Global Warming Vote Puts Exxon Management On the Defensive

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The Hill – Congress Blog

A surprisingly large minority of ExxonMobil shareholders, nearly one-third, demanded Thursday at their annual meeting that the company reduce greenhouse-gas emissions and develop sources of renewable energy. Such a large vote for an outsider resolution on any issue except corporate governance would have been unthinkable a few years ago.

Even shareholders who are currently gaining wealth from Exxon‘s sole focus on oil and gas see that it can’t last. Just ask industrial dinosaurs like General Motors whether they should have changed course sooner. If Exxon remains unresponsive, the next challenge will be how many of these deeply concerned investors — including giants like CalPERS, California’s state employee benefits overseer — decide to take their billions out of a company that can’t see where its own future lies.

Among the institutional shareholders voting for the global warming resolution was Stanford University, which is under fire for taking strings-attached research money from Exxon, then allowing the company to trumpet its Stanford connection as proof of its green credentials. Exxon even cited the university project, which critics call “Big Oil U,” in shareholder communications opposing the global warming resolution. Stanford students, alumni and other critics, including the Foundation for Taxpayer and Consumer Rights, have called the deal a “greenwash” of the company’s otherwise dirty corporate practices.

The 31% yes vote on the global warming resolution submitted by a group of activist nuns, was well short of the majority needed to pass. But it was a sharp signal that large institutional investors are joining the movement to push Exxon into a sustainable future.

Exxon CEO Rex Tillerson reiterated at the meeting that Exxon is in the oil and gas business, not the renewable energy business. Despite recent green-sounding corporate statements, he also downplayed the seriousness of global warming. “There are some things we know, some things we don’t know,” he said. “What I find perplexing is why people feel so threatened because we want to have a discussion about it.”

Tillerson’s go-slow policy and false doubts about global warming are rousing enough shareholder opposition to make the company pay attention. Similar environmental resolutions submitted in the late 1990s got votes in the single digits. Since 2003, when a climate-change resolution got 22% of the vote, shareholder demands for better environmental policies at Exxon have steadily increased.

Shareholders of the world’s most environmentally unfriendly oil company have now put renewable energy and global warming front and center, defying a strong management campaign against them.

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