PRAISE and criticism was dispensed to fossil-fuel companies last week by the Church Commissioners, who have suggested that ExxonMobil needs to catch up with its rival, Shell.
On Tuesday of last week, Shell announced that it would leave the American Fuel and Petrochemical Manufacturers (AFPM), a large lobby group, citing a “material misalignment” over climate policies.
“The need for urgent action in response to climate change has become ever more obvious since the signing of the Paris agreement in 2015,” the chief executive of Shell, Ben van Beurden, said. “As a result, society’s expectations in this area have changed, and Shell’s views have also evolved.”
AFPM’s lack of stated support for the goal of the Paris agreement was one of a number of areas of “misalignment”.
The chief executive of the lobby group, Chet Thompson, said that it would continue to “advance policies that ensure reliable and affordable access to fuels and petrochemicals, while being responsible stewards of the environment”.
Shell’s decision followed its Industry Associations Climate Review.
The director of ethics and engagement for the Church of England Pensions Board, Adam Matthews, praised it as “an industry first. . . Shell have set the benchmark for best practice on corporate climate lobbying not just within the oil and gas but across all industries. The challenge now is for others to follow suit. . .
“Far too often there is an inconsistency between the positions advocated by a company in support of the goals of the Paris climate agreement and the positions industry associations take lobbying against action on climate change.”
Meanwhile, the Church Commissioners described permission given to ExxonMobil to exclude a shareholder resolution on targets for cutting its greenhouse-gas emissions as “disappointing and puzzling”.
The resolution was filed in December by the Commissioners and the New York State Common Retirement Fund, with the support of investors with $9.5 trillion under management. It called on ExxonMobil to disclose targets for reducing emissions, including those released when its products, in line with the goals established by the Paris agreement on climate change.
At the time, the head of responsible investment for the Church Commissioners, Edward Mason, suggested that ExxonMobil should be in line with its biggest European peer, Shell.
In January, ExxonMobil wrote to the US Securities and Exchange Commission (SEC) complaining that the proposal in the resolution “reflects a misunderstanding both of the nature of the Paris agreement and of the global energy economy”. It was an attempt to “micro-manage” the company, and had already been substantially implemented.
Last week, the SEC ruled in favour of ExxonMobil, stating that the proposal would “micromanage the company by seeking to impose specific methods for implementing complex policies in place of the ongoing judgment of management as overseen by its board of directors”. Exxon could keep the proposal off the ballot at its annual shareholder meeting next month, it agreed.
A statement from the Commissioners described it as a “disappointing and puzzling decision that enables Exxon to close down interaction with its shareholders on climate-related strategy. Exxon is continuing to misjudge the mood of investors on climate risk and the fact remains that at present the company is providing no assurance that it has a strategy consistent with the goals of the Paris agreement. We are reviewing our options.”
James Buchanan, of Operation Noah, said this week that ExxonMobil was “not only unresponsive to investor engagement on climate change, but is actively obstructing it. The time for engagement is over — the Church of England should divest from Exxon now.”
ExxonMobil has failed to secure agreement to exclude another resolution, brought by an environmental group, As You Sow. Shareholders will vote on “assessing the public-health risks of expanding petrochemical operations and investments in areas increasingly prone to climate-change-induced storms, flooding, and sea-level rise”.