New York State Comptroller Thomas P. DiNapoli and the Church Commissioners of England are pushing a shareholder resolution against ExxonMobil, with the help of a consortium of other large institutional investors. In total, they have about $1.9 trillion in assets.
The proposal demands the oil giant announce greenhouse gas reduction targets to keep the company’s practices in line with the Paris Accords, which seek to control the global average temperature and reduce its carbon footprint.
“ExxonMobil’s lack of GHG emissions reduction targets puts it at odds with its industry peers that have taken such steps,” said DiNapoli, who is the trustee of the $207.4 billion New York State Common Retirement Fund. “The world is transitioning to a lower carbon future and Exxon needs to demonstrate its ability to adapt or risk its bottom line along with investors’ confidence.”
The resolution wants ExxonMobil to set short-, medium-, and long-term targets for the gas reductions, following in the footsteps of fellow oil barons Royal Dutch Shell and Total, which have begun setting these targets following shareholder engagement from institutions.
Edward Mason, head of responsible investment for the Church Commissioners, the Church of England’s investment arm, wants the business to “develop a clear strategy for long-term sustainability” while keeping up with the Paris Agreement’s requests. “While we have been pleased to see ExxonMobil start to address the impact of climate change on its business over the past two years, the company has much more to do. Our request would bring Exxon in line with its biggest European peer, Shell, and we believe the board can and should support it.”
The proposal was developed with the expectations of the Climate Action 100+ initiative, a group of global investors pressuring the largest oil organizations to take the action to keep their end of the Paris bargain. The group represents 310 investors with more than $32 trillion in assets under management. It is the largest shareholder engagement initiative on climate change.
“As the use of zero- and low-carbon technology increases due to technical breakthroughs and decreasing costs, and as governments take steps to limit greenhouse gas emissions, fossil fuel companies face enhanced risk,” reads the proposal. “These trends could limit returns to ExxonMobil’s investors by increasing the company’s operating costs or by reducing demand for its products.”
The resolution is expected to be voted on at ExxonMobil’s annual shareholder meeting next spring.
ExxonMobil could not be reached for comment.