SEC Orders Exxon to Let Shareholders Vote on a Climate Denier’s Resolution

The firm can bar shareholder resolutions for transparency on curbing carbon emissions, say regulators.

by | Mar 31, 2020

The Securities and Exchange Commission, for the second year running, has allowed Chevron and ExxonMobil to bar shareholder resolutions calling on the firms to fully disclose how they are working to curb their contributions to climate change.

But in their March 23 announcement, federal financial regulators approved an Exxon shareholder resolution sponsored by a noted climate skeptic, which calls for the firm to do a “greenwashing audit”

The shareholder behind the proposal is Steven J. Milloy, a longtime conservative lobbyist and political operative who publishes, a website that attacks established climate science.

Following the 2016 election, Milloy — who authored a book that year titled “Scare Pollution: Why and How to Fix the EPA” — worked on then-President-elect Trump’s Environmental Protection Agency transition team.

Milloy said he introduced the shareholder proposal in order to learn how much Exxon has spent on what he claims are “dishonest” public relations and advertising campaigns that portray the firm as “doing something on climate.” He has proposed similar resolutions in the past.

“Greenwashing is meant to protect management,” said Milloy. “They can go out in public and try to claim they’re doing something. It’s all just posing, they’re just posers, pretending they’re doing something on climate.”

Milloy, who E&E News reporter Scott Waldman described in 2018 as consistently “taking discredited positions for two decades” on the science behind public health and environmental regulations regarding air pollution, secondhand smoke, and climate change, said that if Exxon believed climate change was real, it would have acted by now to curb the firm’s contributions to the problem.

In 2015, InsideClimate News and the Los Angeles Times published investigations documenting how Exxon and other oil majors invested millions of dollars in public messaging campaigns promoting doubt about climate science in order to delay climate action, despite having been warned by in-house scientists of a looming climate catastrophe caused by burning fossil fuels. [Drilled News founder Amy Westervelt investigated the petroleum industry’s shift from researching to denying climate change in the first season of the Drilled podcast. – Ed.]

More recently Exxon has acknowledged the need to factor future climate regulations into its core business activities of producing oil and gas. But the firm has downplayed these risks to investors. New York unsuccessfully sued Exxon for climate-related securities fraud in 2019, but Mass. Attorney General Maura Healey’s lawsuit against the corporation, which contends that Exxon’s past climate disinformation campaigns defrauded consumers as well as investors, is still in play.

While Milloy’s proposal will get a shareholder vote, the SEC nixed resolutions by activist Exxon and Chevron shareholders that asked the oil giants to describe “if, and how” they plan to reduce their total contributions to climate change, and to align their “operations and investments with the Paris Agreement’s goal of maintaining global temperature rise well below 2 degrees Celsius.”

Chevron and Exxon each argued to the SEC that this information had been disclosed in previous reports. Exxon also alleged that its shareholders were seeking to micromanage the corporation.

Backers of the proposals included the Church of England and As You Sow, a non-profit shareholder advocacy group. Although their positions on climate change couldn’t be further apart from Milloy’s, all their resolutions agreed on one point: that fossil fuel companies must be more transparent on climate change.

“If companies do not intend to align with the global Paris goal, they should be clear with shareholders,” As You Sow president Danielle Fugere said in a statement. “Only through clear and comparable reporting can shareholders benchmark company actions and make sound investment decisions.”

In previous years, the SEC responded by letter to each request by a corporation to block voting on a shareholder proposal, and shared the reasoning behind its decision. But under newly-implemented rules for proposals submitted after November 2019, the SEC now posts its recommendations online without explaining its reasoning, or issuing separate letters for each proposal.

Sandford Lewis, an attorney for shareholders working with As You Sow, said in a statement that the rule changes were part of a business-friendly trend at the SEC that has made it more difficult for shareholders to file climate change-related resolutions, and easier for companies to block investors from voting on them.

Neither Chevron nor Exxon have released statements regarding the SEC’s rulings.

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Karen Savage is an investigative journalist who has reported on climate change-related itigation, environmental justice, policing, and other social justice issues. Her work has appeared in Climate Docket, Undark Magazine, In These Times, Project Earth, Juvenile Justice Information Exchange, Truthout, City Limits, and more. Karen is an alum of the Craig Newmark Graduate School of Journalism, where she won the Sidney Hillman Award for Social Justice Reporting.