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SEC clears Exxon Mobil to exclude shareholder proposal on greenhouse gas targets

Exxon Mobil Corp. was cleared Tuesday by the SEC to block a shareholder resolution over disclosing and setting greenhouse gas reduction targets starting in 2020, saying that the mandate would result in micromanagement.

The resolution was filed in December by a group of institutional investors led by the New York State Common Retirement Fund and the Church of England's investment fund. At the time, Thomas P. DiNapoli, the New York State comptroller and sole trustee of the $204.4 billion pension fund, said the energy company's lack of targets for greenhouse gas emissions put it at odds with industry peers and that institutional investors with combined assets of $1.9 trillion supported the resolution.

In an letter to Exxon Mobil, SEC Special Counsel Courtney Haseley said the agency would not take action against the company for excluding the shareholder proposal. "In our view, the proposal would require the company to adopt targets aligned with the goals of the Paris climate agreement. By imposing this requirement, the proposal would micromanage the company by seeking to impose specific methods for implementing complex policies in place of the ongoing judgments of management as overseen by its board of directors," the letter said.

In a statement Wednesday, Mr. DiNapoli disputed the SEC staff determination that the proposal would micromanage the company. "We are asking the company to disclose its plans to address a long-term threat to its business. Exxon's refusal to disclose targets aligned with the Paris Agreement puts it increasingly at odds with its industry peers, who are publicly adopting goals and greater transparency as they address the transition to a lower carbon economy."

Mr. DiNapoli called the SEC ruling "a bump in the road," but vowed to continue pressing Exxon and other companies on climate risk.

A spokesman for the Church Commissioners, Church of England £8.3 billion ($10.6 billion) investment fund said it is reviewing its options and in a statement called the SEC action "a disappointing and puzzling decision that enables Exxon to close down interaction with its shareholders on climate-related strategy."

"Exxon is continuing to misjudge the mood of investors on climate risk and the fact remains that at present the company is providing no assurance that it has a strategy consistent with the goals of the Paris Agreement," the church statement added.

Exxon Mobil did not immediately respond to a request for comment.