Shareholder pressure mounts on downgraded ExxonMobil

Aviva among latest investors to declare support for climate change resolution at next month’s AGM

(Flickr/Mike Mozart)


A growing list of major investors is backing calls on ExxonMobil to acknowledge climate risk, after its credit rating was downgraded on Tuesday.

British insurer Aviva and Seattle’s public pension fund are among the latest to declare their support for a shareholder resolution to be considered at next month’s AGM. California’s CalPERS, New York City Pension Fund and the Church of England are also in favour.

They are asking Exxon to analyse the impact of a 2C global warming limit on the value of its oil assets and publish the findings by 2017.

Standard & Poors has stripped the world’s largest private oil company of the triple-A credit rating it held since the Great Depression.

The ratings agency cited Exxon’s pursuit of high cost ventures as part of the reason its debt levels have more than doubled in recent years.

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Scientists estimate at least a third of the world’s proven oil reserves and half of natural gas is unburnable under the 2C threshold.

Previously, Exxon has insisted its assets will not be affected. Governments are “highly unlikely” to restrict emissions enough to meet the international 2C goal, it argued.

The firm’s credibility has been dented by emerging evidence it misled the public about climate science, however.

An investigation by Inside Climate News uncovered internal documents showing industry researchers were flagging the risks as early as the late 1960s.

The latest to surface, a 1980 report by Exxon subsidiary Imperial Oil published by blog DeSmog on Tuesday, said: It is assumed that the major contributors of CO2 are the burning of fossil fuels…

“There is no doubt that increases in fossil fuel usage and decreases of forest cover are aggravating the potential problem of increased CO2 in the atmosphere.”

Yet over the next few decades, Exxon mounted a PR campaign to undermine that scientific consensus.

Report: Exxon Mobil faces legal inquiry on climate misinformation

While Exxon has been singled out for a legal inquiry into these allegations, the shareholder resolution is part of a wider movement.

Coalitions of investors have lodged similar requests with other oil and mining majors to assess their exposure to carbon risk.

Rio Tinto, BP and Shell embraced the challenge, recommending shareholders vote in favour.

Exxon has fought every step of the way, unsuccessfully appealing to regulator the Securities and Exchange Commission to strike the vote off the ballot.

In one of the most closely contested votes to date, 42% of shareholders in US utility AES backed a 2C “stress test” last week.

Investor activists are privately confident of getting at least 20% at the Exxon AGM in Dallas on 25 May.

Shanna Cleveland of sustainable investor network Ceres wrote: “This proxy season, shareholder proposals on climate risk are being propelled by a powerful set of tailwinds: an historic climate accord, rapidly changing market forces, and unprecedented shareholder collaboration.”

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