green and sustainable business

ExxonMobil: SEC says vote! vote!

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exxonmobil_greenpeaceEnvironmental Leader reported last week on a Securities and Exchange Commission ruling that ExxonMobil must allow its shareholders to vote on a climate change resolution.

That would be a first for the oil major, which has consistently denied or avoided shareholder votes on resolutions designed to determine the long-term impacts of its business decisions on climate, and perhaps force—or shame—it to make changes. If that all seems rather nebulous and, in the end, pointless—given Exxon’s business model (oil exploration and production)—it’s because it is. But it might be a small step in the right direction for a company that has lied (or covered up) for decades about what it knew about climate change and that continues to fund climate science deniers.

The latest resolution that shareholders will vote on at its annual meeting in May would force the oil giant to disclose how climate change would affect its business. According to the EL report, New York comptroller Thomas P. DiNapoli co-filed the shareholder proposal in December, asking Exxon to publish an annual assessment of the long-term portfolio impacts of climate change policies.

Exxon tried to block shareholders from voting on the proposal: a letter to the SEC from Exxon’s attorneys said resolution was too vague and Exxon already provides its investors with sufficient information about how it manages its carbon-related risks. The letter cites Exxon’s 2014 report, Energy and Carbon — Managing the Risks.

But the SEC rejected Exxon’s request to block the DiNapoli’s proposal from the shareholder vote. “We are unable to conclude that the proposal is so inherently vague or indefinite that neither the shareholders voting on the proposal, nor the company in implementing the proposal, would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires,” the SEC wrote in a March 22 letter.

Exxon already is under investigation by New York’s attorney general, Eric T. Schneiderman, for allegedly lying to the public and investors about climate change risks.

EL said a statement from Exxon spokesperson Alan Jeffers did not comment directly on the SEC ruling. Jeffers emailed a statement to EL that said: “We will provide the board’s position on the shareholder resolutions in our proxy document, which will be distributed to shareholders next month.”

DiNapoli was quoted as calling the SEC the ruling a “major victory.” In a statement he said: “Investors need to know if ExxonMobil is taking necessary steps to prepare for a lower carbon future, particularly now in the wake of the Paris agreement.”

So it’s a world where even taking a vote on such a resolution is considered a victory – but seriously, are its shareholders likely to pass something that would likely reduce the value of their shares?

For the long-term however, it signals that investors no longer have to be in the dark about how their companies assess and account for climate change in their business decisions.

Image: ExxonMobil: High Earnings, Low Taxes, No Ethics by Greenpeace via Flickr CC


Written by William DiBenedetto

28 March, 2016 at 7:30 am

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