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Exxon Mobil Corp. is in the hot seat again over its reply to last year’s unprecedented investor drive for an analysis of how carbon curbs could affect the oil giant’s business over the long term.
The leader of that drive, the New York State Common Retirement Fund, has sent Exxon a series of questions about projections used in the climate risk report it issued this year. The fund, which owns about $857 million in Exxon shares, also wants to know how the company plans to make refineries and other facilities more resilient to extreme weather events such as hurricanes, according to its March 30 letter.
“Exxon’s climate risk disclosures to date have been inadequate,” New York State Comptroller Thomas DiNapoli, who oversees the third-largest public pension fund in the U.S., said in a statement provided to Bloomberg Law on April 3. “We remain focused on pushing the company to address climate risk because Exxon’s future depends on its ability to adjust to a lower carbon global economy.”
The comptroller’s office has asked Exxon to reply to its questions by May 1 so that the fund can decide on “next steps” before the company’s annual meeting, usually held at the end of May. It hasn’t said yet what those next steps will be.
Exxon spokesman Scott Silvestri said when asked about the letter that “we value input from all of our shareholders.”
The pension fund teamed up with the Church of England’s investment fund to submit for last year’s meeting a shareholder proposal asking Exxon to assess the risks it faces if the world meets its goal to limit global warming to 2 degrees Celsius above pre-industrial levels. The proposal passed over board opposition, thanks to unprecedented backing from BlackRock Inc., Vanguard Group, and other top asset managers.
Exxon didn’t respond to the vote right away, so DiNapoli resubmitted the climate disclosure proposal for this year’s meeting. He withdrew it after Exxon agreed to publish a report.
Exxon’s report to investors, published in February, said if climate change curbs live up to their promise, oil demand may fall 20 percent by 2040. It said in a separate business outlook that it’s more likely that demand will grow by 20 percent.
The Carbon Tracker Initiative, a think tank that researches how shifting away from fossil fuels could affect investments, deemed Exxon’s investor report “inadequate” because it didn’t provide enough details on underlying assumptions.
The Institute for Energy Economics and Financial Analysis, which is funded in part by the Rockefeller family, likewise called the report to investors “defective and unresponsive.” The Rockefellers, whose family fortune comes from the father of the U.S. oil industry and founder of what’s today Exxon Mobil and Chevron Corp., sold their Exxon stock in 2016 as part of a split with fossil fuels.
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