The Church Commissioners for England and New York State Common Retirement Fund (NYSCRF) have written an open letter to ExxonMobil shareholders asking them to call for change in the company’s governance and strategy, by their votes on three specific issues at the company’s annual general meeting on 27 May.
Investors are being asked to:
- Vote for a shareholder resolution calling for an independent chair of the ExxonMobil board. Tthe current chair is also the company’s CEO;
- Take a “strong voting stance” on director election in line with their own voting policies. The Commissioners and NYSCRF will vote against the re-election of the entire board);
- Vote for a shareholder resolution requesting an annual report on the company’s lobbying activities, including the amounts paid and recipients.
The two institutions have taken the action as part of the Climate Action 100+ initiative.
At last year’s ExxonMobil AGM, investors staged a significant rebellion when 40.8% of the votes were used to back a proposal to separate the positions of chair and CEO.
The open letter underlines the importance of governance, in the context not only of climate change, but also the collapse in demand for oil and gas, especially as a result of the COVID-19 crisis.
It said that a growing number of companies – including BP, Repsol and Royal Dutch Shell – have responded “in outstanding fashion” and committed to become net zero emissions businesses by 2050.
The letter continued: “They have also enhanced their oversight of lobbying by industry associations to clamp down on indirect lobbying against the achievement of the Paris goals. ExxonMobil, by contrast, has been uniquely resistant to accepting responsibility for the emissions associated with its business.”
Edward Mason, head of responsible investment for the Church Commissioners, quoting from the open letter, said: “Our voting intentions are, again, a measure of our profound dissatisfaction with ExxonMobil’s approach to climate change risks and the governance failures that underpin it.
“We believe that ExxonMobil can do so much better, and that a change in strategy and governance can bring about a long overdue improvement in shareholder returns,” he added.
Thomas P. DiNapoli, trustee of NYSCRF, said: “We believe that an independent board chair and the disclosure of lobbying are important first steps in restoring oversight and good governance practices at ExxonMobil.
“In short, we believe that the time has come for ExxonMobil shareholders to insist, unequivocally, on change. We believe that ExxonMobil directors must be held to account for this broken state of affairs.”
Last month however, the US Securities and Exchange Commission (SEC) blocked a shareholder proposal co-filed by the Church Commissioners and US-based non-profit organisation As You Sow, requesting ExxonMobil to issue a report describing its plans (if any) to reduce its total contribution to climate change and align its operations and investments with the goal of maintaining global temperature rise well below 2ºC.
The SEC had also blocked a similar proposal in 2019.
