May 30, 2007
Shareholder Resolutions on Climate Change to Heat Up ExxonMobil's Annual Meeting
by Anne Moore Odell
A broad coalition of shareholders is seriously concerned about ExxonMobil's lackluster response to
global climate change and plans to give thumbs down to board member Michael Boskin.
Today at ExxonMobil's annual shareholder meeting held in Dallas, an important group of
institutional investors plan to vote against returning Michael Boskin to ExxonMobil's (ticker: XOM) board of directors. This
decision was made in light of Boskin's refusal to meet with shareholders about the oil company's
plans to mitigate climate change. Shareholders will have a chance to vote on shareholder
resolutions that call for the company to cut greenhouse gases and to increase their spending on
renewable energy sources.
Boskin is the T.M. Friedman Professor
of Economics at Stanford University. He chairs the board's Public Issues Committee, whose role is
“to review and provide advice, as the Committee deems appropriate, regarding the Corporation's
policies, programs and practices on public issues of significance, including their effects on
safety, health and the environment.”
Denise Nappier, Connecticut State Treasurer and principal
fiduciary of the Connecticut Retirement Plan and Trust Funds (CRPTF), published an open letter on
April 17 that outlined the reasons for CRPTF's withholding of support for Boskin and asked other
shareholders to follow suit. The letter reports that five times over the past year and a half a
coalition of investors has asked to meet with Boskin to discuss ExxonMobil's position on climate
risk. Five times the requests were refused.
“It is ironic that just as ExxonMobil's
management finally takes its first cautious steps towards addressing climate change, its directors
still fail the basic test of good governance: to demonstrate the board's accountability to the
company's owners by engaging with them,” said Karina Litvack, director of governance & sustainable
investment at F&C Management. F&C Management is a UK investment manager that owns about 2.6 million
shares of ExxonMobil stock.
Investors met with the management of ExxonMobil in July of
2006 to discuss climate change, but the coalition said it would also like to meet with the
company's independent directors, of which Boskin is one. ExxonMobil has answered these criticisms
of Boskin and reports that Boskin has responded to the group in writing four times and referred
investors to Rex Tillerson who is the CEO and board spokesperson on climate change.
coalition of investors opposing Boskin's reappointment has almost $900 billion of assets under
management. They include, among others, California State Teachers Retirement System (CalSTRS), F&C
Management Ltd., Illinois State Board of Investment, New York City Employees Retirement System, and
New York State Common Retirement Fund. Besides Connecticut, the state treasurers for California,
Maine, Maryland, North Carolina and Vermont are voting against Boskin's continuation.
ExxonMobil's annual proxy statement supports Boskin, as do Proxy Governance and Glass Lewis, two independent proxy advisory
and voting firms.
Four resolutions on the ExxonMobil's proxy ballet directly address the
environment and climate change. Resolution 14 proposed by the Episcopal Church requests the
corporation's board report on its accountability for ExxonMobil's environmental impact on
communities in which it operates. ExxonMobil's management reports that they already report to
shareholders and communities through their “Corporate Citizenship Report.”
One week before
today's meeting, ExxonMobil issued their 2006 Corporate Citizenship report that presented the
company's economic, environmental, and social performance. The report highlights 2006 achievements
made by ExxonMobil including avoiding CO2 emissions of 10.5 million metric tons because of the
company's investments is “energy-efficient cogeneration capacity.” The report also includes the
company's approach to climate change mitigation.
"This report highlights our continuing
commitment to meet the world's energy needs and address environmental and other citizenship
challenges-- by producing, refining, and delivering hydrocarbon resources in a responsible manner"
said Tillerson. "We are proud of our record of corporate citizenship, and look forward to building
upon this record of accomplishment in the future."
A resolution asking ExxonMobil to cut
their greenhouse gases was filed by ICCR member
the Sisters of St. Dominic from Caldwell,
NJ. Resolution 15 asks ExxonMobil's board to support quantitative goals for reducing greenhouse
gases (GHG) from its operations and products. It also requests that the company report back to
shareholders by September 2007 on its plans.
"This amazing support reflects investors'
growing understanding that companies now need to move beyond basic disclosure of greenhouse gas
emissions to a business plan to reduce emissions," said Sister Patricia Daly of the Sisters of St.
Dominic of Caldwell.
An undisclosed party proposed Resolution 16 that requests customers
at gas pumps receive information about the carbon emissions generated by the gas and/or diesel they
purchase. No shareholder view was provided for this resolution and management recommends voting
against consumer labeling at the pump, because there are too many factors the information would not
The last resolution for shareholders to vote on is Resolution 17, asking the
company to adopt a policy to increase renewable energy sourcing. The undisclosed party that filed
the resolution requests that ExxonMobil work to increase renewable energy sourcing with 15%-25% of
its energy sources coming from renewables between 2015-2025. ExxonMobil suggests voting against
this resolution and reports that oil and gas remain more profitable than renewables.
ExxonMobil's management proxy statements suggest voting against all four environmental/climate
change proposals. The leading agencies that provide proxy voting advice to institutional
shareholders, Institutional Shareholder Services, Glass Lewis, and Proxy Governance, are supporting
the greenhouse gas resolution. Glass Lewis and Proxy Governance agree with ExxonMobil management on
the rest of the environmental proposals.
ExxonMobil is not alone in facing climate change
resolutions. The Investor Network on Climate
Risk reports that there are 42 global climate change resolutions at US companies this 2007
proxy season. Chervon's proposal regarding global climate change received 9% in their April 25,
2007 meeting. Shareholders, stakeholders and others concerned with climate change and risk
mitigation are waiting to see how today's ExxonMobil's votes shake out. Although a company's board
need not follow shareholder resolution suggestions, Exxonmobil's board should have already heard
the dissatisfaction of some large institutional shareholders who are asking the oil mammoth to work
toward a more sustainable future.