NYS Comptroller Tells Exxon; Set GHG Reduction Targets

The latest news regarding how institutional investors with an estimated $1.9 trillion under management, led by New York State Comptroller Thomas P. DiNapoli, as Trustee of the New York State Common Retirement Fund (the Fund), and the Church of England’s investment fund (Church Commissioners) have filed a shareholder resolution calling on ExxonMobil to set and disclose GHG reduction targets.

ExxonMobil GHG Reduction Targets

This development comes off the heels of Shell‘s new carbon reduction emissions announcement. The resolution, the first of its kind at ExxonMobil, asks the company to set short-, medium- and long-term GHG targets aligned with the goals established by the Paris Agreement to keep the increase in global average temperature to well below 2 degrees, and to pursue efforts to limit the increase to 1.5 degrees. The resolution has been developed in line with the overarching expectations of the Climate Action 100+ initiative, a global steering committee, of ensuring companies develop business strategies consistent with the Paris Agreement.

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NYS Comptroller DiNapoli and Church of England call on ExxonMobil to set targets for lowering GHG emissions

Shareholder proposal asks Exxon to set goals in-line with Paris Agreement

December 17, 2018 (NEW YORK) | Institutional investors with an estimated $1.9 trillion under management, led by New York State Comptroller Thomas P. DiNapoli, as Trustee of the New York State Common Retirement Fund (the Fund), and the Church of England’s investment fund (Church Commissioners) have filed a shareholder resolution calling on ExxonMobil to set and disclose greenhouse gas (GHG) reduction targets, covering emissions from both its operations and the use of its products.

“ExxonMobil's lack of GHG reduction targets puts it at odds with its industry peers that have taken such steps,” DiNapoli said. “The world is transitioning to a lower carbon future and Exxon needs to demonstrate its ability to adapt or risk its bottom line along with investors’ confidence."

Edward Mason, Head of Responsible Investment for the Church Commissioners, said: “We want to see ExxonMobil develop a clear strategy for long-term sustainability, in line with international commitments for a safer climate. While we have been pleased to see ExxonMobil start to address the impact of climate change on its business over the past two years, the company has much more to do. Our request would bring Exxon in line with its biggest European peer, Shell, and we believe the board can and should support it.”

The resolution, the first of its kind at ExxonMobil, asks the company to set short-, medium- and long-term GHG reduction targets aligned with the goals established by the Paris Agreement to keep the increase in global average temperature to well below 2 degrees, and to pursue efforts to limit the increase to 1.5 degrees. ExxonMobil's peers including Shell and Total have begun to set long-term GHG reduction targets following investor engagement.

The resolution has been developed in line with the overarching expectations of the Climate Action 100+ initiative, of ensuring companies develop business strategies consistent with the Paris Agreement. Climate Action 100+ is a global investor initiative, engaging the world’s largest corporate greenhouse gas emitters in seeking to ensure they take necessary and sufficient action on climate change. It involves 310 investors with more than $32 trillion under management as the largest shareholder engagement initiative on climate change. The ExxonMobil resolution comes just weeks after Shell and Climate Action 100+ signatory investors agreed to new climate targets, demonstrating the power of collective global investor engagement.

“Global investors are increasingly calling on the companies that they own to demonstrate that they are prepared for a carbon-constrained future,” said Andrew Logan, Director of Oil and Gas at the sustainability nonprofit organization Ceres. Ceres is one of the founding partner organizations of Climate Action 100+ responsible for coordinating investor engagements in North America. “Setting ambitious goals consistent with the Paris Agreement to reduce heat-trapping greenhouse gas emissions — and taking concrete steps to actualize those goals — would be a sign to investors that Exxon is taking this issue seriously.”

The resolution is expected to be the subject of a shareholder vote at the ExxonMobil’s annual meeting in the spring of 2019.

A previous resolution filed by the Fund and the Church Commissioners won support from 62% of shareholders in 2017 and asked the company to disclose the impact of measures to combat climate change on its business. In response, ExxonMobil released a first report in December 2017. The Fund, Church Commissioners and other investors continue to hold talks with ExxonMobil about the importance of releasing a more comprehensive disclosure report.

A number of investors have joined the Fund and the Church Commissioners in supporting the request, including CalPERS, HSBC Global Asset Management, Presbyterian Church USA and SHARE on behalf of Fonds de Solidarité des Travailleurs du Québec (FTQ).

The full text of the shareholder resolution filed at Exxon is here.




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Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver