The Local Authority Pension Fund Forum (LAPFF) is calling on its members to vote against the re-election of the entire board of ExxonMobil at the company’s annual general meeting (AGM) tomorrow.
It indicated this was in response to the company blocking a shareholder proposal “by investors involved in Climate Action 100+” (CA 100+), and also announced it was recommending members support three shareholder resolutions: one calling for the appointment of an independent chair, another seeking a report on lobbying, and another a report on risks of petrochemical operations and investments in vulnerable Gulf Coast locations.
LAPFF, which is a voluntary association of 82 public sector pension funds and six pools based in the UK with combined assets of around £300bn (€269bn), is part of a group of investors collaborating to support engagement with Exxon as part of CA100+.
It has engaged over many years with the company, and issued voting alerts on climate-related resolutions at Exxon since 2008; this is the second year in a row it has recommended a vote against the entire board.
Councillor Doug McMurdo, chair of the forum, said: “ExxonMobil’s ongoing resistance to supporting the Paris Agreement on climate change is unacceptable. We expect the boards of companies in which we invest to take investor concerns over climate seriously.”
LAPFF joins Legal & General Investment Management and Church Commissioners for England in publicly signalling and/or calling for votes contrary to the Exxon board’s recommendations in response to its governance and strategy with respect to climate change.
After a shareholder proposal it co-filed failed to make it onto the Exxon AGM ballot paper for the second year in a row, Church Commissioners last month joined forces with the New York State Common Retirement Fund to write an open letter to Exxon shareholders to urge them to vote for two shareholder resolutions, and to take a “strong voting stance” on directors’ re-election.
‘Misleading’ claim rebutted
Writing in a blog on an ExxonMobil website last week, Stephen Littleton, vice president of investor relations and company secretary at ExxonMobil, said Church Commissioners and the New York State pension fund had made “recurring statements and SEC filings […] that misrepresent our positions and actions on both of these important matters [climate change and shareholder engagement]”.
Edward Mason, the outgoing head of responsible investment for Church Commissioners, rejected this in a comment on Twitter: “We’re misleading no one when we call out the risks of defiance of the Paris Agreement and energy transition. It’s time for shareholders to demand better.”
Littleton said the company had responded to feedback from shareholders by strengthening the authority of its lead independent director (Kenneth Frazier), added a new provision for shareholders to call special meetings, and “enhanced disclosures on issues of importance”, including risks related to climate change and oversight of lobbying and political contributions.
He pointed shareholders in the direction of the company’s ‘Energy & Carbon Summary’ report and other resources “to better understand how the company is managing these complex challenges before us and how we engage with our shareholders”.
Last year a proposal to separate the positions of chair and CEO at Exxon got 40.8% of the vote.