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Exxon has given in to shareholders who have demanded that the company increase its transparency with regards to the effect of climate change policies on its business. In a regulatory filing yesterday, the world’s top integrated oil company said it will “enhance its disclosures,” including, “energy demand sensitivities, implications of two degree Celsius scenarios, and positioning for a lower-carbon future.”
The enhancements follow a request from a shareholder, the New York State Common Retirement Fund, which insisted at the company’s annual shareholders’ meeting that Exxon begin acknowledging the effects that climate change policies would have on its operations.
The fund received the support of shareholders owning about 62 percent of the company, with the demands including annual reports on the impact of technological change and climate change policies on the business. The principal argument of the shareholders was that they needed to be able to assess the long-term resilience of Exxon in the face of an ever more intensive drive to curb the effects of climate change and slow it down.
At first, the board of directors rejected the demands for these annual assessments, arguing that the company’s planning and investment strategy had already factored in climate change policies, and that despite this challenge, Exxon would continue to deliver shareholder value. Now, according to the SEC filing, the board has decided to reconsider its initial position, evidently after talks with the shareholders that insisted on the climate change reports.
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The FT notes in a report on the news that this is a major victory for activist shareholders who have been demanding from large companies to start disclosing the effects that climate change—and policies to tackle it—are having or will have in the future on their operations.
Exxon was notorious for its climate change denial until recently, when the company acknowledged climate change and spoke in support of the Paris Agreement. The acknowledgement came as Exxon was challenged in court for failing to disclose for decades evidence of the impact of the energy business on climate.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.