US oil giant Exxon Mobil will provide more information about its hydraulic fracturing (fracking), including possible environmental risks, in exchange for 17 investors, including New York City’s five pension funds, agreeing to withdraw a corresponding proposal for Exxon’s annual general meeting (AGM) on May 28.
In a statement, New York City Comptroller Scott Stringer, who administers the five New York schemes, welcomed Exxon’s decision as the result of campaign which has seen fracking disclosure proposals at each Exxon’s last five AGMs. At Exxon’s AGM last year, the proposal gained almost one-third of shareholder votes.
In the proposal for this year’s AGM, the 17 investors noted that shareholder value was at stake, “as leaks, industrial accidents, poor air quality and community impacts from hydraulic fracturing operations raise regulatory and reputational risk” to the company.
Exxon had sought permission from the Securities and Exchange Commission (SEC) to exclude the proposal,arguing that it was an attempt to micromanage the company. The SEC disagreed with Exxon’s view, clearing the way for the proposal to appear on the AGM agenda.
But instead of it being put to a vote, Exxon will disclose more information about its fracking and the possible risks associated with it. In return, the 17 investors have withdrawn their proposal. Exxon spokesman Alan Jeffers told Reuters that such an agreement, rather than a confrontational shareholder vote, was the most constructive way of addressing shareholder concerns about the activity. “The activity is somewhat new and not understood in some parts of the country. People want more information, and the more they know, the better,” Jeffers was quoted saying.
Beyond the five New York schemes, the 17 investors that signed the fracking proposal included corporate responsibility advocacy group As You Sow, Unitarian Universalist Service, Zevin Asset Management and Green Century Capital Management.