At ExxonMobil’s annual shareholder meeting in Dallas, Texas, this week, activist shareholders and investors demanded the company own up to its deceptive practices regarding climate disruption and begin to implement adaptations and regulations to mitigate climate impacts.
Shareholders nixed nearly all of the 11 measures directly or indirectly related to climate disruption during the meeting Wednesday, but 62 percent of them passed a “proxy-access” measure that would allow investors holding at least 3 percent of shares to nominate outsiders for seats on the company’s board.
New York City Comptroller Scott Stringer sponsored the measure, empowering investors holding at least 3 percent of company shares for more than three years to nominate up to a quarter of the board’s directors annually. While shareholder resolutions are non-binding, the measure could potentially allow a climate activist to become a director on the company’s board. Exxon CEO Rex Tillerson said the board would consider enacting the proposal this July.
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The proposal is the first to be passed by shareholders since 2006 and breaks a 25-year pattern in which Exxon investors have systematically rejected more than 60 climate- and good-governance-related proposals. Oil giant Chevron also held its annual meeting Wednesday in San Ramon, California, with investors rejecting every climate-related measure.
While Exxon investors still rejected the vast majority of the demands, it seems they can’t entirely tamp down this year’s calls for accountability. The heated public campaign against Exxon comes at a time when the industry is taking a hit from a plunge in oil prices. Last year, Exxon earned its smallest profit since 2002 and lost its top-ranked credit score after its debt more than tripled. Still, Exxon remains one of the most profitable companies in the world.
Perhaps the company’s most contentious meeting in decades, executives contended with one of the largest coalitions between activist shareholders and large-scale investors ever, with more than $8 trillion under their management. Groups including foundations, unions and several religious organizations brought forward resolutions this year.
Still, investors rejected nearly all of the measures, including proposals that would have forced Exxon to report to shareholders how the company would plan for the future under the Paris climate agreement, support a limit on global planetary warming to 2 degrees Celsius, insert a climate expert on its board, and provide reports on its lobbying activities and fracking.
This week’s meeting was Exxon’s first annual meeting since the Paris agreement was brokered, and since at least three state attorneys general launched investigations into allegations claiming the company intentionally misled the public about the risks and impacts associated with climate disruption.
A series of investigative reports published last year by InsideClimate News and the Los Angeles Times revealed that Exxon began its own internal research on climate disruption as early as the 1970s and understood early on that carbon emissions from burning fossil fuels were driving planetary warming. It then took active steps to cover up its findings.
Since the reports were published, Democratic members of Congress and presidential candidates Sen. Bernie Sanders (I-Vermont) and former Secretary of State Hillary Clinton have pressed the Department of Justice to consider bringing a civil racketeering case against Exxon. The department has since referred the requests to the FBI’s criminal division, but it could still file a civil complaint against the company.
Exxon Scientist’s Granddaughter and Flood Victim Speak Out
Joining a group of about 80 climate justice activists outside the Exxon meeting in Dallas was Anna Kalinsky, the granddaughter of James Black, a senior Exxon scientist who warned the company about the risks and impacts associated with burning fossil fuels on the global climate system — in 1977.
“Instead of working to address climate change, [Exxon] invested in lobbyists and front groups that contradicted the very science my grandfather had warned them about,” Kalinsky told activists. “When we ignore science, and let companies and government agencies deceive us with spin about the damage that their products cause, we all lose.”
Kalinsky also addressed Exxon executives inside the shareholder meeting, going into more detail about her grandfather’s scientific findings and rebuking Exxon’s funding of groups “that spread misinformation about the science.” The company has spent tens of millions of dollars funding the climate denial networks since 1998.
Renee Boschert, whose home was devastated after extreme floods in Wimberley, Texas, also addressed activists and executives Wednesday. Boschert’s home flooded after the Blanco River rose more than 30 feet above its high-water mark in a series of storm surges that have been described as biblical, and among the most extreme in the state’s history. Her home was damaged in one of the five federal disasters involving floods declared in the state during the past two years. Scientists have linked increased flash flooding to anthropogenic climate disruption.
“My husband and I were lucky to escape with just minutes to spare, but we know that climate-related disasters are going to keep getting worse,” Boschert said. “Companies that hid the dangers of climate change could be on the hook when it comes to paying for climate damage, so it’s in shareholders’ best interest for Exxon to stop funding organizations that dispute the science.”
Kalinsky, Boschert and other activists who addressed executives at the meeting are pushing back on Exxon’s funding of the American Legislative Exchange Council (ALEC), which generates model legislation that advances the interests of its corporate members throughout state legislatures. Organizers with Climate Truth in Dallas called on Exxon to drop its dues-paying membership with ALEC over its denial of anthropogenic climate disruption.
During the shareholder meeting, Exxon CEO Tillerson said that cutting oil production was “not acceptable to humanity,” and maintained that Exxon has no intention of leaving ALEC, while also touting the company’s investment of $7 billion in environmental technology and more than three decades climate research — without mentioning that the company betrayed that same research by advocating skepticism about climate disruption publicly.
Tillerson gave a presentation to shareholders explaining that the company expects oil and natural gas will provide about 60 percent of the world’s energy demand by 2040, even with the Paris agreement in place.
Molly Rooke, a local activist with 350.org, has been organizing actions outside Exxon’s shareholder meetings for the past 15 years. She says the company’s statements have only changed slightly in that time. “Their statements got a little bit more mainstream and a little less denial, but … the doubt was still there in their rhetoric.”
Tillerson’s predictable response is part of the reason why environmental organizations like 350 are shifting their focus away from shareholder activism and making the case for resolute divestment. Bill McKibben, who co-founded 350, argued that the reason why some groups are putting shareholder proposals forward this year is because they’re under pressure to divest and are attempting “to greenwash their way out of real action.”
“There’s just no good excuse to be holding Exxon stock anymore,” Rooke said in Dallas. “I know that there are a lot of good people still in there working on shareholder engagement.… But at this point, doing a shareholder proposal, even if it passes, is kind of like rearranging deck chairs on the Titanic.”
Exxon’s Strategy for Counterattack
Even though Exxon executives don’t seem to be taking its investors shareholders proposals very seriously, its counterattack strategy does indicate executives are nervous about the ongoing legal probes. Consultants for the industry have alleged the state attorneys general are colluding with climate activists and have questioned whether the Rockefeller Family Fund and other foundations have helped to fund the Los Angeles Times’s and Inside Climate’s Exxon investigations.
Industry lobbyists have also revealed the company has reached out to conservative attorneys general to see whether they would be interested in investigating where environmental groups are getting their funding. Despite a lack of traction on their inquiries, the company has found an ally: Texas Attorney General Ken Paxton.
Rather than seeking justice for Texans who, like Boschert, are on the frontlines of climate disruption’s impacts — or joining with other state attorneys general seeking to investigate Exxon for its deceptive practices — Paxton is doing just the opposite.
He attempted to block Virgin Islands Attorney General Claude Walker’s inquiries into whether Exxon deceived the public and its shareholders about climate science in violation consumer protection laws. Walker issued a subpoena in March for Exxon’s internal communications regarding climate disruption. In response, Exxon filed a lawsuit seeking to squelch Walker’s subpoena, arguing it violated Exxon’s free speech rights.
Paxton and Alabama’s attorney general filed a brief this month backing Exxon’s free speech argument, calling the subpoena “an effort to punish Exxon for daring to hold an opinion on climate change that differs from that of radical environmentalists.” Walker and other Democrats have pushed back on Exxon’s corporate speech case, arguing that the First Amendment is not a defense against fraud.
In addition to political maneuvering, Exxon is also directly going after groups like 350. Executive Director May Boeve received a letter this week from 13 members of Congress alleging the group may be violating the company’s free speech rights, demanding organizers hand over their communications with state attorneys general and private organizations regarding their push for an investigation into Exxon.
“It’s priceless that Exxon and its allies in Congress are claiming that their First Amendment rights are somehow being violated by people taking action. This company has been holding ‘closed-door meetings’ with politicians for decades, and the result is a planet in crisis,” Boeve wrote. “They clearly want to block our right to petition the government, chill our free speech and freedom of association, and use governmental power to find and deter anyone that shares our values and wants to join us to call for climate justice.”
Whether Exxon’s counter-strategy will prove effective remains to be seen. In addition to ongoing legal probes the company faces, the New England environmental firm Conservation Law Foundation announced a civil lawsuit this month against Exxon for “its decades-long campaign to discredit climate change and knowingly endanger people and communities,” and for its impact on greater Boston communities who have been subjected to environmental risks in violation of the Clean Water Act and the Resource Conservation and Recovery Act. The Conservation Law Foundation’s civil suit is the first by an environmental firm over Exxon’s decades of dishonesty and the organization expects many other legal actions against the oil giant to follow.