Exxon loses SEC petition to block shareholders voting on climate change resolutions

Mar 03, 2021 News

ExxonMobil CEO, Darren Woods

Kaieteur News – The Securities and Exchange Commission (SEC), an independent American agency designed to protect investors and the national banking system, has blocked an application by ExxonMobil to prevent its shareholders from voting on resolutions related to climate change.
ExxonMobil’s petition came on the heels of a motion from BNP Paribas Asset Management that urged the oil giant to report if, and how, its activities aligned with global efforts to fight global warming.
BNP, a French group that offers its clients a range of financial services, had said there is not enough information available to assess how Exxon ensures that its lobbying activities, directly, and indirectly through trade associations, align with the objectives of the Paris Climate Accord which seeks to bring global temperatures to 1.5 Degrees Celsius. BNP, which holds 139,000 shares of ExxonMobil stock, said 200 large investors had asked the oil company how it was managing this issue but got no response.
Taking this into account along with Exxon’s petition, the SEC said it did not agree that there was a basis to exclude the resolutions from being voted on during the companies’ annual meetings.
In a previous analysis, Kaieteur News had published that the American oil explorer is facing an unprecedented rise in shareholder pressure. Its investors are not only concerned about the steep decline in profits in recent times, but more particularly, whether ExxonMobil’s spending is in alignment with the global aspiration of net zero greenhouse gas emissions by 2050.
This concern, which has sparked an uprising among shareholders with deep pockets, has led to a clamour for change in Board Directors and more importantly, a change in the way management at ExxonMobil conducts businesses.
Just recently, the world’s largest money manager and second largest investor in Exxon, BlackRock, put the company on notice that there would be a change to the way it engages corporations. BlackRock, which manages US$8.67 trillion in global assets, said it would be more inclined to vote in favour of shareholder resolutions, and against boards of directors at companies.
Last month, Kaieteur News would have reported that investment firm, Engine No 1, with the backing of the California State Teachers’ Pension Fund, had joined calls for a change at ExxonMobil. The New York State pension fund also followed up with threats to divest its stake in the company unless it moves away from fossil fuels more quickly.
A group of 135 investors had earlier this month, formally cemented their intention to bring massive changes to ExxonMobil by launching, “The Coalition United for a Responsible Exxon” (CURE). As of today, CURE’s over 135 members collectively represent over US$2.2 trillion in assets.
In its launching letter, CURE had raised urgent concerns about Exxon’s current direction, which it said is premised on outdated assumptions about high oil prices, demand, and margins that are incompatible with the reality of climate change and the inevitable transition to renewable energy sources. Once the most innovative leaders in the industry and a pillar of the Dow Jones (DJ), CURE said that Exxon today finds itself lagging behind other oil majors that have adapted their strategies to lead the global energy transition.