13

Dec

2017

Exxon announcement on climate reporting: too little, too late

 

On Tuesday 12 December, ExxonMobil finally responded to shareholder pressure following a resolution passed at the company’s AGM in May 2017, announcing that it would report on the impact of climate policies on its business operations.

The announcement came on the second anniversary of the Paris Agreement, which the company publicly supports, although its actions have suggested otherwise. Exxon’s Board of Directors had urged shareholders to vote against the resolution on climate risk disclosure, a resolution that was supported by the Church of England and other investors after a similar resolution was rejected by company shareholders in 2016.

While this means that ExxonMobil will report on the impact of climate policies on its business operations, it does not mean that the company will consider the impact of its core business in contributing to climate change. Similar resolutions were passed at the BP and Shell AGMs in 2015, yet neither company has made firm commitments to reduce their own carbon emissions.

Edward Mason, Head of Responsible Investment for the Church Commissioners, responded positively to the announcement: ‘We welcome ExxonMobil’s commitment to implement the resolution passed earlier this year and disclose the impact of measures to combat climate change on its portfolio. Climate change is one of the most significant long-term risks investors face, and it is essential that companies confront the challenge that it poses. We look forward to continuing to work with Exxon and others on this issue.’

Other shareholders, however, were less positive. Tim Smith, who leads shareholder engagement at Walden Asset Management, one of the co-filers of the resolution, expressed disappointment that Exxon’s statement provides ‘no detail’ and ‘needs to be expanded to assure shareowners’.

Last month, five Church of England Bishops were among the signatories of a letter calling on Church investors to immediately divest from ExxonMobil. They wrote that ‘time is running out to prevent the worst impacts of climate change’ and that the Church of England is ‘uniquely placed to show moral leadership through its investment policies’.

Operation Noah has been calling on the Church of England to divest from ExxonMobil, as we believe it is unethical for Churches to continue to invest in fossil fuels. Not only has Exxon’s Board of Directors rejected all resolutions on climate change since 1990, but a recent Harvard academic study shows that Exxon knew about the risks of climate change in the 1970s, yet misled the public for decades.

Kathy Mulvey, Climate Accountability Campaign Manager at the Union of Concerned Scientists in the US, highlighted several climate-related issues that the company has not yet addressed: ‘Climate-induced flooding at its refineries, lawsuits by municipalities seeking to recover costs of adapting to climate-related sea level rise, the fact that its oil and gas reserves may never be recoverable, and ongoing investigations by state attorneys general who charge the company deceived its investors about the reality and seriousness of climate change.’

James Buchanan, Bright Now Campaign Manager for Operation Noah, said: ‘Exxon has agreed to analyse the impact of climate policies on its business operations. We believe it must look at the impact of its business on climate change. Given its track record, shareholder engagement will not work with ExxonMobil. The Church of England should divest from Exxon now.’

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