27

Jun

2016

Exxon AGM prompts calls for Church of England divestment

 

Following the recent ExxonMobil AGM, at which shareholders rejected all resolutions on climate change including one proposed by the Church Commissioners, calls have been growing for the Church of England to divest from fossil fuel companies, starting with Exxon.

The Church Times has published a series of letters calling on the Church of England to divest from fossil fuel companies, as well as a response from Edward Mason, Head of Responsible Investment for the Church Commissioners, outlining their position. We republish those letters here.

These letters were first published by the Church Times: www.churchtimes.co.uk

Shareholder engagement with ExxonMobil
From the Revd Hugh Lee

Sir, — On 25 May, shareholders at ExxonMobil rejected all climate resolutions at its annual meeting in Dallas, as they were recommended to do by the company’s Board of Directors. This poses serious questions about the effectiveness of the engagement approach pursued by the Church of England and some other investors.

Recent investigations revealed that Exxon knew about climate change as far back as the 1970s, and yet poured resources into publicly denying climate change for years. It is now under investigation by the FBI, at the request of the Department for Justice.

Now, Exxon has once again demonstrated its unwillingness to change, even in the light of the Paris Agreement. The resolution proposed by the Church Commissioners, which called on Exxon to report on the impacts of climate-change policies on their business, was rejected by 61.8 per cent of shareholders. In an even bigger setback, 81 per cent of shareholders rejected a resolution to limit global warming to 2°C.

A huge number of investors have already decided to divest from Exxon, including the Rockefeller Family Fund, which called the company’s actions “morally reprehensible”. The Church of England should do the same. In the case of ExxonMobil, it is clear that the Church Commissioners’ policy of engagement — while well intentioned — simply has not worked.

The world cannot wait for Exxon to wake up to reality on climate change, which is already upon us and will intensify rapidly. It is time for the Church of England to divest from fossil fuels and invest in renewable energy in line with its fifth mark of mission, “to strive to safeguard the integrity of creation and sustain and renew the life of the earth”.

HUGH LEE
Member of General Synod 2000-2015

The Church Commissioners and ExxonMobil
From Mr Edward Mason

Sir, — The Revd Hugh Lee contends that shareholder engagement with ExxonMobil on climate change has failed and that divestment would be the better option (Letters, 3 June). The Church Commissioners do not agree.

Significant progress is being made by shareholders on climate change with the oil and gas majors. After shareholder engagement in which the Church Commissioners have played a great part, BP, Shell, Statoil, and Total have all agreed to provide detailed annual reporting on their strategic response to the risks and opportunities posed by the transition to a low-carbon economy. We are already seeing changes in their approach to public policy, capital allocation, and low-carbon opportunities.

US companies, including Exxon, are outliers. The Commissioners are at the forefront of investors pressing them to change. The resolution we proposed at the company’s AGM in May was backed by investors with more than $10 trillion of assets, and saw the highest ever vote against management (38 per cent) on a resolution on climate change at Exxon. While not a majority, it was a major shareholder revolt, which should be heeded.

The Commissioners believe that both divestment and engagement have a part to play in promoting transition to a low-carbon economy. We have already divested from companies specialising in the highest-carbon fossil fuels — thermal coal and oil sands. Our climate-change policy includes the option of further divestment. But with Exxon under more shareholder pressure than ever before, now is not the moment to call time and sell our shares to another investor that may have no interest in mobilising action on climate change.

There is no magic bullet that the Commissioners or any other investor can deploy to create a low-carbon economy. Sustained work over many years is needed from all of us. Under our climate-change policy, we are committed to a comprehensive effort involving corporate- and public-policy engagement, low-carbon investment, and divestment, while managing the Church’s endowment for our beneficiaries in a responsible way. We intend to be in this for the long haul.

EDWARD MASON
Head of Responsible Investment, Church Commissioners

The Church Commissioners and ExxonMobil
From the Revd Chris Halliwell

Sir, — Edward Mason contends that the Church Commissioners should continue their policy of engagement with oil and gas companies such as ExxonMobil, in spite of shareholders rejecting all climate-change resolutions at the company’s recent AGM (Letters, 10 June). Operation Noah disagrees with this view.

Whatever attempts are made to portray a positive outcome, it cannot be denied that nearly two-thirds of Exxon shareholders rejected the resolution proposed by the Church Commissioners.

Will the threat of divestment possibly be taken seriously if, as in the case of Exxon, the Church Commissioners continue to invest in such companies despite both the Board of Directors and shareholders rejecting their demands?

Exxon will not change its stripes. It has rejected every shareholder resolution on climate change since 1990 — as recommended by the company’s Board of Directors. The Church Commissioners’ views are simply being ignored.

Mr Mason states that the Church Commissioners intend to be involved in shareholder activism for the long haul. Yet there is no time to lose on the issue of climate change.

The Church of England must “align its financial assets with its spiritual assets”, as Christiana Figueres has called on religious institutions to do. It should divest from ExxonMobil immediately, and use the funds to support the transition to a zero-carbon future by investing in clean, renewable energy.

CHRIS HALLIWELL
Vice-chair, Operation Noah