ExxonMobil advises shareholders to vote against Scope 3 emissions reductions

PRESS RELEASE

First climate proposal that requests Paris-alignment at ExxonMobil, following peers in Europe and the US. 

Oil major specifically rejects accountability for the emissions of its products (Scope 3) by calling Scope 3 accounting methods ‘duplicative and flawed’

Follow This expects that a majority of shareholders will not accept ExxonMobil’s refusal to set Scope 3 targets by voting in favor of the climate proposal, like majorities did at Chevron, ConocoPhillips, and Phillips66 in 2021

 

ExxonMobil’s directors advise shareholders to vote against a climate proposal that requests Paris-consistent emissions reductions targets, the company announced in the Notice of Meeting for the next shareholders’ meeting on May 25 (page 71-73).

“ExxonMobil can expect a shareholder rebellion,” says Mark van Baal, founder of Follow This, the group of green shareholders that has filed the climate proposal. “More and more investors do not accept Big Oil’s refusal to take adequate action against the climate crisis anymore.”

In 2021, the majority of shareholders voted in favor of the Follow This climate resolution at Chevron, Conoco, and P66; in addition, they voted in three new non-executives, proposed by activist shareholder Engine No. 1, in the board of Exxon.

“With the negative voting advice, the directors of ExxonMobil tell shareholders that they are unwilling to take responsibility at a time of devastating climate change.”

Lack of imagination

A key sentence in ExxonMobil’s directors’ negative response is ‘A proposal to constrain leading companies from producing products that currently have insufficient practical alternatives, simply transfers that production and associated emissions to other producers.’

Follow This response: “ExxonMobil’s response shows a lack of imagination beyond oil and gas. The board of the company fails to see that fossil fuels can be replaced by renewables. With ExxonMobil’s attitude, the goal of the Paris Climate Agreement will never be achieved. The world doesn’t demand oil and gas as such; the world demands energy, and increasingly renewable energy.”

Familiar pattern

ExxonMobil’s directors’ response that Scope 3 is not their responsibility is akin to Shell’s in 2017, BP’s and Equinor’s in 2019, and Chevron’s, ConocoPhillips’, and Phillips66’ in 2021; all five claimed Scope 3 was beyond their management scope. All five reluctantly set a Scope 3 target after investors’ votes. “The rejection of this climate resolution shows the board does not want to commit to the Paris Climate Agreement,” says Mark van Baal.

“In May, responsible investors will show ExxonMobil that Scope 3 is essential to mitigate the climate crisis by voting for this climate proposal, like they did with its peers Shell, BP, Equinor, Chevron, ConocoPhillips, and Phillips66 who all followed the same pattern.” 

Shareholder rebellion

In May 2022, the Follow This climate resolutions will again come to a vote at the shareholders’ meeting of Shell, as well as eight or nine other oil majors. In 2021, investors’ votes in favor of these resolutions showed a shareholder rebellion at Big Oil; in Europe, votes doubled, despite oil majors’ claims to be Paris-aligned; in the US, Follow This won three consecutive majorities. The companies responded with emissions reduction targets that fall short of Paris-alignment.

IPCC: rapidly closing window

“The scientific evidence is unequivocal: climate change is a threat to human wellbeing and the health of the planet. Any further delay in concerted global action will miss a brief and rapidly closing window to secure a liveable future,” said Hans-Otto Pörtner, co-Chair of the most recent IPCC report (WGII).

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