SEC says Exxon, Chevron must put climate proposal to shareholders

(AP Photo/Kathy Matheson)
(AP Photo/Kathy Matheson)

The U.S. Securities and Exchange Commission has decided U.S. oil giants Exxon Mobil and Chevron must allow a shareholder vote on a proposal they conduct analysis on the financial impact of climate change regulation on their operations.

In letters dated this week, attorneys at the agency rejected the companies’ arguments the requests were too vague or had already been met, giving a victory to shareholder advocates that have put increasing pressure on the oil industry on climate change.

The ruling follows a decision by the leaders of close to 200 countries in Paris last year to reduce greenhouse gas emissions in an attempt to keep the earth’s temperature from rising no more than 2 degrees Celsius.

Shareholders, including the non-profit advocacy group Ceres, have argued that achieving such a goal would likely mean leaving much of the world’s known oil and gas reserves underground.

“The SEC has rejected Exxon’s attempt to silence investors’ concerns about growing financial risks associated with climate change trends, including escalating global demand for low-carbon energy. This is a huge victory for investors seeking more robust climate disclosure from U.S. energy companies,” Shanna Cleveland, a director at Ceres, said in a statement.

An Exxon spokesman said the climate proposal would be put up for vote at the company’s shareholder’s meeting in May.

Chevron said its board of directors was still considering the SEC finding. But the California-based company also argued it had been following the government’s own rules on the release of internal data and analysis.

“Which would provide our competition with a window into our viewpoints, operations, resource and reserve base, asset queue and decision making. In addition stockholders have had sufficient opportunities to express their opinions on the proposal topic at our 2011 and 2015 annual meetings,” a statement from Chevron read.

An earlier version of this story incorrectly stated the SEC ordered Exxon Mobil and Chevron to comply with the shareholder proposal on climate change. The agency only said the company must allow a shareholder vote on the matter.

Chevron Corporation (Hermes Equity Ownership Services and UMC Benefit Board, Inc.)

Exxon Mobil Corporation (New York State Common Retirement Fund)