A nun from an influential interfaith coalition with U.S. $100 billion in assets that include a stake in ExxonMobil is pushing for change, but the supermajor isn’t bowing to anyone on climate change - even, apparently, ‘divine’ forces.
ExxonMobil’s annual meeting saw its shareholders pass a resolution that could see a climate expert join the company’s board, a move that could force the company to face the climate change-related problems that many of its peers have already acknowledged.
The resolution, which will allow shareholders holding a combined 3 percent of Exxon’s stock to nominate new board members, is one of nine climate-change related resolutions that were put up for a vote at the meeting. The other eight were rejected by the majority.
Among the rejected resolutions was one from Sister Patricia Daley, member of the Interfaith Center on Corporate Responsibility (ICCR), who urged Exxon’s management to start acting on climate change by changing its policies for the future. This one got just 18.5 percent of the votes. Related: Why We Need $120 Oil
This rejection has become the latest example of Exxon’s notorious resistance to even acknowledging climate change, claiming that environmental activists basically overblew things. The New York Attorney General, however, doesn’t seem to think so. Exxon is currently under investigation for covering up information about the effects of the oil industry on the climate, and even before the lawsuit, it surfaced that the oil giant has known of the link between fossil fuel use and climate change for decades, and failed to share evidence of this link with its shareholders. Exxon has denied all claims.
Exxon was among the very few oil industry majors that reported a profit for last year, despite the oil price rout that plunged many in the red. Now, all managers know that shareholders are strongly attached to the bottom lines of the businesses they invest in, but Exxon’s management seems to have neglected the change in investor sentiment lately, especially after the signing of the Paris Agreement, which stipulates a limitation of global warming to less than 2 degrees Celsius from pre-industrial levels.
Investors are worried. Perhaps not all of them are genuinely worried by the effects of climate change on the planet, but they are certainly worried about Exxon’s long-term survival in a new environment of concerted international efforts to reduce global dependence on fossil fuels. In short, they are concerned about future bottom lines, and some of them may get so concerned as to exit the company. Related: Oil Speculators No Longer Confident In Price Crash
For now, Exxon’s management probably feels safe in the knowledge that just one of the nine climate change-related resolutions was passed. But times are a-changing and they are a-changing faster than ever, including the perspective of investors in the energy industry. It’s not unlikely that next annual general meeting will see more support for climate change-related resolutions – the pressure on the industry from governments and environmentalists will only increase – and Exxon may well be forced to change direction.
Changing direction can be smooth if you anticipate it and prepare accordingly. Until now, however, Exxon has been generally using the ostrich tactic, unlike Royal Dutch Shell, whose chief executive recently acknowledged, albeit indirectly, the need to diversify into green energy.
By Irina Slav for Oilprice.com
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