Colossal fossil ExxonMobil is turning to the U.S. Securities and Exchange Commission for permission to dodge its own shareholders’ resolution calling on management to set and disclose targets for cutting greenhouse gas emissions in line with the 2015 Paris Agreement.
In a January 31 letter to the SEC, Exxon said it “plans to omit the shareholder proposal from its 2019 proxy materials and prevent voting on the proposal,” Climate Liability News reports. “It asked the commission to confirm that it will not recommend enforcement action if it does so.”
The Exxon letter “contends the proposal, which was sponsored by the New York State Common Retirement Fund, the Church of England, and dozens of co-filers, is ‘vague and misleading’ and seeks to ‘micro-manage’ the company,” CLN adds.
“Exxon is trying to deny shareholders’ right to vote on a significant climate risk concern,” responded New York State Comptroller Thomas DiNapoli in a prepared statement. “Trying to strike out a shareholder proposal from institutional investors with a fiduciary responsibility to manage climate risk is an outdated reflex,” agreed one Church of England official.
In its 2019 Energy and Carbon report, the company claims it supports the Paris deal, “but does not mention the increasing number of climate liability suits Exxon is facing or the lawsuit filed by the New York State attorney general’s office for deceiving investors over climate risks to their investments,” CLN notes. “The SEC was critical of the company in 2016 for its rejection of an earlier resolution demanding disclosure on climate risk, but last year—after the Energy and Carbon Report was issued—the SEC allowed Exxon to exclude a proposal asking for additional disclosures.”
The U.S. regulator is expected to rule on Exxon’s request within 30 days. If it backs the company, the resolution’s supporters will be entitled to take legal action. If it agrees with the shareholders, Exxon will be able to appeal the decision to the full panel of SEC commissioners.
Timothy Smith, director of environment, social and governance shareholder engagement for Boston Trust and Investment Company, said both BP and Royal Dutch Shell are supporting similar shareholder proposals.
“We’re in a very different context today, in terms of investors—including some of the biggest investors in the world—asking companies to be much more thoughtfully integrating climate change issues into their business planning and to assess what the impact of climate change is going to be on them and their shareholders,” he told CLN. “That’s why it’s distressing to watch ExxonMobil say, ‘we don’t even want to see this resolution put on the ballot.’”