CalPERS and New York funds rally behind Church Commissioners’ climate change resolution at Exxon

Investor momentum building ahead of May 25 AGM

The California Public Employees’ Retirement System and the New York City Pension Funds have urged fellow shareholders in oil giant Exxon Mobil to vote for a proposal on climate change disclosure that was co-filed by the UK’s Church Commissioners and the New York Common Retirement Fund.

It’s the first time the £6.7bn (€8.5bn) Church Commissioners have ever co-filed a resolution in the US, as explained by their Head of Responsible Investment Edward Mason in RI last month.

CalPERS and the New York funds control $433bn in assets and own around 22.5m Exxon shares; they point out that proxy firms ISS and Glass Lewis have already recommended a vote for the resolution (No.12 on the ballot) at Exxon’s AGM on May 25.

Norges Bank Investment Management (NBIM), the arm of the Norwegian central bank which manages the assets of the giant Government Pension Fund, has already announced it would be voting for the motion which is inspired by the ‘Aiming for A’ “supportive but stretching” resolutions that achieved almost unanimous shareholder backing at peers BP, Shell and Statoil last year and at mining firms this AGM season.

CalPERS and the NY funds are also urging support for a resolution on proxy access at the meeting.

In a letter signed by Anne Simpson, Investment Director at CalPERS and Scott Stringer, the New York City Comptroller, the investors say: “We believe investors would benefit from an assessment of Exxon Mobil’s oil and gas reserves under a scenario consistent with the global emissions reduction target defined in the Paris Agreement.”

They say that other leading companies are backing investor proposals on risk reporting that have passed “with overwhelming shareowner support”.And they note that climate risk disclosures are now on the agenda of the government-level Financial Stability Board (FSB), which has set up the high-level Task Force on Climate-related Financial Disclosures. Exxon maintains that its existing climate disclosures are robust.

Separately, CalPERS is urging
shareholder support for the ‘Aiming for A’ resolution, backed by management at commodity and mining firm Glencore, which holds its AGM in Switzerland on May 19.

In a separate development, investors are also being mustered for capital distributions/stranded assets proposals at Exxon and Chevron, which also holds its AGM on May 25, that has been filed by Arjuna Capital, the US SRI firm.

The resolutions call for the companies to commit to increasing the total amount authorized for capital distributions to shareholders as a “prudent use of investor capital in light of the climate change related risks of stranded carbon assets”. The resolutions cite the work of the Carbon Tracker Initiative and recent research from Chatham House, the London-based Royal Institute of Foreign Affairs think tank.

“Prioritizing value over growth in the face of unburnable carbon assets may have a direct impact on the profitability of Exxon and we believe it is in the best interest of shareholders,” said Natasha Lamb, Director of Equity Research & Shareholder Engagement at Arjuna (see her Big Oil needs to shrink article on RI today).

RI is hosting a webinar on the Exxon AGM today, featuring Patrick Doherty of the NYS Office of the State Comptroller, the Church Commissioners’ Edward Mason, CalPERS’ Anne Simpson and Shanna Cleveland of CERES.