Will climate change impact everyone the same way? What will happen to low-lying populations and vulnerable peoples if warming exceeds 2°C? Are these impacts fair? Mitigating climate change has been called the moral imperative of our generation. But what is our role as responsible investors to address this challenge?
Amid this new moment, with Pope Francis’ encyclical Laudato Si’ presenting a framework for our coexistence with the planet, stating that “the climate is a common good, belonging to all and meant for all,” and the Paris Agreement providing a goal of limiting warming to 2°C or less for the global community to work toward, ExxonMobil investors put the question before the company – must you acknowledge the moral imperative to limit warming to 2°C? Must you recognize this global goal to protect our planet and the people living on it? On May 25th, shareholders of ExxonMobil will have the opportunity to call on their company to join the rest of the world in acknowledging the imperative to keep warming to safe levels by supporting Item 11 on the proxy.
This resolution has striking applicability to ExxonMobil. This is even more appropriate this year amid questions of Exxon’s liability, or at least poor integrity, related to its knowledge about the climate impacts of its core business practices. ExxonMobil is the subject of investigations from multiple state Attorneys General for poor disclosure to investors and the public on what it knew about climate change, and is facing intense public scrutiny for its role in interfering with climate action.
This is not only historic action: even in 2015, ExxonMobil spent $27million on staff, communications, lobbying, and trade associations to undermine policy action on climate change. This strategy has succeeded in keeping the policy agenda on climate change stalled for decades.
Continuing to conduct business in a manner that operates with total disregard for the global crisis of our time is no longer acceptable. In the midst of this new moment of global commitment to action, we need leaders in the energy sector to operate within a model that combines profits with climate goals. Ten of ExxonMobil’s peers, through the Oil and Gas Climate Initiative, have committed to do just that, stating that they “recognize the general ambition to limit global average temperature rise to 2°C,” they “will support the implementation of [clear stable policy frameworks thatare consistent with a 2°C future]”, and they “are committed to playing [their] part.”
My Congregation, the Sisters of St. Dominic of Caldwell, NJ and 34 co-filers representing a cross-section of faith-based investors, health systems, socially responsible asset management firms and indigenous and community groups, with over half of a million ExxonMobil shares, filed this resolution urging ExxonMobil to acknowledge the untold suffering that climate change will cause and take steps to work towards solutions. After surviving a vigorous challenge at the Securities and Exchange Commission (SEC), this unique resolution presents a moral challenge that is hardly a high bar given the stakes: simply join in agreement with the primary goal of the Paris Agreement.
ExxonMobil positions itself as fulfilling a moral imperative to deliver energy to the world’s population as a way to lift people out of poverty. Proponents contend that the moral imperative to limit warming to 2°C is a parallel, and equally important, goal that ExxonMobil must acknowledge. It is time we put an end to the concept that there are no alternatives to fossil fuels capable of lifting people out of poverty or providing energy. Alternative energy sources like solar and wind are already providing light and power to those that coal and gas have been unable to help, without contributing to extreme weather, drought, rising sea levels, crop failure, and accelerated species loss. If ExxonMobil is serious about addressing energy poverty, it also needs to consider the impacts of these climate events on the world’s most vulnerable.
Global reliance on fossil fuels, as anticipated in ExxonMobil’s 2015 Outlook for Energy report, approximates emissions profiles and scenarios that entail warming in excess of 2°C, with devastating consequences for the very people living in energy poverty they purport to be serving. For it is people living in energy poverty – the 1.1 billion people without electricity and 3 billion people without clean cooking facilities – who are not only the least responsible for causing climate change, but who will be the first to suffer and will face the greatest impacts if we do not respond. Future generations who have borne no responsibility for climate change will live with devastating impacts on a forever changed planet. This suffering is not inevitable, if we choose to act quickly and change course.
ExxonMobil faces risks from not planning for a 2°C future and being part of that new model of providing energy, and the first step in such planning is acknowledging the imperative of 2°C as a target. Amid all the controversy facing ExxonMobil, adopting our resolution would have been a form of reputational risk management. Instead, true to form, ExxonMobil’s Board recommends a vote against it. In making this recommendation, the Board is failing to represent the interests of its shareholders, and now it is up to the company’s investors to send the proper signal.We call on all shareholders to support this resolution to send a clear message to ExxonMobil, the largest publicly-traded energy company, that it needs to consider the impacts of its operations on the planet, people, and future generations, and that it must play a constructive role in meeting the commitments outlined in Paris. It is time for ExxonMobil to move forward with the global community of 196 nations and get on the record acknowledging the imperative to limit warming to 2°C.
Sister Patricia Daly is Executive Director of the Tri-State Coalition for Responsible Investment.