The $207.4 billion New York State Common Retirement Fund (NYSCRF), and The Church Commissioners for England (CCE), the Church of England’s £8.3 billion ($10.9 billion) endowment fund, are withholding their support for all ExxonMobil directors seeking re-election in protest over its “inadequate response” to climate change.
“ExxonMobil’s inadequate response to climate change constitutes a serious failure of corporate governance to which shareholders should respond firmly,” the two funds said in an SEC filing. “The fund and the Church Commissioners believe that at this time, ExxonMobil would be better able to face its challenges, including those posed by climate change, and to relate to its shareholders, with an independent chairman.”
The pension funds complained that ExxonMobil has no business-wide targets for greenhouse gas emissions reductions at its own operations; does not disclose the greenhouse gas emissions associated with the use of its products; and offers no guidance on its goal to reduce over time the greenhouse gas emissions associated with the use of its products.
In addition to withholding their support of all ExxonMobil directors, the two funds encouraged other ExxonMobil shareholders to also vote against the slate of 10 board candidates Exxon recommends its shareholders vote for in its 2019 proxy statement.
The funds also said that “because climate change poses a threat to the long-term viability of the company,” they are voting for item 7, which proposes that the board of directors create a committee on climate change. The committee would “evaluate Exxon Mobil’s strategic vision and responses to climate change, and better inform board decision making on climate issues,” according to the proxy statement.
The NYSCRF and CCE are also voting for item 10 on the proxy card, which proposes an annual report that will disclose company policy and procedures governing lobbying. The report would also divulge payments by ExxonMobil used for direct or indirect lobbying, or grassroots lobbying communications. And it would include a description of management and the board’s decision-making process and oversight for making the payments.
“Exxon’s board’s refusal to adequately address significant shareholder concerns and properly account for climate risk in its operations, even as its competitors do so, presents a governance crisis,” New York State Comptroller Thomas DiNapoli, said in a release. “Exxon’s failure to demonstrate it is prepared to take steps toward the transition to a lower carbon future puts its business at risk. We encourage other investors to join us in voting to separate the roles of chair and CEO.”