions, you know the issue has changed in some fundamental way.”

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s