ExxonMobil Corp. and Chevron Corp. shareholders on Wednesday defeated resolutions to develop quantitative goals to reduce greenhouse gas emissions and to install environmental experts on their boards.
Most ExxonMobil shareholders joined CEO Rex Tillerson's lead in rejecting a strategy to develop emissions reductions goals, which received support from less than 10% of shareholders. They also turned back a resolution to install a climate change expert on ExxonMobil's board by close to 80%. They also voted not to require annual reports concerning the environmental impacts from unconventional drilling.
Only 9% of Chevron's shareholders voted for targets to reduce GHG emissions, and like ExxonMobil, only 20% wanted an independent director with environmental expertise.
Impassioned arguments were made at ExxonMobil's meeting by two religious leaders who represented thousands of shares. Michael Crosby, a Capuchin Franciscan who works with the Interfaith Center on Corporate Responsibility, urged ExxonMobil to be more forward thinking about climate change. His comments were echoed by Pat Daly of the Sisters of St. Dominic in New Jersey, who is executive director of the Tri-State Coalition for Responsible Investment.
Crosby said it was notable that "even Saudi Arabia last week indicated they see solar as the future for their country...The weaning has to begin...yesterday...We hear what you are saying about future energy needs and demands. It's true, we are a fossil-fuel driven society, but we can't remain so. The company has to be making plans for the future..."
Daly represented more than $1 trillion in asset investments in support of the climate change resolution. "Since last year the world has shifted," she said. "Investors have shifted. Some have divested of oil and gas stock and more are demanding transparency and action...Something is shifting here that we're not up to date on..."
Tillerson, who in past annual meetings has sparred with shareholders, questioned how competent current climate change models are concerning the future impacts of not reducing emissions. The United Nations' most current report concerning global emissions has "an extraordinarily broad range of outcomes." The models "aren't that good. Having said that, we strongly support continued scientific investigation and models, and they will get better. We know so much more today than we did 10 years ago." ExxonMobil is a science and engineering company at its core, he said.
"Mankind has an enormous capacity to deal with adversity and those solutions will present themselves as the realities become clear, either through proved modeling...or as they are evidenced to us," he told the audience. "I know that is a very unsatisfying answer to a lot of people. But it's an answer that a scientist or engineer would give you."
It's going to be an "extraordinary challenge" to meet the world's energy demands over the next several decades, "an important piece of which will be oil and natural gas, whether people like it or not. As to investment in renewables, quite frankly, Father Crosby, we choose not to lose money on purpose." Tillerson's response drew loud applause.
The CEO said it was not true that alternatives such as solar power were making any money. The "only way" alternative energies "survive is on the back of enormous government mandates and subsidies, which are not sustainable. We choose not to invest in businesses that require government mandates and subsidies for them to exist..."
ExxonMobil actually receives government subsidies for fossil fuels, Crosby argued. However, Tillerson shot him down. "We do not receive any subsidies," he said. "We operate under the tax code, which applies broadly to businesses everywhere."
Only 25% of ExxonMobil's shareholders voted in favor of a recurring resolution that would have required a report every year detailing the risks involved in worldwide unconventional drilling operations. Chevron shareholders defeated a similar resolution, with only 27% voting in favor of reporting more detailed information about the unconventional drilling operations.