ExxonMobil’s shareholders force the company to confront climate change head on

Can’t douse that.
Can’t douse that.
Image: Reuters/Lyle W. Ratliff
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To stay sane, environmental activists have to live by the mantra, “you win some, you lose some.” Earlier today (May 31), Reuters and Axios both cited sources saying president Donald Trump will likely pull the US out of the Paris climate agreement. Almost as if to make up for it, on the same day, shareholders of ExxonMobil voted in favor of a resolution that will force the oil giant to publish reports on how climate change is likely to affect its business.

The final vote was 62.3% in favor of the resolution; last year, a similar resolution garnered only 38% of the vote. The success of the vote comes despite the company escalating its efforts to persuade shareholders otherwise in the weeks leading up to its 2017 annual general meeting.

“This is an unprecedented victory for investors in the fight to ensure a smooth transition to a low carbon economy,” said Thomas DiNapoli, who manages the third-largest pension fund in the US and who owns $1 billion in ExxonMobil shares, in a statement.

The year 2017 is proving to be a remarkable one for shareholder activism. The Exxon vote follows a successful vote on a similar resolution at Occidental Petroleum, and other strong showings in voting on such resolutions at other energy companies, including Duke, DTE, PNM, XCel, and Dominion Resources.

As Quartz reported previously:

Many fossil-fuel company shareholders worry about the creation of “stranded assets,” which may result from underestimating climate-change risks. For instance, Carbon Tracker, a financial think tank, warned Exxon in 2014 that investing in Canadian tar sands, an expensive form of oil known to have a severe negative impact on the environment, would be a bad idea. Earlier this year, Exxon wrote off nearly $16 billion investment in the oil sands project.

Exxon will now have to show its shareholders exactly how climate change is likely to affect its business—and convince them the company is properly planning against those risks.