Climate change has been quite the buzzword these past few weeks, with both political and industrial forces focusing on how they will deal with the economic and environmental issues that have been arising due to the effects of increased carbon dioxide in the atmosphere. Oil and gas firms, in particular, have for obvious reasons a variety of reactions to the concept of climate change affecting their operations. Some companies are handling the ordeal more gracefully than others.
The management at ExxonMobil experienced a rather surprising overturn in their shareholder meeting on Wednesday, May 31, when 62.3% of shareholders voted to force the company’s hand in reporting the impact of the worldwide initiative to minimize the effects of climate change. Large financial investors such as Blackrock, Vanguard, and State Street, among other shareholders, were the main parties who participated in the vote against management.
Typically, these firms are passive investors, content with merely allowing management to make the major decisions for the company in question. However, they apparently could not allow ExxonMobil to continue ignoring the potential regulatory changes it will have to face inevitably.
Just a few days later, on June 1, President Trump announced that he would be pulling the United States out of the Paris Climate Agreement. It is rather ironic then, given the firms reluctance to acknowledge the effects of climate change regulations, that ExxonMobil expressed enthusiasm for the U.S being part of the agreement. According to CNN Money, the firm stated that the Paris accord is an “effective framework for addressing the risks of climate change” and that the U.S. is “well positioned to compete” within the scope of the agreement.
All this occurred before Friday, June 2, when the New York Attorney General stated that ExxonMobil had misled investors regarding how the firm accounted for the risks of climate change. Reuters reports that Eric Schneiderman revealed that he held evidence which ostensibly supports the notion that ExxonMobil was manipulating investors by providing “potential materially false and misleading statements.”
ExxonMobil responded to the allegations with the following statement: “For many years, ExxonMobil has applied a proxy cost of carbon to its investment opportunities, where appropriate, to anticipate the aggregate financial impact of potential future government policies. We will respond fully to the Attorney General’s inaccurate and irresponsible allegations about proxy cost in our court filings. The fact that the Attorney General gave its filing to the media before the court illustrates, once again, this investigation is about politics and publicity, not law enforcement.”
The statement seems contradictory given the shareholder meeting where management was outvoted by shareholders concerning openly reporting on the effects of climate change. If what ExxonMobil states is true, the firm should face no legal consequences despite the confident statements of Eric Schneiderman.
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
- Tim McNallyhttps://oilmanmagazine.com/author/tim-mcnally/
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