Investors disappointed with ExxonMobil climate report seek to speak at AGM

Investors disappointed with ExxonMobil’s response to them about the climate change challenges it faces have asked to speak at the oil major’s annual shareholder meeting next month.

The company had agreed to report on climate change assumptions used in strategic planning in return for investors the Christopher Reynolds Foundation and Zevin Asset Management withdrawing a resolution on the issue earlier this year.

This led to a report on ‘Energy and Climate’ which Exxon published at the end of last month.

Exxon also published a separate report called ‘Energy and Carbon – Managing the Risks’ following agreement with sustainability investing boutique Arjuna Capital and advocacy group As You Sow. This was seen as a turning point in getting a major fossil fuel company to engage with climate change. But Exxon’s disclosures underwhelmed investors and now the Christopher Reynolds Foundation has issued an open letter outlining a range of concerns with the ‘Energy and Climate’ report. The foundation says it withdrew its resolution in January “in good faith”.
The letter, from the foundation’s Stephen Viederman to David Rosenthal, Exxon’s Vice President of Investor Relations, says there are three main issues that hadbeen raised in the dialogue which ExxonMobil does not address.
Firstly, the report is “vague” around its core assumptions (‘Plan A’). “Exxon is a well-managed company and we are certain that alternative scenarios are being considered,” writes Viederman. And there is no discussion of a potential ‘Plan B’ that was referred to by Exxon’s CEO Rex Tillerson at a speech last year.
Another issue is Exxon’s membership of organisations such as the U.S. Chamber of Commerce whose position on climate change apparently differs from Exxon – given that Tillerson is on record as saying rising emissions will have a warming impact.
The third issue deals with the company’s models for emissions beyond 2040, with the letter saying Exxon’s “failure to provide more detail on their understanding of the costs of inaction on climate change is a major shortcoming”.
The letter concludes with a reference to the usefulness of previous dialogues: “In this same spirit, we ask that you provide your written response to this letter in a timely fashion. Finally, we also want to reiterate our request to speak at the annual meeting.” The AGM takes place on May 28.