Exxon investors vote for report on climate impact to reserves

 

A file photo of protestors outside Exxon Mobil’s annual meeting in Dallas in 2014.

DALLAS — Exxon Mobil investors passed a resolution on Wednesday asking the company to publish an annual report on the impact of climate change policies on the value of its sprawling oil and gas operations.

At the oil company’s annual meeting in Dallas, 62.3 percent of shareholders voted in favor of the non-binding proposal; 37.7 percent voted against it. It’s a historic vote for investors who have failed to pass the vast majority of the climate-related shareholder resolutions put forward in recent years.

The resolution called for Exxon to publish an assessment of how global climate change policies — including the Paris climate accords that aim to limit rising temperatures — will affect the value of its oil and gas reserve over the next quarter century. Investors said the report should analyze scenarios in which energy demand falls because of carbon restrictions.

Exxon opposed the resolution. The investor vote in favor the proposal comes as the Trump Administration weighs whether the United States should break with the Paris climate accords. Exxon has supported the United States remaining in the pact.

The same proposal failed to pass in its first appearance last year, garnering just 38 percent of the vote. But Edward Mason, an investment head for the Church of England’s endowment, said the proposal this year was supported by powerful investors.

“I didn’t expect to be here again this year presenting the same proposal, this time filed by investors with $5 trillion in assets under management,” Mason said.

Related: Exxon to clash with climate activists, investors at annual gathering

Those investors included the New York State Common Retirement Fund and the Church Commissioners for England. New York State Comptroller Thomas DiNapoli called the vote an “unprecedented victory” for investors “in the fight to ensure a smooth transition to a low-carbon economy.”

“Climate change is a risk to the core business of ExxonMobil, and the burden is now on the company to show that it is responsive to shareholder concerns,” DiNapoli said.

Darren Woods, Exxon’s new CEO, argued Exxon already believes it has made an assessment of the financial risk of climate change policies to its energy reserves, as part of its annual energy outlook report that forecasts a 25 percent increase in energy demand by 2040.

That scenario assumes increasingly stringent climate policies in coming years. Even so, under forecasting models laid out by the International Energy Agency, the world will need $11 trillion in oil and gas investments to meet growing energy demand, he said.

“We confident in the long-term viability of our portfolio,” Woods said.

None of the other shareholder resolutions passed. Those included proposals on the transparency of compensation for women, lobbying expenditures and methane emissions.

Shareholders passed the board’s resolution on executive compensation with  68.4 percent of the vote.

Related: In 2016 vote, Exxon shareholders defeat most shareholder proposals

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