Oil giant ExxonMobil has capitulated to activist shareholders and will begin issuing detailed reports on potential risks “climate change policies” pose to its business operations.
“These enhancements will include energy demand sensitivities, implications of two degree Celsius scenarios, and positioning for a lower-carbon future,” Exxon wrote in a federal regulatory filing submitted Monday night.
Exxon has faced increasing pressure over the years to “disclose” the risks its business operations could face because of global warming and future regulatory changes to phase out fossil fuels.
Exxon already issued projections on how global warming and future regulations could affect their business, but activists were unsatisfied. Opponents of the measure, however, say the company was foolish to give in.
“I began telling ExxonMobil management in 2008 that trying to appease climate-activists-dressed-as-investors was a fool’s errand,” Steve Milloy, publisher of the site JunkScience.com and Exxon shareholder, told The Daily Caller News Foundation.
Milloy said “fake investor” activists aren’t interested in benefiting other investors by maximizing profits, but instead “they want to use Exxon as a means of advancing their left-wing social and political agenda,” he said.
Exxon executives initially opposed shareholder measures, but activists managed to gather enough votes in May to pass a global warming reporting measure. The measure is non-binding but represents a big political win for activists.
The measure asked Exxon potential risks of “technology changes and from climate change policies such as the 2015 accord aiming to keep average global temperature increases below 2 degrees Celsius,” Reuters reported in May.
Milloy argued against the measure at the shareholders meeting, but he was unsuccessful in convincing investors to vote down the measure as they had done so many times in the past.
The New York State Common Retirement Fund, the country’s third-largest public pension plan, submitted the measure at Exxon’s annual shareholder meeting earlier this year. The Vanguard Group and BlackRock also supported efforts to disclose climate regulation risks.
“The notion that Exxon could appease the activists by merely issuing some report on climate is a grossly incompetent reading of the threat presented,” Milloy said.
Milloy filed a shareholder measure this week. The measure asks Exxon to compile a report on whether or not Exxon’s voluntary environmental programs “are producing actual and meaningful benefits to shareholders, the public health and the environment, including global climate,” according to a copy Milloy shared with TheDCNF.
Environmentalists have made a concerted effort in recent years to “decarbonize” the world through investor activism.
Part of the effort involves convincing financial institutions to stop investing in fossil fuel projects. California’s public pension fund divested from coal holdings, missing out on a recent boom in coal stocks.
Likewise, Norway’s sovereign wealth fund is considering divesting from oil and gas, despite the fund being supported by the country’s vast oil reserves.
Ceres, an environmental group, celebrated Exxon’s decision. Cere’s Andrew Logan said “shareholders have won a major victory,” adding Exxon will have to “seriously reckon with the potential risks of a low-carbon transition.”
“Of course, the company could go about the analysis requested by the shareholder proposal in a way that illuminates the risks for investors, or it could choose to do so in a way that obscures,” Logan told Axios on Tuesday.
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