ExxonMobil bows to shareholder pressure on climate reporting

12 Dec 2017   Climate

ExxonMobil, the world’s largest listed oil and gas group, will start publishing reports on the possible impact of climate policies on its business, bowing to investor demands for improved disclosure of the risks it faces. The decision is the biggest success so far for investors who have been pushing companies to do more to acknowledge the threat they face from climate change and from policies that curb greenhouse gas emissions. In a regulatory filing on Monday evening, Exxon said it would introduce “enhancements” to its reporting, including analysis of the impact of policies designed to limit the increase in global temperatures to 2C, an internationally agreed objective. At Exxon’s annual meeting in May, investors controlling about 62 per cent of the shares backed a proposal filed by a group of shareholders led by the New York state employees’ retirement fund calling for an annual assessment of the impact of technological change and climate policy on the company’s operations. Supporters of the proposal argued that the disclosures would help shareholders assess the long-term resilience of Exxon’s operations in a world where governments delivered on their pledges to tackle global warming. The company’s board had opposed the proposal, arguing that, while directors agreed with the need for scenario planning and risk analysis, they were already “confident that the company’s robust planning and investment processes adequately contemplate and address climate-related risks and are sufficient to ensure delivery of long-term shareholder value”. In Monday’s filing, the company said the board had “reconsidered the proposal . . . [and] sought input from a number of parties, such as the proponents and major shareholders” before deciding to accede to improved reporting on climate policy risk. Under Lee Raymond, who led Exxon during 1993-2005, the company stressed the “gaps” in climate science, and was vehemently opposed to international attempts to address the threat under the 1997 Kyoto protocol.

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