Investors Press ExxonMobil for Climate Change Transparency

A coalition of institutional shareholders representing $300 billion in assets has demanded ExxonMobil keep up with its competitors and disclose how it is preparing for a low-carbon future.

Investors led by the New York State Common Retirement Fund and Church Commissioners for England have urged ExxonMobil to come clean about its long-term business model following the Paris Agreement on climate change.

“As shareholders, we want to know that Exxon is doing what is needed to prepare for a future with lower carbon emissions.”The coalition includes the University of California’s pension, Vermont State Employees’ Retirement System, and the Brainerd Foundation. Together, they represent a total of $300 billion in assets and own more than $1 billion of Exxon stock, or 0.3% of the company. 

“As shareholders, we want to know that Exxon is doing what is needed to prepare for a future with lower carbon emissions,” said Thomas DiNapoli, New York state comptroller and sole fiduciary of the $184.5 billion pension fund.

The resolution pushes for ExxonMobil to assess the business impact of the Paris Agreement’s restriction on global warming to below two degrees Celsius “through, and beyond, 2040.” Included in the oil giant’s soul searching, according to the group, should be the potential for reduced demand for fossil fuels.

“Climate change presents major challenges to corporate governance, sustainability, and ultimately profitability at ExxonMobil,” said Edward Mason, Church Commissioners’ head of responsible investment.

The £6.7 billion ($9.5 billion) faith-based group called for “more transparency and reporting” from ExxonMobil on its process for assessing risks and opportunities.

The shareholders added that Exxon competitors Shell and BP have already agreed last year to reveal how they will be affected by lower greenhouse gas emissions, driven by a similar proposal led by the Church of England.

In April 2015, more than 50 institutional investors worldwide—including the California Public Employees’ Retirement System, Norges Bank Investment Management, various UK public pensions, and Sweden’s AP funds—called for BP to position its asset portfolio for transitioning away from carbon-intensive energy.

Nearly 60 US investors also asked the US Securities and Exchange Commission in April to require oil and natural gas companies to publish “meaningful, substantive carbon asset risk disclosures.”

Related: Sustainable Power; Church of England to Dump Thermal Coal, Oil Sand Investments; The Fine Art of Shareholder Engagement

By Sage Um

«