Exxon Mobil’s $36.1 billion profit may be the biggest in corporate history, but at
its AGM in Dallas on Wednesday, shareholders of the largest publicly
owned company in the world remained
angry about an issue that just won’t go away – global warming.

In 2005 Exxon achieved a net income of USD$36.1 billion, with a
return on capital employed of 31% and cash flow from operations and
asset sales of USD$54.2 billion. Cash returned to shareholders totalled
a massive USD$23.2 billion – though there was the small matter of
USD$81 million in CEO payouts.

But at yesterday’s meeting one shareholder, Father Crosby, a Franciscan
priest concerned specifically about the socio-economic impact of
climate change, urged shareholders to withhold their vote for directors
because the company continues to resist its competitors’ moves toward
enhancing their energy portfolios to include non-fossil fuels.

“We don’t think the board is making a wise decision in having all these
eggs called fossil fuels in the Exxon basket,” Crosby said. “We don’t
think they’re exercising the long term interest for people and the
planet and we’re urging people to withhold their vote for the board of
directors.”

Next to pipe up was a Dominican nun, Sister Patricia Daley, who spoke
on behalf of Investor Network on Climate Risk, an organisation with
assets of USD$3 trillion and more than USD $700 billion worth of
interest in Exxon Mobil. The organisation had previously requested a
meeting with independent members of the board to discuss concerns around climate risk, but
had received no reply. CEO Rex Tillerson promised the nun a meeting
with the staff.

Since Tillerson took over from former CEO and hardliner Lee Raymond,
the company has worked hard on its PR image over climate change and now
openly concedes that greenhouse gases cause climate change. However, it
seems it doesn’t care enough to factor climate change into the bottom
line. When asked directly whether he considered climate risk and its
impact to the company and its core businesses material, Tillerson
conceded that while the issue received “consideration within the board”
that the company “did not consider climate risk to be estimable or
material at this time.”

Sister Daley put forward a resolution to have someone appointed to the
board with expertise in energy, given climate change was becoming a
corporate governance issue. Andrew Logan from the Investor Network on
Climate Risk spoke in favour of the resolution: “Unfortunately there is
ample evidence that the board has not been doing an adequate job on
important strategic issues like climate change. Whilst competitors have
been investing in cutting edge, renewable technology and articulating
shareholder friendly strategies for a carbon constrained future, our
company continues to deny the scientific consensus that links human
activity and climate change.”

Logan pointed to the fact that Goldman Sachs rated Exxon last among
its peers in dealing with climate change. It’s going to take Exxon a
while to get with the program. After all, until recently it was funding
organisations like the Climate Enterprise Institute, which is currently
running an anti-global warming television campaign in response to Al Gore’s documentary An Inconvenient Truth. The CEI received $1.7 million (US) from Exxon Mobil between 1998-2004.

Peter Fray

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