Exxon Mobil Corp shareholders on Wednesday approved a proposal calling for the company to disclose the impact of compliance with global climate change guidelines on its business, an issue central to probes by two state attorneys general.
A preliminary tally showed the non-binding proposal passed with 62.3 percent of ballots cast, the world's largest publicly traded oil company said. The increase from last year's 38 percent support for a similar report signaled that the non-binding proposal was backed by at least some of Exxon's top institutional shareholders. Exxon had opposed the proposal, saying it already tests its business for impacts from changing technology and energy demand using a range of scenarios. It also stepped up efforts this year to defeat the proposal by calling and lobbying shareholders. Immediately after the votes were disclosed, Exxon Chief Executive Darren Woods said the board would review the request, the only of the nine shareholder proposals to receive more than a majority of votes cast.
Exxon faces probes by Massachusetts and New York Attorneys General into whether it misled the public and investors by soft-pedaling climate change risks. Exxon has said suits are politically motivated and intended to force it and others to change their positions on climate change.
Edward Mason, head of responsible investment for the Church of England, one of the proposal's sponsors, called for Exxon to report on the business impact of achieving the Paris agreement's carbon reduction targets.
He aimed his remarks at Exxon directors whose had either personally endorsed or served on boards of other companies that had publicly backed carbon emissions reduction.
The report would require Exxon to assess the risks to its business if carbon emissions were held to a level that would keep average global temperature increase to under 2 degrees Celsius, one of the Paris agreement's goals.
"Do you leave your understanding of climate change at the door when you attend Exxon Mobil board meetings?" Mason asked, mentioning four of the company's outside directors by name.
Earlier, Exxon's Woods had said the company supported the goals of many of the proposals, including two other climate-related items, but disagreed with the methods.
"They're going to have to comply with (shareholder sentiment)" and report on the risk of oil and gas producing assets becoming uneconomical due to emissions restrictions, said Bob Litterman, chairman of the risk committee at Kepos Capital LP, a New York investment firm with $3 billion in assets.
Litterman holds derivatives positions that would benefit from oil companies underperforming the benchmark S&P 500 index.