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Feb. 24 — Investors representing more than $1 billion in Exxon Mobil Corp. shares are asking the Securities and Exchange Commission to let a shareholder resolution on climate change onto the company's proxy.
The shareholder proposal, filed by New York state's comptroller and four other investors, is the latest in a series of attempts to get Exxon Mobil to explain how its business may be impacted by climate change, but it is the first since the international climate agreement reached in Paris at the end of 2015.
“As investors, we need to know how Exxon Mobil’s bottom line will be impacted by the global effort to reduce emissions and what the company plans to do about it,” New York State Comptroller Thomas DiNapoli, who manages the third largest public pension plan in the U.S., said in a statement Feb. 24.
Exxon Mobil, which is simultaneously facing an inquiry from the state's attorney general into whether it misled the public and investors on climate change, has asked the SEC to block the proposal from making it to a vote at its annual meeting in the spring.
The SEC declined to comment.
Exxon Mobil also declined to comment beyond its written remarks to the SEC, which argue that the proposal is unclear and that it repeats an earlier investor request for a report on long-term risks posed by climate change, including the potential for oil and gas resources to lose their value.
In 2014, Exxon Mobil told investors it was confident that “none of our hydrocarbon reserves are now in danger or will become stranded,” since demand for petroleum-based fuels is expected to continue to grow worldwide.
Shareholders want the company to perform another analysis looking at what would happen to demand and price if 196 nations live up to their goal of holding global temperature rise to 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels by 2100 as part of the Paris Agreement.
“We believe that our desire to see reporting on how Exxon Mobil’s business would fare were warming to be restricted to 2 degrees Celsius is widely shared in the institutional investor community,” Edward Mason, head of responsible investment for the Church of England’s investment fund, which co-filed the resolution, said in a statement. “It is a perfectly reasonable ask.”
But as the Irving, Texas-based company points out, country pledges made toward the Paris deal don't add up to achieve the 2-degree target.
Other oil and gas companies are considering it though, including ConocoPhillips, BHP Billiton and Statoil. BP and Shell have also agreed to do their own analyses, after similar shareholder resolutions passed by an overwhelming margin last proxy season.
“Investors aren’t asking companies to solve the issue overnight,” Shanna Cleveland, who helps shareholders engage with oil and gas companies on climate change through the nonprofit Ceres, told Bloomberg BNA. They do at least want companies like Exxon Mobil to start thinking about what 2 degrees would mean to them, she said.
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Exxon Mobil's comments to the SEC are available at https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/nystatecommon012216-14a8-incoming.pdf.
The investors' response is available at http://www.osc.state.ny.us/press/releases/feb16/ExxonMobilNYSCRF_2016.pdf.
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