Exxon shareholders launch fight against Directors over Climate Proposal

A group of Exxon Mobil shareholders launched a proxy fight against the oil company’s directors after failing to get a climate proposal on to the ballot for the company’s annual meeting.

The New York State Common Retirement Fund, led by

New York state comptroller Thomas DiNapoli, and the Church of England said they would vote against all Exxon directors at the company’s May 29 annual meeting and urged other shareholders to consider doing the same.

Exxon’s “inadequate response to climate change constitutes a serious failure of corporate governance” they said in a filing on Friday.

The investors, who said they are acting with the Climate Action 100+ group of investors who oversee $32-trillion in assets, also urged shareholders to vote in favour of proposals for an independent chair, the establishment of a climate change board committee and a report on lobbying.

Scott Silvestri, an Exxon spokesperson, pointed to the company’s proxy statement in which the board recommended that shareholders vote against the investor proposals. In the proxy filing, the company said its full board holds at least one session each year dedicated to climate issues.

The shareholders said they have been engaging with Exxon on climate change and its greenhouse gas emissions since 2005 and the company has “failed to respond adequately” in contrast to peers such as BP, Chevron, Royal Dutch Shell and Total.

Pressure to divest

New York State’s pension fund, which holds about 10-million shares of Exxon, has faced pressure from state legislators and New York governor Andrew Cuomo to divest its holdings of Exxon and other fossil fuel companies. DiNapoli has resisted, saying that he will prefer to engage with the company due to its economic importance.

The New York fund and the Church of England in 2017 led a climate shareholder proposal at Exxon that was backed by more than two-thirds of shareholders and required the company to produce a detailed report on how climate change affects its business. The shareholders were disappointed with the report, so have continued to press the company to set greenhouse gas reduction targets.

“Exxon’s board’s refusal to adequately address significant shareholder concerns and properly account for climate risk in its operations, even as its competitors do so, presents a governance crisis,” DiNapoli said.

• Bloomberg