Exxon Mobil on Monday said it would publish new details about how climate change could affect its business in a move aimed at appeasing critics and forestalling another proxy fight next year.
The largest US oil and gas producer said in a filing to US securities regulators that its board agreed to provide shareholders with information on “energy demand sensitivities, implications of two degree Celsius scenarios, and positioning for a lower-carbon future.”
Scientists have warned that world temperatures are likely to rise by more than 2C this century, surpassing a “tipping point” that a global climate deal aims to avert.
Exxon’s statement, which came three days before the deadline for its 2018 annual meeting resolution submissions, said additional information would be released in the near future, but did not provide details. The company’s board originally opposed providing shareholders with a report outlining the potential impact of global warming on Exxon’s long-term outlook.
Thomas DiNapoli, New York state’s comptroller, heads one the two lead sponsors of a shareholder resolution calling for Exxon to issue a climate-impact report. He called Monday’s decision “a win for shareholders and for the company’s ability to manage risk.”
However, another sponsor noted the lack of specificity in the company’s statement. “This is giving no detail,” said Tim Smith, who leads shareholder engagement efforts at Walden Asset Management, a co-filer of last spring’s resolution. He said Exxon’s statement “needs to be expanded to assure shareowners that they’re responsive to last year’s request.”
An Exxon spokesman declined to comment beyond the filing.
Some 50 shareholder and climate activists earlier this year demanded the company produce an annual report on the risks to its business from extreme climate and government policies seeking to reduce carbon emissions. The resolution was backed by 62 per cent of shares voted in Exxon’s May annual meeting.
Other energy companies already have begun detailing their view of climate-related risks to their businesses. Refiner Marathon Petroleum Corp recently published a report, “Perspectives on Climate-Related Scenarios,” meant partly to address suggestions from the global Financial Stability Board about how to measure and respond to such risks.
Members of the shareholder group had said they were considering refiling had Exxon not agreed to a detailed plan. Big investors including BlackRock Inc and Vanguard Group backed the May resolution and have made climate change a priority in their governance efforts.
BlackRock and Vanguard representatives last week declined to comment on their outreach to Exxon.
The report will carry weight beyond the company’s next shareholder meeting. Exxon faces investigations by the Massachusetts and New York attorneys general into whether it has misled the public and investors by soft-pedaling climate change risks. Exxon has described the probes as politically motivated and intended to force it and others to change their positions on climate change.
The big funds would likely cast more critical votes in 2018 if Exxon did not respond adequately to the resolution, Jason Malinowski, chief investment officer for the Seattle City Employees’ Retirement System, which has about 115,000 Exxon shares, said on Friday.
Malinowski’s agency and leaders of two other pension funds separately have asked Exxon director Steven Reinemund to discuss governance reforms, such as changing pay programs and bringing in directors with “climate-competent” perspectives.
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