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Church investors urge Exxon to address climate risk

Earth seen from Apollo 17 - Wiki image

Earth seen from Apollo 17 - Wiki image

Source: Church of England

A coalition of institutional investors, including many Catholic religious orders and the CoE Church Commissioners, who have four trillion dollars under management, led by New York State Comptroller Thomas P DiNapoli, as trustee of the New York State Common Retirement Fund (CRF), and the Church Commissioners for England, have again asked ExxonMobil to disclose how it will ensure its business will remain resilient as global efforts to mitigate climate change proceed.

The CRF and the Church Commissioners filed a similar proposal for consideration at Exxon's 2016 annual meeting. Despite Exxon's unsuccessful attempt to exclude the proposal from a vote at the meeting, it received support (www.osc.state.ny.us/press/releases/may16/052516.htm) from 38.2% of voting shareholders, a record for a climate change resolution at the company.

"As investors, we are concerned that, unlike many of its peers, Exxon has not taken the steps necessary to demonstrate its resilience in a lower carbon future," DiNapoli said. "We want to know what Exxon's strategy is for continued profitability as governments around the world live up to their commitment to the Paris Agreement two degree scenario."

Since last year's annual meeting, there has been extensive engagement with Exxon regarding the shareholder proposal.

"While our discussions have been positive, Exxon has not committed to provide the two degree scenario analysis investors expect from the oil and gas majors, and we have therefore again co-filed New York State's resolution," said Edward Mason, Head of Responsible Investment for the Church Commissioners for England. "We believe Exxon's board can and should support our reasonable disclosure request."

Exxon has acknowledged that regulatory frameworks already adopted and others under consideration could reduce demand for its products, make them more expensive, and delay the implementation of its projects. Several of Exxon's peers including BP, ConocoPhillips, Royal Dutch Shell and Total have endorsed two degree scenario analysis, as has the Financial Stability Board's Taskforce on Climate-Related Financial Disclosures, established by Mark Carney as FSB Chair. Major asset managers such as BlackRock and State Street Global Advisors have called for improved climate risk disclosures.

A number of major investors from Europe have joined the Church Commissioners in co-filing the proposal this year. (These are Amundi, APG (on behalf of ABP, bpfBouw and PPF APG), AXA Investment Management, BNP Paribas Investment Partners, CCLA, HSBC Global Asset Management, MN (including on behalf of PMT and PME) and Schroders.)

The Church Commissioners manage an investment fund of some £7 billion, mainly held in a diversified portfolio including equities, real estate and alternative investment strategies. The Commissioners' work today supports the Church of England as a Christian presence in every community.

Catholic investors include: Adrian Dominican Sisters, Benedictine Sisters of Baltimore - Emmanuel Monastery, Benedictine Sisters, Sacred Heart Monastery, Christian Brothers Investment Services, Church Commissioners for England, Congregation des Soeurs des Saints Noms de Jesus et de Marie, Congregation of Benedictine Sisters, Boerne, TX, Congregation of Divine Providence - San Antonio, TX, Congregation of St Joseph, Congregation of the Sisters of Saint Joseph of Chestnut Hill, Philadelphia, Daughters of Charity, Province of St Louise, Dominican Sisters of Hope, Dominican Sisters of San Rafael, CA (Congregation of the Most Holy Name), Maryknoll Sisters, Northwest Women Religious Investment Trust, School Sisters of Notre Dame Cooperative Investment Fund, Sisters of St. Dominic of Caldwell, NJ, Sisters of St Francis of Philadelphia, Sisters of St Joseph of Orange, Ursuline Sisters of Tildonk, US Province.