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January 08, 2015
Vermont a Co-Filer of Resolution Requesting Emissions Reduction Targets from Exxon
    by Robert Kropp

The state's Pension Investment Committee joins a coalition coordinated by the Interfaith Center on Corporate Responsibility and Ceres in filing a shareowner resolution calling for greenhouse gas emissions reduction goals.


During the 2014 proxy season, ExxonMobil’s agreement to publish a report addressing the financial risks associated with stranded assets led co-filers As You Sow and Arjuna Capital to withdraw their shareowner resolution. To describe the oil giant's subsequent report as disappointing would be an understatement; considering the report's contention that all the reserves already on the books of Exxon will be burned, the response by Oil Change International—“Exxon to World: Drop Dead”—seems more accurate.

To their credit, As You Sow and Arjuna responded by preparing a shareowner resolution for the 2015 proxy season that requests a form of financial compensation from Exxon for its callous response to the crisis of climate change. “Investors are concerned Exxon Mobil is not preparing for a low demand scenario and that potential and planned capital expenditures on high cost high carbon projects are at risk of eroding shareholder value,” the resolution states. Instead of wasting more millions on exploration for oil that cannot be burned, the resolution requests that Exxon “commit to increasing the amount authorized for capital distributions to shareholders through dividends or share buy backs.”

Surely Exxon realized that a report whose conclusions bordered on climate denial would not pass without emphatic responses from sustainable investors and environmental activists. And with the 2015 proxy season still months away, the resolution from As You Sow and Arjuna is not the only one that has already been filed. Another resolution, led by the Tri-State Coalition for Responsible Investment—a member of the Interfaith Center on Corporate Responsibility (ICCR)—requests that Exxon start publishing greenhouse gas (GHG) reduction goals.

CDP, which represents 767 institutional investors holding $92 trillion in assets, found that of the 386 companies in the S&P 500 that report to CDP, 79% earn a higher return on their carbon reduction investments than on their overall corporate capital investments,” the resolution states. “We believe the failure of ExxonMobil’s management to set public goals has impacted the company’s ability to reduce overall emissions: between 2011 and 2013, ExxonMobil’s emissions increased 3.7%, even as production fell 6.1%.”

“ExxonMobil’s management strategy in response to the severity of the climate crisis has been wholly inadequate.”

The Tri-State Coalition reports that 47 institutional investors have thus far signed on as co-filers of the resolution. One of them is the Vermont Pension Investment Committee (VPIC) from my home state of Vermont. In announcing the state's involvement in the initiative, State Treasurer Beth Pearce said, “15 of the 24 managers that VPIC contracts with are signatories to the United Nations Principles for Responsible Investment (PRI). As signatories, these managers are expected to incorporate environmental, social and governance issues into their decision-making processes. Vermont and other investors hold these managers accountable by requiring appropriate disclosure and reporting on activities and progress on these issues.”

2015 will mark the ninth year in a row that the Tri-State Coalition has submitted a resolution calling on Exxon to establish GHG reduction goals. In 2014, the resolution gained the support of 22% of shareowner votes. At last year's annual general meeting in Dallas, Sr. Pat Daly of the coalition urged Exxon to help bring about “a new generation of fuels that will be economically and environmentally sustainable.”

“The world is at your door, you must respond,” she told Exxon managers.

 

 
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