Taking On Goliath

A group of investors led by the Church Commissioners for England and New York State Comptroller Thomas P. DiNapoli are urging energy giant ExxonMobil to disclose the resilience of its business model in the wake of the Paris Agreement on climate change.

The group of investors, including co-filers the Vermont State Employees' Retirement System, the University of California Retirement Plan and The Brainerd Foundation, represents nearly $300 billion in assets under management and more than $1 billion in Exxon shares.

“The unprecedented Paris agreement to rein in global warming may significantly affect Exxon’s operations,” said DiNapoli, who is Trustee of the New York State Common Retirement Fund, the third largest public pension fund in the United States, with nearly $185 billion under management last year.

“As shareholders, we want to know that Exxon is doing what is needed to prepare for a future with lower carbon emissions”, DiNapoli continued, “The future success of the company, and its investors, requires Exxon to assess how it will perform as the world changes.” 

“Climate change presents major challenges to corporate governance, sustainability and ultimately profitability at ExxonMobil,” said Edward Mason, the Head of Responsible Investment for the Church Commissioners for England. “As responsible investors we are committed to supporting the transition to a low carbon economy. We need more transparency and reporting from ExxonMobil to be able to assess how they are responding to the risks and opportunities presented by the low carbon transition.”  

The Paris UN Climate Conference concluded with world leaders committed to holding the rise in global temperatures well below two degrees Celsius and to seek to restrict warming to 1.5 degrees. This agreement was welcomed on behalf of the Church of England by Bishop Nicholas.

The shareholder proposal filed by the Church Commissioners and Comptroller DiNapoli asks ExxonMobil to publish an assessment of how its portfolio would be affected by a 2 degree target through, and beyond, 2040. Specifically, the assessment should include an analysis of the impacts of a 2-degree scenario on the company’s oil and gas reserves and resources assuming a reduction in demand resulting from carbon restrictions. 

Exxon’s peers, Shell and BP, have already agreed to disclose how they will be impacted by efforts to lower greenhouse gas emissions in response to similar shareholder proposals co-filed in 2015 by the Church of England and other investors and endorsed by the boards of both companies. More recently, 10 global oil and gas companies, including Shell and BP, announced their support for lowering GHG emissions to help meet the 2 degree goal.