New York State Comptroller Thomas DiNapoli has told RI that it is “very likely” that the state’s $210bn public pension fund will vote against Exxon’s directors again this year, if the US oil giant continues to ignore shareholders’ concerns on climate risks.
Di Napoli, who serves as the sole trustee of the New York State Common Retirement Fund, spoke to RI following the announcement that it had put 27 thermal coal mining firms on notice that they face divestment if they are not taking steps to transition to a more sustainable business model – one of of the first steps in the State’s recently announced Climate Action Plan.
One of the companies being targeted, UK-based mining giant Anglo American, reportedly said this week that it would be moving away from thermal coal in the next few years.
New York State’s long-standing Comptroller said of Exxon: “If we see a continued lack of progress it would be very likely that we would vote against the directors [again]”.
His warning to the company comes as the Texas-based firm seeks to block several climate-focused proposals from going to the vote at its annual general meeting in May, using the US Securities and Exchange Commission’s (SEC) ‘no action’ process – a tactic it successfully employed last year.
One of those proposals was filed by US non-profit As You Sow and the Church Commissioners, which manages £8bn in assets on behalf of the Church of England. It asks how the company plans to align its business with the Paris climate agreement. Exxon has requested the proposal be excluded from its proxy statement, on the basis that is seeks to micromanage the company, is “materially false and misleading”, and a strategy has already been substantially implemented.
Last year, Exxon evaded another shareholder proposal on emission reduction targets after the SEC agreed that the proposal could be interpreted as falling foul of the rule on micromanagement.
That resolution was put forward by New York State with the Church Commissioners, which both ‘lead’ on the company as part of Climate Action 100+ (CA100+), the $41trn investor engagement initiative targeting the world’s dirtiest companies.
In response to the decision to reject their resolution, both investors voted against Exxon’s entire board and filed an exempt solicitation at the SEC calling on fellow investors to support another resolution on separating the CEO/ Chair roles at the company, in protest.
Edward Mason, the Church Commissioners’ head of responsible investment told RI that he is “extremely concerned” about Exxon’s position on climate change, describing the situation as a “road block”.
The Commissioners, Mason said, are “liaising closely” with New York State on Exxon before communicating with the wider CA100+ shareholder base in the run up to the annual meeting.
“Essentially Exxon is laying down a challenge to investors, and investors have to think strategically about how to approach this. There are a number of tools we can use and we should be ready to look at everything in the toolbox”, he said