Environment

ExxonMobil Shareholders Demand Action On Climate Change

They that sow the wind shall reap the whirlwind, as the ancient phrase goes. With that in mind, oil giant ExxonMobil is experiencing a proverbial maelstrom for two reasons: Not only is it being investigated for potential fraud for lying about its direct and dangerous contribution to man-made climate change, but a significant group of shareholders now hope to force the conglomerate to publicly support the goals of the Paris agreement.

At ExxonMobil’s annual general meeting in Dallas, Texas, various shareholders, led by the New York State Retirement Fund, put forward a motion regarding climate change. Specifically, they want the company to publish a yearly assessment of the effect on its business of governments’ policies to limit climate change. In addition, they want the company to actively help the world to limit global temperature increases to no more than 2°C (3.6°F).

The company has stated that these shareholder demands are “unnecessary,” and that the accusations of fraud are “politically motivated.”

“I think the ‘change or die’ comments are a little dramatic,” ExxonMobil spokesman Alan Jeffers told BBC News. “The issue is an important one, climate change presents very real risks that need to be managed but so do energy requirements of the modern economy.”

An oil drilling platform, many of which are owned by ExxonMobil. lastdjedai/Shutterstock

They would do well to listen to their shareholders, though, because if there’s one thing that stock markets and investors understand more viscerally than anything else, it’s the threat of devaluation. The coalition of shareholders in this case have at least $10 trillion worth of assets under management; if this was to be withdrawn, it would have a hugely detrimental effect on the company.

Not just content with ExxonMobil acknowledging the threat of man-made climate change, the coalition has demanded that at least one board member with an in-depth understanding of climate change is appointed. In a separate motion, the company has been asked to disclose how much its investments would remain stable, and how profits would be affected, if policy measures were enacted to ensure the Paris agreement temperature target was adhered to.

This initiative has a range of supporters, including the pension funds of the governments of Norway, Canada, and California. A group of 1,000 academics from leading institutions has also written in to support these resolutions. The American multinational, which is worth around $353 billion as of the end of last year, is fiercely against these proposals, and has called on its shareholders to reject them.

Over the last year, various investigations into ExxonMobil have hinted that their researchers covered up when they first became aware of man-made climate change; some officials have suggested that the company even began to spread misinformation and doubt about climate change in order to shield themselves from public scrutiny.

Surface water stocks are becoming severely depleted as a direct result of man-made climate change. Piyaset/Shutterstock

Along with an uptick across the world in legislation to mitigate man-made climate change, shareholders have clearly seen the writing on the wall. Even if environmental concern isn’t part of the thought process here, the ultimate economic impact of doing nothing will be: A recent report revealed that as much as 17 percent of global wealth could be wiped out by 2100 if greenhouse gas emissions aren’t reigned in.

If the various climate change-related resolutions pass, it will mark a significant turning point in the battle to halt dangerous climate change. If a company as powerful as ExxonMobil has to be publicly open about its contributions towards climate change, then what will the shareholders of less powerful but equally culpable organizations think?

Leave a Comment