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SEC Allows Activist Nuns’ Climate-Change Resolution

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The U.S. Securities and Exchange Commission determined March 22 that ExxonMobil Corporation must for the first time ever allow a vote to proceed on a proxy shareholder resolution submitted by members of the Interfaith Center on Corporate Responsibility. ExxonMobil had attempted to block the resolution with the SEC on the grounds it was vaguely written, the company’s current business practices already aligned with the ICCR resolution and current U.S. regulations. Because any plans for climate-change mitigation in the near future inherently remains vague until specific policies are enacted, the company argued, the SEC should honor ExxonMobil’s No Action Letter on the resolution.

The resolution was filed by ICCR members the Sisters of St. Dominic of Caldwell, NJ, and other faith-based investment groups. If passed, the resolution would require ExxonMobil adopt a “Policy to Limit Global Warming to 2°C.” The passive-aggressive resolution even goes so far as to accuse the company of funding “climate denial” while at the same time sending the company hunting for unicorns:

As a large GHG [greenhouse gas] emitter with carbon intensive products, ExxonMobil should robustly support the global framework to address climate change resulting from the 21st Conference of Parties of the United Nations Framework Convention on Climate Change in December 2015. Constructive engagement on climate policy is especially important given Exxon’s historical role in financing climate denial and misinformation campaigns on climate change. Failing to address this could present reputational risk for ExxonMobil. In contrast to ExxonMobil, ten oil industry peers including Total, Shell, BP, and Saudi Aramco, and business leaders in other industries, support an international agreement to limit warming to 2°C.

Resolved: Shareholders request that the Board of Directors adopt a policy acknowledging the imperative to limit global average temperatures to 2°C above pre-industrial levels, which includes committing the Company to support the goal of limiting warming to less than 2°C.

Supporting Statement: We believe that ExxonMobil should assert moral leadership with respect to climate change. This policy would supplement ExxonMobil’s existing positions on climate policy.

On behalf of ExxonMobil, Louis L. Goldberg of Davis Polk & Wardell LLP, responded on Feb. 29:

While the Proponent Letter claims that all the Proposal is asking is that the Company “support the global framework” resulting from the Paris Agreement [COP21], that global framework is in fact insufficient to limit global average temperature increases to 2°C. As demonstrated in the Company No Action Letter, the Paris Agreement itself acknowledges that the intended reductions submitted by the parties to date are insufficient to meet the 2°C target. Further, the Paris Agreement itself is inconsistent in the specific temperature goal it sets; in places, it refers to the need to limit temperature increase to “well below” 2°C, and in other places it refers to simply limiting increases to “below” 2° C. Given that another aspirational target set in the Paris Agreement is to limit temperature increase to 1.5°C, the difference between ”well below” and “below” 2°C could be quite substantial.

While this may seem inside-baseball to some, Mr. Goldberg adds other salient points, including the U.S. GHG reduction targets announced at COP21 were predicated on the Clean Power Plan, which was subsequently stayed by the U.S. Supreme Court.

Having read the SEC determination in the matter (included with the documents linked above), your writer is left scratching his head as to why a resolution so vaguely written wasn’t nixed. Here’s hoping clearer heads prevail when the resolution is voted on at the company’s general meeting this May 25.

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Bruce Edward Walker has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. Most recently, he was managing editor of The Heartland Institute's InfoTech & Telecom News. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2007 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past three years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Midland, Mich., with his wife Katherine.

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