Climate change takes center stage at Exxon, Chevron annual meetings

Tue May 24, 2016 1:31pm EDT
 
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By Ernest Scheyder and Terry Wade

HOUSTON (Reuters) - Exxon Mobil Corp (XOM.N: Quote) and Chevron Corp (CVX.N: Quote) will face their toughest-ever push by shareholders concerned about a warming world at annual meetings on Wednesday, as the Paris accord to tackle climate change ratchets up investor pressure on two of the world's largest oil companies.

The tension is most acute at Exxon, which has denied accusations from environmentalists that it purposely misled the public about climate change risks. The New York attorney general is investigating Exxon and it has complained of being unfairly targeted by special interest groups.

The raft of proposals up for vote at the two companies more than doubled to 11 this year, the latest sign that environmental concerns once considered peripheral by many investors have become mainstream. Even the most traditional shareholder groups are now urging companies to detail how they will plan for the future after 195 governments agreed in December to limit the rise in global temperatures to 2 degrees Celsius (3.6 degrees Fahrenheit) through combined national pledges to cut carbon emissions from fossil fuels.

"Companies like Exxon and Chevron, they're clinging to bygone assumptions," said Anne Simpson of CalPERS, which holds Exxon shares worth about $1 billion and has supported some of the measures. "This is their Kodak moment. If they want to still be in business in 30 years, they have to understand the changes that are taking place."

Though "Kodak moment" was originally an advertising slogan for film and cameras, it can now refer to Eastman Kodak's plunge into bankruptcy in 2012 after it failed to capitalize on the digital camera revolution. Simpson said Exxon and Chevron should ramp up investments in clean energy to avoid being caught by sudden technology shifts.

While BP Plc (BP.L: Quote), Statoil ASA (STL.OL: Quote) and other European oil companies have begun releasing myriad data points on how their businesses will respond to climate change, Chevron and Exxon have lagged them, critics say.

Success of any one of the climate-related votes at Wednesday's meetings is not certain.

  Continued...

 
The logo of Down Jones Industrial Average stock market index listed company Exxon Mobil is seen in Encinitas, California April 4, 2016.  REUTERS/Mike Blake