I’ve written before that as an investment portfolio decarbonization strategy, divestment doesn’t make much sense in the big picture. Instead, engaging with portfolio companies about their carbon management and transition economy plans has a better chance of success. But how investors engage with companies – and how companies respond – is changing. Net Zero Investor reports that
“… oil giant Exxon Mobil has filed a case in a Texas district court in a bid to prevent an activist resolution at this year’s AGM due to take place on 23 May. It is the first time that Exxon Mobil is taking an activist shareholder to court. Exxon claims that the Follow This resolution is repetitive and overly prescriptive – under SEC rules, shareholders are not allowed to resubmit a proposal if they fail to gather increased investor support. Last year, Follow This filed a resolution requesting that Exxon Mobil establish Scope 3 targets in line with the Paris Agreement. However, the proposal received the backing of only 10.5% of investors…
Follow This founder Mark van Baal confirms that the group had indeed put forward another proposal for this year’s AGM. The exact demands of the 2024 resolution have not yet been disclosed but last year’s Exxon resolution did not specify how Exxon Mobil was to achieve Paris alignment for its Scope 3 emissions. ‘The strategy for how to achieve this target is entirely up to the board’, the 2023 resolution states.
Tumelo’s Georgia Stewart … predicts that institutional investors might hold back in putting forward their own resolutions out of fear of being taken to court… [A] side-effect of this is that the debate instantly becomes personal, rather than being centred on climate change. ‘That could be completely counterproductive to the things we are trying to achieve.'”
I guess with everything else around climate, decarbonization and ESG changing, it was reasonable to expect that investor engagement tactics – and how companies react to those – would change as well.
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Photo credit: Robert – stock.adobe.com
