Exxon Mobil Corp shareholders on Wednesday rejected a proposal that would have forced the company’s board to create a special committee on climate change.
Shareholders also defeated measures requiring the company to report the risks of climate change at chemical plants on the Gulf Coast in the United States and to report political contributions and lobbying.
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Under CEO Darren Woods, Exxon has launched major expansion programs to find and produce new reserves of oil and natural gas, as well as to expand the company’s refining and chemical footprint. Exxon has projected shale production of 1 million barrels per day at the Permian Basin around western Texas, the top US shale field, as early as 2024.
Shareholders in recent years have pressed Exxon – the largest publicly traded oil producer – to define a path toward meeting the goals of the 2015 Paris Agreement to limit global warming. But the company has yet to commit to any targets.
“Engagement on climate is important, but working on solutions through fundamental research and development for new technologies is also important,” said Woods. He pointed to a recent $100m commitment by Exxon to partner with the US Department of Energy’s national labs to research and bring lower-emission technologies to commercial scale.
‘No Planet B’
The Church Commissioners for England, the endowment fund of the Church of England – and New York State Comptroller Thomas DiNapoli, who manages the state’s pension fund – had urged other shareholders to vote in favor of an independent board chairman in a failed proposal that would have created a new role separate from that of the CEO.
They pushed for the protest vote after the US Securities and Exchange Commission said in April that Exxon was not required to let investors vote on a shareholder submission calling for emissions targets “aligned with the greenhouse gas reduction goals established by the Paris climate agreement“.
Exxon called that proposal misleading – though substantially implemented – and an attempt to interfere with management responsibilities.
Edward Mason, head of responsible investment for the Church Commissioners for England, which presented two of the shareholder resolutions for Wednesday’s meeting, said Exxon’s European oil rival BP PLC has taken on “intensive, meaningful and independent director-led” work on climate issues supported by both the company and investors. Exxon, though, has been in “open conflict about climate strategy and disclosure” with its investors, Mason said.
The independent board chair proposal won a record level of support, DiNapoli said. “Shareholders sent a strong message that they are dissatisfied with Exxon’s poor governance, which is preventing the company from adequately addressing climate risk,” DiNapoli said. “Exxon would ignore this level of support for an independent board chair at its own risk.”
Exxon will continue to engage with shareholders as part of a “year-long process”, said Woods, the CEO.
“The results are not totally unexpected, but you have to look at the vote counts as well,” said Robert Schuwerk, executive director for North America at Carbon Tracker, an independent financial think tank analysing the transition to clean energy.
“Forty-one percent is higher than they’ve ever obtained, without much of a campaign around it,” he added, referring to the chairman proposal. “It will likely come up again next year and would only take a few more major shareholders [to pass].”
“Shareholders are looking for more accountability at the board level,” Schuwerk told Al Jazeera, “integrating climate targets into the overall business plan and strategy”.
Schuwerk also said oil giants are “not necessarily committing financial suicide by transitioning” to renewable energy, with “investors trying to create a glide path for that transition”.
Meanwhile, more than 50 people organized by environmental group 350 Dallas held signs and chanted outside the Exxon shareholders’ meeting place to protest the company’s climate policies.
“The climate crisis is real, and they have contributed to it,” said Olinka Green, 50, of Dallas, who held a sign that said, “There is no Planet B”.
Other major oil moves
On Wednesday, Chevron Corp’s shareholders overwhelmingly rejected three environmental resolutions: proposals to create the company’s own board committee on climate change, to report on reducing carbon footprint, and to report on the human right to water.
Meanwhile, Total S.A.’s shareholders on Wednesday approved chairman and chief executive officer Patrick Pouyanne’s 2018 and 2019 salary packages, and included climate change targets in his future pay deals.
Pouyanne’s 2018 total salary compensation of 3.1 million euros ($3.5m) was approved by a majority of shareholders. His 2018 pay was down 17 percent compared to the previous year.
For 2019, the shareholders approved Pouyanne’s package, which includes a fixed pay component of 1.4 million euros ($1.56m), the same as the previous year.
The variable component could be up to 180 percent of the fixed component, and one of the targets to meet in the variable-pay component is to lower greenhouse gas emissions from Total S.A.’s oil and gas installations.
Also on Wednesday, Royal Dutch Shell PLC announced it will disclose how much tax it pays in every country where it operates, in a striking reminder that major oil companies in Europe have embraced corporate accountability to a much greater extent than their US counterparts.