Growing demands from investors to address the effect of climate change on oil prices could herald an industry trend, analysts say, even as the Trump administration prepares to roll back environmental regulations.
Ahead of their annual shareholders’ meeting, the oil company advised against passing the proposal, which calls for more in-depth stress tests of climate change effects, arguing climate risk information was already being sufficiently tested and reported.
But 62 percent of ExxonMobil’s shareholders voted in favor of the measure, up from 38.1 percent who voted to support similar climate risk reporting last year, after a prolonged campaign to get energy companies to take climate change more seriously.
Another climate-related resolution, asking ExxonMobil to disclose its actions to lower methane emissions beyond regulatory requirements, did not gain majority support.
The New York Common Retirement Fund submitted the measure, which asks ExxonMobil to conduct and share stress tests about how their business could be affected by climate change risk and the surge of fossil-free technology. ExxonMobil’s board argued that disclosure is already covered by their “Outlook for Energy” projections and other publications, but said it would reconsider its stance against additional disclosure in light of the shareholder request.
“Climate change is one of the greatest long-term risks we face in our portfolio and has direct impact on the core business of ExxonMobil,” New York State Comptroller Thomas DiNapoli said in a statement. “The burden is now on ExxonMobil to respond swiftly and demonstrate that it takes shareholder concerns about climate risk seriously,”
In the weeks leading up to the shareholder meeting and in their proxy statement to investors, ExxonMobil noted the “importance of assessing the resiliency of the Company’s resource portfolio” but urged investors to vote against additional disclosures.
ExxonMobil shareholders’ support for disclosing the impact of climate change comes on the heels of a similar move by shareholders from Occidental Petroleum, who passed the reporting measure by 67 percent on May 12.
“We look forward to continuing our shareholder engagement on the topic and providing additional disclosure about the Company’s assessment and management of climate-related risks and opportunities,” Eugene Batchelder, board chairman of Occidental Petroleum, said in a written statement Wednesday.
Analysts pointed to Occidental and ExxonMobil’s moves as the start of a trend in climate change risk disclosure. That comes even as the Trump administration is preparing to withdraw the United States from the Paris climate agreement, according to media reports on Wednesday. (ExxonMobil has supported staying in the agreement.)
“This vote is a huge step forward for the world’s biggest oil and gas major, the industry and beyond,” Tarek Soliman, a senior analyst at the Carbon Disclosure Project, said in a press statement. The organization provides transparency around carbon emissions on a global scale.
ExxonMobil CEO Darren Woods said the company’s investment in new technology and innovations would be the best path toward meeting energy needs while helping to mitigate the effects of climate change.
“We remain confident that it will enable us to deliver value far into the future,” Woods said at the end of the shareholders’ meeting.