The chief executive of the world’s largest oil company will on Wednesday face two of the firm’s most persistent environmental activist shareholders – a nun from New Jersey and a friar from Milwaukee.
ExxonMobil boss Rex Tillerson has a long history of civil but strained sparring with Father Michael Crosby and Sister Pat Daly at its annual shareholder meetings. Crosby is leading a group of investors calling for Exxon to give a seat on its board to an eminent climate expert, while Daly is pressing for emission targets that would set the company on the the path away from fossil fuels.
All this is taking place against a backdrop of mounting external pressure on the oil group that makes the confrontation at this year’s gathering in Dallas, Texas, especially significant. It comes just weeks after Exxon dispatched a lobbyist and a planning executive to Rome in an attempt to brief the Vatican on global warming. Pope Francis is shortly to publish his encyclical on the environment, which could make uncomfortable reading for many in the oil and gas industry.
In a letter to shareholders before the Dallas meeting, Tillerson and his fellow directors recommended voting against Crosby’s resolution. They argued: “To set aside one seat for an environmental specialist or for any single attribute or area of expertise would, in our view, not be in the best interests of the company or its shareholders because it would dilute the breadth needed by all directors to make informed decisions for the company.”
Crosby’s resolution has won the backing of influential investor advisory group ISS, which is recommending its members support the proposal. Earlier Exxon had attempted to get the measure struck off the meeting agenda on technical grounds, but were overruled by the US Securities and Exchange Commission.
Separately, Daly is leading a group of activist shareholders calling on Exxon to come up with a plan to cut its greenhouse gas emissions – not just emissions from extraction and refinement processes, but also from Exxon fuel products. This resolution effectively calls on the group to set out a timeframe for a transition to becoming a non-carbon energy group, phasing out fossil fuels.
Again, it is opposed by Tillerson and his fellow directors, who in a letter to shareholders recommend they vote down the resolution as impractical. They told investors: “Energy is required to produce and process oil and gas, so increases in production volumes that are needed to meet the world’s rising need for energy will lead to increases in emissions from our operations and from end use by customers.”
The same proposal from Daly has been asked each year for some time. Last year it received the support of 22% of investors and is expected to perform strongly again on Wednesday. Among those to have already declared their support are Calpers, America’s largest pension fund, Calvert Investments, Walden Asset Management and the West Yorkshire Pension Fund.
Daly and Crosby have been attending Exxon annual investor meetings since 1997, pressing the board to address the mounting case for urgent action on environmental issues. Crosby said he had few expectations before Wednesday’s meeting, which takes place as usual at the Morton H Meyerson Symphony Centre in Exxon’s home city, Dallas. At previous meetings many voices in the audience have been fierce company loyalists or climate deniers.
“I call it a liturgy. It is a ritual – it’s going through the motions,” Crosby said. Asked if he felt his message was being heard by Tillerson, he said: “There is listening that is coming out of true dialogue, and there’s being silent having already made up your mind.” The Exxon CEO fell in the latter camp, Crosby added.
AOn Wednesday, colleagues of Daly will present a substantially identical resolution on greenhouse gas emissions at a shareholder meeting convened by fellow oil company Chevron.
Another resolution at that meeting, led by activists at As You Sow, calls for Chevron to slash its capital spending on big projects to develop reserves, instead returning it to shareholders.
The Guardian published on Monday its analysis of capital spending at the big five oil companies. It found $1tn (£0.64tn) had been paid out over nine years by the Exxon, Shell, Chevron, BP and Total. Annual spending doubled, before dipping back slightly last year, though remaining at historically high levels.
In its letter to shareholders ahead of the meeting, the Chevron board said the proposal to cut capital spending “is based on a flawed, if not dangerous, premise: that stockholders would be best served if Chevron stopped investing in its business”.
This article was written by Simon Bowers, for theguardian.com on Wednesday 27th May 2015 11.50 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010