Shareholders vote for ExxonMobil transparency on climate impact

June 01, 2017 | 09:12

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NEW YORK: ExxonMobil's shareholders voted decisively on Wednesday (May 31) to push the oil giant to test how the fight against global warming could affect its business, handing a victory to environmentalists at a critical juncture for climate policy worldwide.

Oil giant ExxonMobil is facing increasing pressure from shareholders to account for the cost of climate change policy, and invest more in renewable energy. (AFP/SPENCER PLATT)

The proposal, backed by 62.3 per cent of shareholders, urges Exxon to come clean on what tougher public policies - in line with the Paris accord on curbing global emissions - would mean for its portfolio.

The advisory vote came as President Donald Trump weighs whether to pull the United States out of the Paris agreement.

Exxon chief executive Darren Woods, who praised the Paris accord but argued the shareholder proposal was unnecessary, said the oil giant would consider its policy position in light of the vote.

Exxon has for years successfully beaten back previous shareholder votes on climate change, but some leading institutional investors signaled they were considering changing their stance following pressure from activist investors.

Environmentalists have argued that Exxon's petroleum-dominated portfolio could become uneconomic under tougher climate policies, and the company has not thoroughly analysed this risk. They call on Exxon to invest more in renewable energy and less in oil.

The proposal, submitted by the New York State Common Retirement Fund, seeks an annual assessment of Exxon's assets under different policy scenarios, including those that limit temperature increases to under two degrees Celsius, consistent with the 2015 Paris accord.

Exxon had argued that its planning already took into account the possibility for stricter climate policies and that oil would remain a vital source of global energy for years to come, even under the toughest policy scenarios.

Woods said during his presentation at the meeting, that even under the Paris accords, some US$11 trillion in new oil investment would be needed.

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