Quantcast

SEC Forces Exxon to Bring Climate-Friendly Accounting to Shareholder Vote

Climate

In a key win, the Oakland-based non-profit advocacy group, As You Sow defeated ExxonMobil's attempt to suppress an innovative, first of its kind shareholder resolution. The resolution asks Exxon to report its energy resources in an energy-neutral metric—BTUs—in addition to the traditional "barrels of oil equivalent" standard. Establishing a climate-friendly measure of energy reserves is a key step in incentivizing management, and the market, to support the transition to a clean energy economy.

Shareholders seek Exxon's leadership in beginning the inevitable transition to becoming a diversified energy company able to compete in a decarbonizing economy.

“We are pleased the SEC sided with shareholders concerned with climate risk," said Danielle Fugere, As You Sow's president and chief counsel. “Exxon must allow shareholders to vote on this first step on the path toward clean energy. Broad support will give management the latitude to develop a diverse and profitable low carbon business plan, while maintaining 100 percent BTU energy replacements."

In response to Exxon's SEC bid to stop the resolution from being voted on by shareholders, As You Sow successfully argued that, “... in a rapidly decarbonizing economy, fossil fuel companies must develop climate change-responsive business models" and one possible path is to transition into energy companies not dependent on carbon intense, climate damaging commodities.

Exxon currently accounts for its energy assets in “barrels of oil equivalent." As You Sow noted in its SEC reply that this accounting measure discourages a low carbon transition by linking the calculation of a company's assets, and therefore its value, to carbon based-metrics.

The resolution proposes reporting company energy resources neutrally, by category, so that all resources—including solar, wind, biofuels, geothermal and other renewables—will be accounted for as BTUs and valued. This metric decouples Exxon and its shareholders from oil's declining profitability, its escalating climate damage and Exxon's decreasing ability to economically replace its oil reserves.

Shareholders seek Exxon's leadership in beginning the inevitable transition to becoming a diversified energy company able to compete in a decarbonizing economy.

As You Sow is simultaneously filing a petition with the SEC to change its reporting requirements to an energy neutral metric, which will free the oil industry as a whole from oil-dependent financial valuation.

YOU MIGHT ALSO LIKE

Mark Ruffalo and Annie Leonard: We Must Rebuild Our Democracy

7 Arrested at 'Pancakes Not Pipelines' Protest at FERC

Rockefeller Fund Divests From Fossil Fuels, Slams Exxon

Bill McKibben: Fracking Has Turned Out to Be a Costly Detour

EcoWatch Daily Newsletter

A worker sorts out plastic bottles for recycling in Dong Xiao Kou village. China also announced Sunday that it would work to promote the use of recycled plastics. FRED DUFOUR / AFP via Getty Images

China, the world's No. 1 producer of plastic pollution, announced major plans Sunday to cut back on the sale and production of single-use plastics.

Read More
Catherine Flessen / Flickr / CC BY-NC-ND 2.0

By Jillian Kubala, MS, RD

Non-perishable foods, such as canned goods and dried fruit, have a long shelf life and don't require refrigeration to keep them from spoiling. Instead, they can be stored at room temperature, such as in a pantry or cabinet.

Read More
Sponsored
Tero Vesalainen / iStock / Getty Images

By Julia Ries

  • Two flu strains are overlapping each other this flu season.
  • This means you can get sick twice from different flu strains.
  • While the flu vaccine isn't a perfect match, it's the best defense against the flu.

To say this flu season has been abnormal is an understatement.

Read More
Pexels

By Andrew Joseph Pegoda

At least 40 percent to 90 percent of American voters stay home during elections, evidence that low voter turnout for both national and local elections is a serious problem throughout the U.S.

Read More
Arx0nt / Moment / Getty Images

By Alina Petre, MS, RD

Vitamin D, also known as the sunshine vitamin, is a fat-soluble vitamin essential for optimal health.

Read More