ExxonMobil to publish report on risks of climate change
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ExxonMobil will publish a carbon asset risk report on the company website describing how it assesses the risk of stranded assets from climate change. The report, which will be issued in response to a shareholder resolution and is the first one ever to be published on the company’s website, will provide investors with more transparency into how ExxonMobil plans for a future where market forces and climate regulation makes at least some portion of its carbon reserves unburnable.
This is the first successful withdrawal with an oil and gas producer on the carbon asset risk issue this proxy season. The proposal reflects increasing investor concern about the issue of stranded assets and builds on a shareholder initiative coordinated by Ceres, in which shareholders representing $3 trillion in assets under management, asked 45 companies for increased disclosure about whether they are addressing carbon-related risk, the impact on capital expenditure decisions, and whether they are implementing strategies to avoid stranded assets. Carbon asset risk proposals were filed at 10 fossil-fuel companies this year.
Arjuna Capital, the sustainable wealth management platform of Baldwin Brothers Inc., and As You Sow, a non-profit promoting environmental corporate responsibility, have agreed to withdraw their shareholder resolution in exchange for ExxonMobil providing information to shareholders on the risks that stranded assets pose to the company’s business model, how climate risks affect capital expenditure plans, and other related issues.
“We’re gratified that ExxonMobil has agreed to drop their opposition to our proposal and address this very real risk. Shareholder value is at stake if companies are not prepared for a low-carbon scenario,” said Natasha Lamb, director of equity research and shareholder engagement at Arjuna Capital. “More and more unconventional ‘frontier’ assets are being booked on the balance sheet, such as deep-water and tar sands.”
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