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Institutional investors help force oil giant to deal with climate change

Exxonmobil's management has been defeated by a majority of the company's shareholders, who want the US oil giant to make special climate calculations.

Photo: /ritzau/AP/Matt Brown/Arkiv

The day before it emerged the president Donald Trump was pulling the US out of the climate deal entered in Paris in 2015, management in one of the country's largest companies lost a climate battle to its shareholders.

A general meeting at the management of ExxonMobil in Dallas Wednesday was described by the Washington Post as a "shareholder rebellion," where several of the largest shareholders, including some of the world's largest asset managers, forced management in the company to make special climate calculations. This occurred via a resolution which was backed by 62.3 percent of shareholders, but was not backed by management.

In the resolution it was decided that the company will henceforth "analyze the impacts on ExxonMobil's oil and gas reserves and resources under a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the globally agreed upon 2 degree [Celsius] target," reports the newspaper. In other words, that the company will adhere to the consequences of the Paris climate deal.

The resolution notes that ExxonMobil is to assess the resilience of the company's full portfolio and reserves and resources ahead to 2040 and beyond, as well as address financial obligations involved in such a scenario.

Washington Post writes, that although the shareholder vote is secret, anonymous sources say that it was the major shareholders, such as Blackrock, the world's largest asset manager, as well as Vanguard and State Street, which were the "rebellion" leaders. Companies, which as the newspaper notes, normally do not exercise a particular active ownership of the company.

BlackRock and Vanguard are the largest shareholders in ExxonMobil with a total ownership of 13 percent, or what corresponds to a worth of USD 43.6 billion.

It marked Darren W. Woods' first annual meeting as CEO of ExxonMobil, after he took over from Rex Tillerson who now enjoys a post as Secretary of State in the Trump administration. Tillerson has previously stated that he is against scrapping the Paris deal.

English Edit: Lena Rutkowski

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