At ExxonMobil’s shareholder meeting on May 25, a modest resolution requiring the oil giant to outline how climate change will affect its business model was rejected, 62 percent to 38 percent. Following the Paris climate accord last December, an unprecedented coalition of investors, including the pension funds of New York, Vermont and California, joined together to spearhead this resolution.
When New York Comptroller Thomas P. DiNapoli announced the resolution, he stated that “investors need to know if ExxonMobil is taking necessary steps to prepare for a lower-carbon future.” ExxonMobil has given us its answer: it has absolutely no intention of changing its business plan to avert climate change.
The defeat of this resolution, even as a changing climate fuels wildfires, increases rainbursts in New England and exacerbates droughts in the West, should come as no surprise. Over the last two decades, shareholders have proposed 62 resolutions regarding the company’s actions on climate change. ExxonMobil has rejected every single one.
At last year’s shareholder meeting, ExxonMobil CEO Rex Tillerson said the company had no intention of investing in renewable energy, telling shareholders, “We choose not to lose money on purpose.” ExxonMobil has proven time and time again that shareholder engagement will not result in necessary changes.
Although one corporate governance resolution passed authorizing some shareholders to “nominate” climate experts as candidates to the board of directors, that is not climate change progress. It is important to note that more than 100 companies allow shareholders to nominate candidates to their boards of directors, and the number of board members elected through this process is exactly zero.
Given the resounding “no” votes on the other climate change shareholder resolutions at ExxonMobil, it is highly unlikely a climate expert would stand a chance of being elected to the board. Moreover, from Congress, we see ExxonMobil’s relentless lobbying against climate action.
To prevent catastrophic climate change, we need a fundamental shift away from burning fossil fuels. According to peer-reviewed research, that means keeping large proportions of fossil fuel reserves in the ground — including over 80 percent of unmined coal. Though we support the desire to push companies to address climate change, the repeated failures by ExxonMobil’s shareholders to pass even one resolution shows a different path is needed.
As Bevis Longstreth, former Securities and Exchange Commission (SEC) member under Ronald Reagan, has said “engagement is useless” when it comes to prompting the fundamental changes needed by companies like ExxonMobil. Our country deserves an honest debate about how to begin transitioning away from fossil fuels — and ExxonMobil has done everything it can to poison that debate and delay that transition.
Last fall, news investigations revealed that ExxonMobil had, through a decades-long campaign to promote climate denial, intentionally misled the public and their investors on the dangers of climate change. We both called for the Department of Justice (DOJ) to open an investigation into the wrongdoings committed by ExxonMobil. Since then, over 500,000 petition signatures have been delivered to the DOJ and state attorneys general calling for investigations into what ExxonMobil knew and when it knew it.
We’d like the SEC to investigate whether ExxonMobil violated securities laws by failing to appropriately disclose material risks related to climate change and are pleased attorneys general from New York, California, Massachusetts and the Virgin Islands have already announced investigations.
ExxonMobil may have robbed humanity of a generation’s worth of time to reverse climate change. The company continues to reject even modest requests to address climate change by its shareholders. Doing the same thing 62 times and expecting a different result is one definition of insanity. It is time for the pension funds to accept reality and divest from a company that knowingly drove us toward climate catastrophe while obstructing action with fabricated doubt and denial. For a company focused solely on profit at the expense of the environment and humanity, perhaps divestment could be the catalyst that starts to change ExxonMobil’s irresponsible behavior.
Already, responsible fiduciaries are rising to the call of climate leadership. The Rockefeller Family Fund, led by the heirs to the Standard Oil fortune from which Exxon formed, recently announced it would divest from ExxonMobil after years of trying to change the company through shareholder resolutions, saying the company’s deception was “morally reprehensible.” Vermont Gov. Peter Shumlin has called on his state’s pensions to divest. In the past four years, more than 500 institutions across the globe, with assets totaling more than $3.4 trillion, have committed to some level of fossil fuel divestment.
ExxonMobil’s actions may have imperiled all of humanity. The U.S. military, Pope Francis, the majority of the American people and the 175 countries that signed the Paris agreement all recognize the imminent threat of climate change. By divesting from ExxonMobil, pension funds send a clear message: Companies that intentionally poison public dialogue, obstruct solutions and fuel climate catastrophe will not receive the public’s investments.
When Anne Simpson, CalPERS’s investment director of global governance, joined the coalition bringing the resolution to Exxon, she said of climate change: “This isn’t an environmental issue. This has moved into the mainstream following the Paris agreement.” We wholeheartedly agree. The world is watching, and we can once again be a leader.
It’s time to divest from ExxonMobil.
Lieu has represented California’s 33rd District since 2015 and sits on the House Budget and the Oversight and Government Reform committees. Whitehouse has served as senator of Rhode Island since 2007 and is a member of the Senate Environment and Public Works; HELP; Judiciary; and Budget committees.