Donald Trump's climate change plans rebuffed by Wall Street

Activists hailed a vote by Exxon as a turning point in their decades-long campaign to get oil and gas companies to communicate how they would adapt to a low-carbon economy

Among Exxon’s top investors, Vanguard Group and BlackRock opposed last year's call for climate change reporting (ERIC PIERMONT/AFP/Getty Images)

Major investors put US industry on notice on Wednesday that climate change matters, even as reports emerged that President Donald Trump plans to withdraw the United States from an international pact to fight global warming.

A number of large institutional fund firms including BlackRock, the world's largest asset manager, supported a shareholder resolution calling on Exxon Mobil to share more information about how new technologies and climate change regulations could impact the business of the world's largest publicly traded oil company. The proposal won the support of 62.3 per cent of votes cast.

The victory, on such a wide margin, was hailed by climate activists as a turning point in their decades-long campaign to get oil and gas companies to communicate how they would adapt to a low-carbon economy.

With major investors now seeing climate change as a major risk, activists said US corporations will have to be more transparent about the impact of a warming planet even if the United States withdraws from the 2015 Paris climate accord, as Mr Trump promised during his presidential campaign.

“Economic forces are outrunning any other considerations,” said Anne Simpson, investment director for sustainability at the California Public Employees' Retirement System, one of the sponsors of the resolution.

She credited big investors in Exxon for the change, since at least some of them switched their votes after last year when a similar measure won just 38 per cent support.

“We have seen a sea change in their viewpoint,” she said. Many top investors now consider their votes on shareholder proposals “on merit, rather than considering it a test of loyalty to management,” she said.

Among Exxon’s top investors, Vanguard Group and BlackRock opposed last year's call for climate change reporting. A spokeswoman for Vanguard, which has about 7 per cent of Exxon's shares, declined to comment on its voting this year.

A person familiar with the matter said funds run by BlackRock, which holds about 6 per cent of Exxon shares, voted in favour of the climate resolution.

Filings showing their exact votes are not due for months. But both fund firms and others have taken steps since last year to make it easier to support climate resolutions.

A spokesman for Exxon's ninth-largest investor Northern Trust, Doug Holt, said it voted in favour of the proposal, citing its own guidelines updated in 2016.

The vote from the street

The investment firms' approach reflects a new interest in climate matters among their own investors, who have stuffed money into so-called “green” mutual funds and other vehicles that use environmental factors in their stockpicking.

Wall Street's priorities have shifted the terms of debate at a number of other energy and utility companies. A majority of shareholders voting at Occidental Petroleum and PPL called for similar reports on the risks of climate change. Votes on two more of the measures are scheduled for 7 June at Devon Energy and at Hess.

Michael Crosby, involved in corporate outreach for the Midwest Capuchin Franciscans, a religious order, said Wednesday's vote was a rejection of Exxon's arguments it already provides enough detail on its outlook.

“The Street is saying, you have to give better evidence,” Mr Crosby said.

After the measure passed, Exxon chief executive officer Darren Woods said its board would reconsider its climate communications.

The activists now face the task of maintaining alliances with leaders like Mr Woods who opposed their resolutions but who in some cases support the 195-nation Paris agreement. Exxon said in a 22 March letter to the White House that the Paris deal is “an effective framework for addressing the risks of climate change.”

Trump had at least one ally at Exxon's meeting in Dallas, Steven Milloy of Potomac, Maryland, who urged other investors to support his resolution that would make it harder to file proposals like the one on climate change.

Milloy said management should show less concerns for climate issues, which he called misplaced, and cited Mr Trump as a model. “For the first time we have a president who actively opposes climate hysteria,” Mr Milloy said.

According to Exxon, Mr Milloy's proposal received support from 1.6 per cent of votes cast.

Reuters