Norway's Government Pension Fund Global, Oslo, plans to vote in favor of shareholder proposals at Exxon Mobil Corp. sponsored by major pension funds calling for climate-change reporting and proxy access, said a statement posted on the website of Norges Bank Investment Management, which oversees the assets and proxy voting of the 7.08 trillion Norwegian kroner ($877 billion) fund.
The sovereign wealth fund held 35.3 million Exxon Mobil shares, as of Dec. 31, according to NBIM's 13F filing with the Securities and Exchange Commission. The shares were valued at $3.1 billion in Tuesday's midday trading of Exxon Mobil at $87.93 a share.
The $178.3 billion New York State Common Fund, Albany, sponsored the climate-reporting proposal co-filed by the London-based Church of England, whose assets total £6.7 billion ($9.8 billion); the $51.7 billion University of California Retirement Plan, Oakland; the $4 billion Vermont Retirement Systems, Montpelier; and other institutional investors.
“We encourage companies to consider the sensitivity of their long-term business strategy and profitability to different future regulatory and physical climate scenarios,” the NBIM statement said. “The scenarios should include (considering) the successful implementation of policies to limit the likelihood of temperatures rising above 2 degrees Celsius.”
The New York State Common proposal calls for an annual assessment of long-term impacts of climate-change policies on the company's operations assuming a globally agreed target of a 2-degree Celsius rise in temperatures. The New York state fund held 10.9 million Exxon Mobil shares.
The New York City Retirement Systems, whose combined assets total $154 billion, sponsored the proxy-access proposal, which would enable a shareholder or a group of shareholders that hold a combined 3% of the company's shares for three years to nominate up to 25% of the 14-member Exxon Mobil's board of directors. The New York City pension systems held 7.1 million Exxon Mobil shares.
Another proposal calls for adoption of a company policy to require an independent chairman, phasing in the policy with the transition for the next CEO.
The Norway fund plans to vote against the re-election to the board of Rex W. Tillerson, current chairman and CEO.
Separation of the two roles would “ensure effective monitoring of management, and hence a balance of power in the governance of the company,” the NBIM statement said.
In addition, the Norway sovereign wealth fund plans to vote against shareholder proposals calling for Exxon Mobil to nominate to the board a climate-change expert; hire an investment bank to explore a sale or splitting up of company to enhance shareholder value; report on the compensation of female employees compared to male; report on corporate lobbying activities spending; increase capital distribution to shareholders in the form of increasing dividends and share buybacks in anticipation of climate-change risks leaving stranded assets; adopt a policy to commit the company to support a goal of limiting warming to less than 2 degrees Celsius; report reserve replacements in British thermal units to assist the company in responding to climate-change market risks; and report on the company's hydraulic fracturing operations.
Marthe Skaar, NBIM manager, communications and external relations, said in an e-mail, “We believe that boards should recognize the necessity of integrating climate change-related challenges and opportunities in the investment planning and risk management, and to ensure that responsibility is clearly defined within the organization.”
“We voted for the resolution on 'report on impacts of climate change policies,'” which “also covers the 2-degree scenario and (developing) a strategy and reporting related to this” proposal, Ms. Skaar said.
NBIM plans to vote against Mr. Tillerson's re-election, because “our starting point is that the chairperson should be independent of a company's management.” Ms. Skaar said.
Exxon Mobil has 4.1 billion shares outstanding.
The Exxon Mobil board opposes all the shareholder proposals.
The company's annual meeting is May 25 in Dallas.
