Canadian Manufacturing

SEC rejects Exxon Mobil bid to block climate change reporting proposal

Shareholders want to know how Exxon Mobil's portfolio and oil and gas reserves would be affected by a two-degree global warming target



ALBANY, N.Y.—The Securities and Exchange Commission has rejected Exxon Mobil’s bid to block a shareholder proposal that would require it to disclose how its business will be affected by a 2-degree target limit on global warming.

The SEC Office of Chief Counsel said it disagrees with the Irving, Texas-based oil company that the proposal is “so inherently vague and indefinite” that neither shareholders nor Exxon Mobil could be certain what it requires.

The office also rejected the contention that the proposal can be excluded because the company’s current public disclosures “compare favourably” with the proposal’s guidelines.

The resolution will be included in Exxon Mobil’s proxy document sent to shareholders next month, along with the board’s position opposing it, company spokesman Alan Jeffers said Thursday.

New York Comptroller Thomas DiNapoli joined with the Church of England’s investment fund and others in filing the proposal. New York’s pension fund for public workers has about $1 billion invested in Exxon Mobil.

They want annual assessments of how Exxon Mobil’s portfolio and oil and gas reserves would be affected by the limit endorsed by 195 nations in December. That calls for lower carbon emissions and reductions in burning fossil fuels.

“This is a major victory for investors who are working to address the risks that global warming presents to our portfolios,” DiNapoli said of the SEC response sent Tuesday.

Exxon Mobil, in a January letter to the SEC, requested assurance the regulator wouldn’t take enforcement action if the resolution was omitted. The company said that it had “already substantially implemented the proposal” and that it already estimates costs in business planning that reflect the climate-related policy decisions it anticipates governments will make.

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