Proactive shareholders take on climate changeReprints
Exxon Mobil Corp. shareholders earlier this year approved a climate change-related resolution, and observers say others may follow.
In May, a majority of shareholders of Irving, Texas-based Exxon Mobil approved a nonbinding shareholder resolution, which had been opposed by the company, to disclose the impact on its business of compliance with global climate change guidelines.
Shareholders that supported the resolution included the Sacramento-based California Public Employees’ Retirement system, the largest public pension plan in the United States with more than $300 billion in investments.
A CalPERS spokesman said the pension fund has filed 17 shareholder letters this year supporting climate risk reporting proposals with the U.S. Securities and Exchange Commission.
Separately, the New York and Massachusetts attorneys general are investigating the oil company’s climaterelated policies. New York Attorney General Eric Schneiderman labeled as a possible “sham” Exxon Mobil’s method to assess the potential impacts of climate change policies on global energy demand.
Similar climate-related resolutions were approved earlier in May by shareholders of Houston-based Occidental Petroleum Corp. and Allentown, Pennsylvaniabased energy company PPL Corp.
Meanwhile, in November, a purported class action lawsuit was filed in U.S. District Court in Dallas in Pedro Ramirez Jr. v. Exxon Mobil Corp. et al. charging that Exxon’s climate change policies have led its stock to be artificially inflated.
“There’s no question that activist shareholders are looking at potential avenues for compelling their companies to take more affirmative steps to reduce their impact on climate changes or to reduce their carbon footprint,” said Peter M. Gillon, a partner with Pillsbury Winthrop Shaw Pittman L.L.P. in Washington, referring to that lawsuit.
Observers also pointed to San Ramon, California-based Chevron Corp.’s Feb. 23, 2016, 10-K financial report to the SEC, which states “increasing attention to climate change risk has resulted in an increased possibility of governmental investigations and, potentially, private litigation against the company.”
Observers say this is the first time a major publicly-traded fossil fuel company has publicly admitted that investors’ climate change lawsuits pose a risk to its profits.