Exxon Mobil Corp. is facing pressure on climate change from asset owners and governmental investigators, as well as challenges affecting the entire oil and gas industry.
Asset owners, along with regulators, international banking organizations and signatories of the Paris climate conference agreement — all alarmed by the environmental risks of fossil fuels and the impact on companies — are seeking a transformation of the energy sector.
The $293.6 billion California Public Employees' Retirement System, Sacramento, is working with the $178.3 billion New York State Common Fund, Albany, and the New York City Retirement Systems, with combined assets of $154 billion, on campaigns for two proxy proposals at Exxon Mobil aimed at climate risk. The company's annual meeting is scheduled for May 25 in Dallas.
A climate proposal sponsored by the New York state fund was co-filed by the London-based Church of England, whose assets total £6.7 billion ($9.5 billion); the $51.7 billion University of California Retirement Plan, Oakland; the $4 billion Vermont State Retirement Systems, Montpelier; and other institutional investors.
The proposal seeks an annual assessment of long-term impacts of climate change policies on the company's oil and gas reserves, resources and other operations under a scenario that assumes a global rise in global temperatures of 2 degrees Celsius by 2100.
A proxy access proposal filed by the New York City systems would enable a shareholder or shareholders as a group that holds a combined 3% of the company's shares for three years to nominate up to 25% of Exxon Mobil's 14-member board of directors.
“The case for proxy access is sound and the need for climate risk reporting is urgent,” said Anne Simpson, investment director, global governance, at CalPERS.
Also, Eric T. Schneiderman, New York state attorney general, initiated an investigation of Exxon Mobil in November over alleged misrepresentation on climate change risks disclosures.
Since then, his effort has been joined and expanded by the attorneys general of 16 other states, the District of Columbia and the U.S. Virgin Islands, initiating an investigation into the broader energy industry on “whether fossil fuel companies have misled investors about how climate change impacts their investments and business decisions,” according to a March 29 news release from Mr. Schneiderman.
Suzanne McCarron, Exxon Mobil vice president of public and government affairs, said in a March 29 statement that allegations the company “reached definite conclusions about anthropogenic climate change ... and then withheld it from the broader scientific community” are “preposterous.”
“Exxon Mobil recognizes the risks posed by climate change, and we believe that everyone should be engaged in meaningful action to reduce greenhouse gas emissions,” she said.