Continuing momentum of Church Commissioners’ initiative

In our post COP21: the Paris Agreement and the churches we commented that Church Commissioners were continuing their proactive management of their investment portfolio; on 16 December, they announced that the ‘Aiming for A’ investor coalition, had confirmed that it was calling for the major mining companies to make a step change in their disclosure to investors about their response to the challenges posed to their businesses by the global drive to mitigate climate change. In January we reported that Shell and BP had agreed to disclose how they will be impacted by efforts to lower greenhouse gas emissions in response to shareholder proposals co-filed in 2015 by the Church of England and other investors and endorsed by the boards of both companies. In addition, 10 global oil and gas companies, including Shell and BP, have also announced their support for lowering GHG emissions to help meet the 2 degree goal.

However, to date ExxonMobil has been resistant to making such disclosure, despite attempts by a group of investors led by New York State Comptroller Thomas P. DiNapoli and the Church Commissioners for England. On 24 February we reported that the Church Commissioners had issued a Press Notice which stated: “… Rather than working with [the group of investors] to provide the reporting that institutional investors require, Exxon have gone to the US regulator – the Securities and Exchange Commission – to try to get the resolution struck off so that shareholders do not get the opportunity vote on it at Exxon’s AGM later this year”.

Last month the Securities and Exchange Commission (SEC) denied ExxonMobil’s attempt to have the resolution struck down, and yesterday the Church Commissioners issued the following Press Release:

News from the Church Commissioners

Major investors declare support for climate change resolution at ExxonMobil AGM

12 April 2016

Institutional investors with more than $6trn of assets under management have declared that they will support a shareholder proposal urging ExxonMobil to disclose the impact of climate change policy on its business.

The resolution was co-filed by the Church Commissioners for England and New York State Comptroller Thomas P. DiNapoli as Trustee of New York State Common Retirement Fund. It asks Exxon to disclose how resilient its portfolio and strategy would be were policy measures to restrict global warming to 2 degrees, as agreed in Paris in December 2015, to be successful.

The resolution will be put before ExxonMobil’s AGM on 25 May. More than 30 institutional investors have declared that they will vote for the motion so far, including major fund managers and pension funds Amundi, AXA Investment Management, BNP Paribas, CalPERS, Legal & General Investment Management, Natixis, New York City Retirement Fund and Schroder’s.

Edward Mason, Head of Responsible Investment for the Church Commissioners, said “We are delighted with the scale of support this resolution has received so far. The resolution is part of a much wider trend following the Paris Agreement for investors to ask companies to improve disclosure on how they are positioned for the risks and opportunities posed by climate change.”

ExxonMobil had attempted to have the resolution struck down by the Securities and Exchange Commission (SEC), but their request was denied last month. Exxon’s peers, Shell and BP, have already agreed to disclose how they will be impacted by efforts to lower greenhouse gas emissions in response to similar shareholder proposals co-filed in 2015 by the Church Commissioners and other investors and endorsed by the boards and shareholders of both companies.

ENDS

Notes

The wording of the resolution is available here: http://www.ceres.org/investor-network/resolutions/exxon-carbon-asset-risk-2016 . The full list of investor supporters, updated on a rolling basis, is available here: http://www.ceres.org/issues/carbon-asset-risk/investor-support-of-portfolio-resilience-resolutions .

Exxon’s AGM papers are expected soon at the following address: http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-asm .

Comment

Climate change inevitably affects all businesses through its impact on  the measures that they will need to be put in place in relation to mitigation and adaptation. Regardless of a belief in climate change or not, businesses will be required to respond to government regulation, the demands of insurers, and customer pressure. To these must now be added the considerable influence of ethical investors. We await with interest  the results of the Exxon AGM on 25 May.