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May 17, 2001
ExxonMobil Feeling Heat on Both Sides of the Atlantic
    by Mark Thomsen

Shareholder resolutions and boycotts put pressure on oil giant to change its stance on global warming and embrace clean energy.


As the world’s largest integrated oil company, Exxon Mobil Corporation (ticker: XOM) wields more than a little influence in the global warming debate and on the oil industry’s position on renewable energy. Leading up to its May 30 annual meeting, ExxonMobil is feeling more and more pressure on these issues both in the U.S. and in Europe. Campaign ExxonMobil is vigorously supporting two shareowner resolutions here in the U.S., and in Europe an international boycott of the company announced by Greenpeace and Friends of the Earth UK is gaining support.

Both of the resolutions pushed by Campaign ExxonMobil have been filed by religious investors. One asks the company’s board to tie executive pay with environmental and social performance, and the other asks the board to adopt a company policy that promotes renewable energy sources. This is the second year for both resolutions.

"For investors who don’t agree with the company’s efforts to manipulate global warming science, or who disagree with the company’s rejection of clean energy, the resolutions offer a way to say to management "Hey - we’re concerned about how your handling these issue and want to see a change,"" said Peter Altman of Campaign ExxonMobil.

Altman says ExxonMobil is endangering shareowner interests in three ways. One is that by attempting to mislead investors on the science of global warming, the company is failing to disclose facts pertinent to the company’s short- and long-term business environment. The second is that by not developing and articulating a vision for meeting the growing clean energy demand around the world, ExxonMobil risks being left behind by its competitors in clean energy technologies. And the third is that by continuing to actively oppose global climate solutions, the company is making itself a target of international groups.

This third point has recently rung true in the form of a boycott. It began on April 16 with a decision by participants in the Global Greens 2000 Conference to formally declare a boycott of ExxonMobil and other U.S. corporations for resisting the Kyoto Protocol. Greenpeace and Friends of the Earth UK followed that with the launching of an international boycott of ExxonMobil this month. With the help of celebrities such as Bianca Jagger, this effort gained immediate media attention. Support for the boycott continued to grow this week as Alexander de Roo, Vice President of the European Parliament’s Environment Committee, started a petition to support the boycott. The petition quickly gained backing from various European Union countries and political parties.

Most of ExxonMobil’s revenues come from overseas; its 2000 annual report states that it earned $10.2 billion from overseas sales, compared to $6.8 billion in the U.S. It has not taken the threat of an international boycott lightly. After the declaration from the Greens Conference, the company went on a public relations spending spree with advertisements placed in the New York Times, the Wall Street Journal and the Washington Post.

ExxonMobil shareowners will vote on a total of eight resolutions at the annual meeting. Another environmental resolution, filed by Boston-based Trillium Asset Management, requests the company to issue a report to shareowners on the potential environmental damage that would result from the company drilling for oil and gas in the Coastal Plain of the Arctic National Wildlife Refuge (ANWR). The resolution also asks for the report to estimate the likely costs and returns of such activities.

Other resolutions ask for a commitment and report on board diversity; the adoption of a sexual orientation non-discrimination policy; at least two candidates for every open position in board elections; freezing the pay of corporate officers in times of significant downsizing (the lesser of 5 percent of the workforce or 2000 workers); and a disclosure of employees or contractors that have previously worked in any governmental capacity.

The U.S. government’s rejection of the Kyoto Protocol has angered countries around the world, and it seems many believe the ultimate blame lays with large U.S. companies such as ExxonMobil. That anger is transforming into support for an ExxonMobil boycott in Europe, and if the boycott spreads it could start showing up in the company’s bottom line.



 

 
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