Published on December 13th, 2017 | by Joshua S Hill0
ExxonMobil Agrees To Increase Climate Disclosure
December 13th, 2017 by Joshua S Hill
Multinational oil and gas megalith ExxonMobil has this week agreed to increase its level of climate disclosure in the wake of shareholders voting in favor to instruct the company to produce an annual report on the risks of climate change and government policies.
Earlier this year ExxonMobil was instructed by 62% of shareholders to produce an annual report which would disclose the company’s risks from climate change itself, and the risks stemming from government regulations seeking to stem global warming and fight climate change. “This extraordinary result, on the heels of the majority Occidental vote, indicates growing institutional investor concern,” said Robert Schuwerk, US Senior Counsel, at the time of the vote.
Such disclosure is becoming a driving force in business and investment — though recent studies have found varying degrees of success. Earlier this month, London-based think-tank Preventable Surprises published a report exploring the potential disclosure in the energy utility sector, and found that major investors are hampering the growing trend of disclosure. Conversely, however, more and more investors and investor groups are seeking climate disclosure from companies in an effort to better drive climate action and mitigating financial losses.
In a filing with the US securities regulators this week, ExxonMobil has confirmed that it will in fact begin to disclose its climate risks.
“Consistent with ExxonMobil’s Corporate Governance Guidelines, the Company’s Board of Directors has reconsidered the proposal requesting a report on impacts of climate change policies (Item 12) that the New York State Common Retirement Fund submitted for the 2017 Annual Shareholders Meeting,” the company wrote in its filing to the SEC. “In reconsidering the proposal, the Company sought input from a number of parties, such as the proponents and major shareholders. As such, the Board has decided to further enhance the Company’s disclosures consistent with the Item 12 proposal and will seek to issue these disclosures in the near future. These enhancements will include energy demand sensitivities, implications of two degree Celsius scenarios, and positioning for a lower-carbon future.”
While this is good news on the face of it, the lack of specifics allow the company wiggle room that has raised eyebrows.
“ExxonMobil’s filing shows that the company can’t stem the tide of investor demand for disclosures of companies’ plans to meet 2 degrees Celsius scenarios — but the devil is in the details,” said Kathy Mulvey, climate accountability campaign manager at the Union of Concerned Scientists.
“The company has taken some steps in the right direction by urging President Trump to keep the United States in the Paris climate agreement, appointing a climate scientist to its board, committing to reduce methane emissions, and publicly pressuring the American Legislative Exchange Council to refrain from drafting a sample resolution against the Environmental Protection Agency’s endangerment finding.
“That said, the company is nowhere close to retooling its business model to meet the Paris accord’s goals it purportedly supports. ExxonMobil is still investing aggressively in developing future reserves under the assumption that economies worldwide will continue to rely heavily on fossil fuels. Likewise, the company is still a prominent member of trade associations and industry groups that spend millions of dollars to spread climate disinformation and oppose sensible policies to reduce heat-trapping emissions.”