Last week, environmental activists upped the pressure on ExxonMobil and Chevron shareholders to pass extreme resolutions on climate change. Shareholders sent a clear message: no thanks.
Chevron’s shareholder meeting included two climate resolutions: a measure to create a new board committee on climate and another demanding the creation of a report tracking Chevron’s emissions against the Paris Climate Accord. Both failed.
At Exxon’s 2019 shareholder meeting, one shareholder resolution could only muster about seven percent of available shareholder votes. The meeting included two other failed climate resolutions: one resolution called for a report on climate risk on Gulf Coast petrochemical operations, and the other resolution advocated for an independent chairperson. The latter resolution was jointly submitted by the Church of England and New York State Common Retirement Fund, after their original motion was dismissed by the SEC as an attempt to micromanage the company.
In a statement released ahead of their annual meeting, Exxon made clear that while they are committed to listening to shareholders, they will not be held hostage by overreaching demands:
“Over the past year, we engaged in detailed discussions with the Church of England and New York State Common Retirement Fund on three separate occasions, including an in-person meeting just a few months ago. While their perspectives were carefully and respectfully considered, the Board viewed matters differently, and followed the SEC’s established process.
We respect their right to disagree but believe their campaign urging other shareholders to vote against the Board and to change the company’s governance structure by separating the roles of chairman and CEO is unwarranted.”
The climate resolutions that have been put forth by activist investors and public pension fund managers are looking not to improve the company’s management, but to drive their own political agenda.
In fact, neither Chevron’s or Exxon’s management dismiss the risks posed by climate change or the need for the companies to take action to address those risks. According to the Financial Times: “Mr. Woods [CEO of ExxonMobil] told investors that the company agreed with the principles underlying those proposals, and disagreed only on ‘the best means of achieving these objectives.’”
Woods further explained his vision for Exxon in addressing the company’s role in reducing climate change risks:
“‘The world needs additional solutions, and that’s where we think we can add significant value,’ he said. ‘We are doing our part to address society’s dual challenge’ of providing affordable energy while reducing environmental impacts.”
Exxon has already publicly announced its goals to fight climate change. Since 2000, Exxon has invested over $9 billion to reduce emissions across its operations. In its efforts, the company has also been researching algae-based biofuels, invested in carbon capture technology, and advocated for a carbon tax.
After years of failure, 350.org has been trying to revive the #ExxonKnew campaign.
EID recently reported that the co-founder of 350.org, long a proponent of the #ExxonKnew campaign, attempted to make waves with a chart from a report that Marvin B. Glaser, a former Environmental Affairs Manager at Exxon, wrote to brief a group of employees on the greenhouse effect – in 1982. EID noted the chart came from compilation of foundational climate science studies, not secret Exxon R&D. Undeterred by the facts, 350.org is continuing its anti-fossil fuel effort.
The New York State Common Retirement Fund (led by Comptroller DiNapoli) has been the target of the fossil-fuel divestment movement. It has been called for by the likes of New York Gov. Andrew Cuomo and various environmental activists. However, a report commissioned by the Independent Petroleum Association of America found fossil fuel divestment by New York and retirement funds could result in shortfalls totaling up to $198 million per year.
The results from last week’s annual general meetings at Exxon and Chevron show that activist investors who are pushing a political agenda are abusing the shareholder proposal process, which is supposed to be an opportunity for shareholders to offer ideas on how the companies they own can successfully grow and increase returns. Unfortunately, these investors seemingly only own these companies to push them to act on their political priorities and ultimately stifle growth and hurt other shareholders. Meanwhile, the targeted companies are taking concrete actions to reduce their greenhouse gas emissions and meet the demand for energy we all rely on.