Resolutions at the two oil giants would have pushed companies to take a more active role in combating climate change
DALLAS—Shareholders at Exxon Mobil and Chevron rejected resolutions backed by environmentalists that would have pushed the companies to take stronger stands in favour of limiting climate change.
Environmentalists took solace, however, that some of their ideas gained considerable support.
At Chevron Corp., a resolution asking for an annual report each year on how climate-change policies will affect the company received 41 per cent of the vote. A similar resolution at Exxon got 38 per cent.
Also, Exxon Mobil Corp. shareholders voted to ask directors to adopt a proxy-access rule, which would make it easier for shareholders to propose their own board candidates. Backers including the New York City comptroller said it could result in the election of independent directors who could help the company address risks like climate change.
The meetings May 25—Exxon’s in Dallas, Chevron’s in San Ramon, California—came as the companies are trying to dig out from the collapse in crude prices that began in mid-2014. Exxon earned US$16.15 billion last year, its smallest profit since 2002. Chevron’s annual profit plunged 76 per cent to $4.59 billion and included the company’s first money-losing quarter since 2002.
Crude prices have rebounded since February, boosting the shares of the top two U.S. oil companies, but they remain about half of what they were at their last peak.
Exxon is also dealing with investigations by officials in several states into what the company knew and allegedly didn’t disclose about oil’s role in climate change.
The company’s shareholders rejected resolutions to put a climate expert on the board and support the goal of a UN meeting in Paris last year to limit global warming to 2 degrees Celsius above pre-industrial levels.
Patricia Daley, a Dominican sister from New Jersey and sponsor of one of the resolutions, said Exxon lacked “moral leadership.”
“Our company has chosen to disregard the consensus of the scientific community, the will of the 195 nations that signed the Paris agreement,” religious leaders and even other oil companies, Daley said.
Exxon CEO Rex Tillerson said his company has long recognized that climate change is a serious risk and might require action. But, he said, any policies should be implemented evenly across the world, allow market prices to pick solutions, and be flexible enough to respond to economic ups and downs and “breakthroughs in climate science.”
Exxon forecasts that oil and gas will make up 60 per cent of the world’s energy supply in 2040—about the same share it holds today. Its CEO said the company was balancing the need to produce more energy for growing world demand with environmental considerations.
Tillerson said there is no alternative source that can replace the ubiquity of fossil fuels. He expressed confidence that technology will provide the key to limiting carbon emissions.
“We’ve got to have some technological breakthroughs,” he said, “but until we achieve those, to just say turn the taps off is not acceptable to humanity,” he said.
The shareholders responded with robust applause.
Across the street from the meeting hall, about 60 protesters gathered and urged large shareholders such as pension funds to divest their shares. Many held signs with slogans such as “Exxon Liar Liar Earth on Fire.” The mood was sedate, however, perhaps owing to the warm, muggy weather.