Press Release: ARJUNA CAPITAL: OIL MAJORS FACE “EXISTENTIAL THREAT” FROM NEAR-SIGHTED RESPONSE TO CLIMATE CHANGE
Activist investor pressures ExxonMobil to create innovative board committee to lead climate change response and evaluate results; As You Sow joins Arjuna on Climate Board Committee Proposal at Chevron.
Dallas and San Ramon, May 29, 2019 – ExxonMobil and Chevron will square off at annual meetings today with concerned investors who want to see greater action to address climate change risk, and a tangible shift in the corporate culture behind the companies’ intransigence. Exxon is telling its shareholders to vote against a proxy resolution filed by Arjuna Capital, urging the oil giant to create a new climate change board committee for the purpose of ensuring that the “existential threats” of climate change are being fully addressed. Chevron is opposing the same resolution, up for a vote today, led by Arjuna and co-filed by As You Sow.
Arjuna Capital’s Climate Change Board Committee Exxon proposal and memo to shareholders are available for download online at: https://arjuna-capital.com/wp-content/uploads/2019/05/Exxon-2019-Climate-Change-Committee.pdf and https://arjuna-capital.com/wp-content/uploads/2019/05/XOM_Memo_Climate-Change-Board-Committee_2019.pdf.
Arjuna Capital’s proposal, co-filed by As You Sow, at Chevron on the Climate Change Board Committee is available online at: https://arjuna-capital.com/wp-content/uploads/2019/05/Chevron-2019-Climate-Change-Committee-Proposal.pdf.
The ExxonMobil shareholder proposal states: “Shareholders request the [ExxonMobil] Board of Directors charter a new Board Committee on Climate Change to evaluate ExxonMobil’s strategic vision and responses to climate change, and better inform Board decision making on climate issues. The charter should explicitly require the committee to engage in formal review and oversight of corporate strategy, above and beyond matters of legal compliance, to assess the company’s responses to climate related risks and opportunities, including the potential impacts of climate change on business, strategy, financial planning, and the environment.”
Natasha Lamb, managing partner at Arjuna Capital said: “It’s clear to investors that Exxon and Chevron face an existential threat that will not be assuaged by denial or simple lip service. It should be the responsibility of the companies’ boards to pivot the businesses for success in a low carbon economy. Instead, proactive climate change strategy appears divergent to board priorities. Given the severity of the climate crisis, dedicated committees with climate expertise are far overdue at the oil majors. As investors, we have been pressing on these issues every year, but there is no accountability to change. This year’s proposal elevates the issue to the board, so as to clarify the fiduciary responsibility of the board members. This is a pragmatic approach that we think deserves broad support from shareholders.”
Arjuna Capital’s Climate Change Board Committee proposal at ExxonMobil and Chevron seeks to establish a unique group with delineated duties to make sure that climate change is given adequate, rather than tangential, focus. The envisioned climate change committee will create clear lines of responsibility, in terms of who is setting policy on climate change. It will strengthen the entire board, making it more climate-competent.
Lamb continued: “Investor capital is at substantial risk in the face of climate change policy, competition from renewables, peak oil demand, and unburnable fossil fuel reserves. Implementing our Proposal would formalize board-level oversight of climate change strategy so our company may remain successful in an increasingly decarbonizing economy.”
Arjuna Capital is urging ExxonMobil shareholders to vote in support of “Proposal #7” at its annual shareholder meeting in Dallas for the following reasons:
Exxon faces unprecedented disruption to its business model if it fails to adequately plan for a low carbon transition.
A board committee can provide the full board with the data needed to make a strategic companywide pivot, encourage GHG reduction goals, and redirect its business model and financial flows consistent with the Paris Agreement.
A formal board committee charter delineates responsibility and clarifies a fiduciary duty of care to become well informed on climate issues.
MEDIA CONTACT: Patrick Mitchell, (703) 276-3266 or pmitchell@hastingsgroup.com.