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You are here: Home / Featured / Exxon Asks SEC to Block Climate Pressure by Shareholders
Exxon Asks SEC to Block Climate Pressure by Shareholders

Exxon Asks SEC to Block Climate Pressure by Shareholders

February 25, 2019 Filed Under: Featured

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By Karen Savage

Exxon is trying to prevent shareholders from voting on a proposal calling on the oil giant to set and disclose targets for reducing greenhouse gas emissions that would align its business with the goals of the Paris Climate Agreement.

Exxon sent a letter to the Securities and Exchange Commission on Jan. 31 with its plans to omit the shareholder proposal from its 2019 proxy materials and prevent voting on the proposal. It asked the commission to confirm that it will not recommend enforcement action if it does so.

Exxon contends the proposal, which was sponsored by the New York State Common Retirement Fund, the Church of England and dozens of co-filers, is “vague and misleading” and seeks to “micro-manage” the company. It also said those goals have already been disclosed in its 2018 Energy and Carbon Summary.

“Exxon is trying to deny shareholders’ right to vote on a significant climate risk concern,” New York State Comptroller Thomas DiNapoli said in a statement. DiNapoli said Exxon’s opposition to the proposal is “shortsighted and disappointing.”

Exxon was forced to release its 2018 report after shareholders succeeded for the first time in passing a resolution to prompt more climate risk disclosure. In that report,  the company claimed climate change poses “little risk” to its business. Critics said the report omitted disclosure of risks to the global economy from catastrophic climate change, as well of disclosure of the risks of climate change to its own facilities.

In the 2019 Energy and Carbon Report, which was released earlier this month, Exxon said it supports the Paris Climate Agreement, but does not mention the increasing number of climate liability suits Exxon is facing or the lawsuit filed by the New York State attorney general’s office for deceiving investors over climate risks to their investments.

Sponsors of the current proposal are asking Exxon to further that report and “include disclosure of short-, medium- and long-term greenhouse gas targets aligned with the greenhouse gas reduction goals established by the Paris Climate Agreement.”

“Trying to strike out a shareholder proposal from institutional investors with a fiduciary responsibility to manage climate risk is an outdated reflex,” an official for the Church of England fund said in a statement.

The SEC was critical of the company in 2016 for its rejection of an earlier resolution demanding disclosure on climate risk, but last year—after the Energy and Carbon Report was issued—the SEC allowed Exxon to exclude a proposal asking for additional disclosures.

The SEC Division of Corporation Finance is expected to issue an opinion in about 30 days. If it decides in Exxon’s favor and the vote is not required, the proposal’s sponsors can then pursue legal action. If the opinion is that Exxon must allow a vote on the proposal, the company can then appeal to the full panel of SEC commissioners.

With an increased global awareness and concern about the catastrophic effects of climate change, resolutions requiring companies to disclose climate risks are becoming more common.

“We’re in a very different context today, in terms of investors—including some of the biggest investors in the world—asking companies to be much more thoughtfully integrating climate change issues into their business planning and to assess what the impact of climate change is going to be on them and their shareholders,” said Timothy Smith, director of environment, social and governance shareholder engagement for Boston Trust and Investment Company. Smith said both BP and Shell are supportive of similar shareholder proposals.

“That’s why it’s distressing to watch ExxonMobil say ‘we don’t even want to see this resolution put on the ballot.’”

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  1. The Best Way to Fight Climate Change Comes From an Unlikely Place - Naija Leads says:
    March 30, 2019 at 6:02 am

    […] took office, the SEC has consistently ruled in the corporations’ favor. In February, ExxonMobil asked the SEC to nix a climate-oriented shareholder resolution, and a ruling is […]

  2. The Best Way to Fight Climate Change Comes From an Unlikely Place – Qanon Australia says:
    March 30, 2019 at 9:05 am

    […] the SEC has consistently ruled in the corporations’ favor. In February, ExxonMobil asked the SEC to nix a climate-oriented shareholder resolution, and a ruling is […]

  3. The Best Way to Fight Climate Change Comes From an Unlikely Place | The Extinction Chronicles says:
    March 30, 2019 at 4:01 pm

    […] took office, the SEC has consistently ruled in the corporations’ favor. In February, ExxonMobil asked the SEC to nix a climate-oriented shareholder resolution, and a ruling is […]

  4. The Best Way to Fight Climate Change Comes From an Unlikely Place | NoPartySystem.Com says:
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    […] the SEC has consistently ruled in the corporations’ favor. In February, ExxonMobil asked the SEC to nix a climate-oriented shareholder resolution, and a ruling is […]

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    April 9, 2019 at 6:21 pm

    […] took office, the SEC has consistently ruled in the corporations’ favor. In February, ExxonMobil asked the SEC to nix a climate-oriented shareholder resolution, and a ruling is […]

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