THE Church Commissioners have joined a shareholder revolt at the energy giant ExxonMobil, in the latest attempt to push the fossil-fuel company into taking climate change more seriously.
Led by the investment firm Engine No. 1, and supported by the second-largest pension fund in the United States, the shareholder campaign is demanding that new directors are appointed to the board at ExxonMobil, among a tranche of reforms.
The head of responsible investment for the Commissioners, Bess Joffe, said that it was long past time that ExxonMobil started responding to shareholder pressure on environmental issues. “Calls for the company to address shareholders’ concerns about strategy, governance, and climate mitigation in order to stop the destruction of shareholder value have gone unheeded,” she said.
“Action is urgently needed for the company to improve its ability to create long-term sustainable value and pivot its strategy to support the energy transition.”
The Commissioners are among several large investors in ExxonMobil who have been trying to shake up the firm for years, largely unsuccessfully.
A proposal to force the company to report how its business will be affected by efforts to tackle climate change was passed by shareholders in 2017, but subsequent efforts to appoint an independent chair of the board and force more disclosures about ExxonMobil’s lobbying have failed to find enough support.
US fossil fuel firms such as ExxonMobil have been generally more resistant to shareholder activism on climate change in comparison with their European counterparts, most of whom have made plans to cut their emissions.
The church investors-backed Transition Pathway Initiative, however, reported in October that none of the main energy companies is on track to cut its emissions enough to reach the Paris agreement’s target of 2°C warming by 2050 (News, 23 October).
The Church Commissioners regularly come under pressure from Christian green activists to sell their holdings in polluters such as ExxonMobil. They continue to argue that remaining at the table gives them more leverage to push for constructive change.
The General Synod, however, has instructed the Church’s investing bodies — who control more than £8 billion — to disinvest from fossil-fuel firms by 2023, unless the energy giants can prove that they are on course to align with the Paris-agreement goals of keeping global temperature rise to 1.5ºC above pre-industrial levels (News, 8 July 2018).
Despite positive engagement with firms such as BP and Shell, which has started to move policy in a greener direction, calls from the Church and other shareholders for ExxonMobil to change course have been largely ignored.
The company has invested billions in oil and gas fields, and insists that its long-term future remains secure, even as its rivals have started to redirect spending towards greener technologies.
The company’s attitude has been affected by the pandemic and the subsequent collapse in oil prices, however: its previous strong profits turned into a $2.4-billion loss in the first nine months of 2020, and a 35-per-cent fall in its share price.
NIBs to divest from companies failing on climate progress. On Tuesday, the Church’s National Investing Bodies (NIBs) — the Commissioners, Pensions Board, and CBF Church of England Funds — restricted investment in nine companies because those companies failed to meet the standards of the NIBs’ 2020 climate change hurdles, writes Hattie Williams.
It is the first time that the NIBs have restricted companies that have fallen short of specific carbon emission standards, set using Transition Pathway Initiative (TPI) data. The NIBs are to divest from the restricted companies in which they have holdings as soon as possible, a statement on Tuesday said. The total value of these companies was £32.23 million on 21 October.
Twelve other companies made enough changes to stay off the NIBs’ restricted list. The director of Ethics and Engagement for the Pensions Board, Adam Matthews, said: “As a fund we are committed to net zero by 2050 or sooner and this is a further step in aligning our investments to that objective. . . We have demonstrated it is possible to secure change in company behaviour.”