Exxon Mobile Climate Impact Report
On Wednesday 31, May 2017, it was announced that the a proposal to study the impact of carbon reduction and other government policies on the future and profits of Exxon Mobil corp had been approved by 62 % of the shareholders of Exxon Mobil Corp. The proposal for studying the climate impact had been initiated by 54 different financial, religious and corporate governance activist groups to protect the interests of the shareholders of Exxon. The investors are expected to meet officials of Exxon corp in summer 2017, to decide on the criteria for studying the Climate Impact on the future growth prospect and challenges faced by Exxon corp, one of the largest energy companies
The Climate Impact vote at Exxon corp follows similar Climate Impact proposals in other oil companies like Devon Energy and Hess corp. Increased carbon emissions from vehicles and other equipment which use fossil fuel like oil has led to global warming worldwide, resulting in drought, water shortages and other changes in climate. Hence to reduce carbon emissions, countries worldwide are trying to ensure that energy companies like Exxon corp take the necessary steps. Though the United states president decided to withdraw from the Paris agreement on climate change recently, this will not affect the decision of Exxon corp to consider the Climate Impact
Tracey Rembert, assistant director of Catholic Responsible investing, which was one of the fifty four groups which was responsible for initiating the climate change proposal said that they had held periodic meetings with Exxon to discuss annual meeting proposals a few months ago. The investors want Exxon to be prepared and plan for adverse business conditions like hostile government policies, disruptive technologies in the energy sector and climate change policy which put restrictions on energy companies. In addition to change in customer preferences, lowering of oil prices, aggressive carbon reduction policies, the activist groups want Exxon to be prepared for a worst case business conditions.
Tapping oil and gas reserves requires investment of a large amount of money and resources, however with governments of countries world wide pressurizing oil companies like Exxon Mobil Corp to reduce the carbon emission, in future it may not be economical for the companies to continue with their current business model, and this may cause losses to investors in these companies. Ceres, a non profit group that tracks the environmental initiatives of publicly listed companies claims that similar proposals for climate impact analysis on company futures received at least 40 % shareholder approval in other listed energy companies like Duke Energy, Southern co and Marathon oil
Since Exxon Mobil is one of the largest energy companies, the decision of the shareholders regarding Climate Impact is likely to be noticed by its competitor and other oil companies also. For example last year, a similar carbon reduction analysis received the backing of 23% shareholders at Hess. Though a Hess official confirmed that they were in touch with major share holders, Hess declined to comment. The directors at both Hess and Mobil Exxon Corp have opposed the Climate Impact studies proposed by activist shareholders of the energy companies .