Exxon urged to detail how it will be impacted by climate change rules
By Terry Wade
HOUSTON, May 11 (Reuters) – Pension fund chiefs from California and New York City urged Exxon Mobil shareholders on Wednesday to back a measure that would force the company to finely detail how its business will be impacted as governments move to tackle climate change.
CalPERS investment director Anne Simpson and NYC Comptroller Scott Stringer also said in a letter they would engage other shareholders as they push the world’s largest publicly-traded oil company to say more about how its revenues, reserves and operations could be hurt by the Paris Agreement that governments signed in December to limit global warming to 2 degrees celsius.
Federal securities laws required Simpson and Stringer to file the so-called solicitation letter, a copy of which was seen by Reuters, with the SEC.
Their letter was the latest sign environmental concerns that were once peripheral for many investors have become mainstream, with some of the most traditional shareholder groups demanding fossil fuel companies in general, and Exxon in particular, do more in response to climate change.
“Climate change poses financial risks, and investors need better disclosure to understand and price those risks,” the joint letter said.
The climate disclosure proposal, which will be weighed by shareholders at Exxon’s annual general meeting on May 25, was listed on this year’s proxy after New York State Comptroller Thomas DiNapoli won a March SEC ruling that turned down the company’s request to exclude it.
Exxon’s board has said its existing climate disclosures are robust and more than adequate. It has also said it is being unfairly targetted by green groups. The company was not immediately available to comment on Wednesday.
The pension funds also urged Exxon shareholders to support a so-called proxy access proposal that would let minority shareholders nominate outside directors to the company’s board.
That measure, which gives investors with 3 percent of shares who have held them for three years the right to nominate directors, passed at many oil and gas companies last year but narrowly failed at Exxon, which opposed it.
“Without effective proxy access, the director election process simply offers little more than a ratification of management’s slate of nominees,” the letter said.
Insiders at oil and gas companies say they worry proxy access could eventually lead to climate activists opposed to oil drilling voted on to company boards.
(Reporting By Terry Wade; Editing by Andrew Hay)