Executives at ExxonMobil and Chevron will face a showdown over climate policies Wednesday, with calls for greater environmental responsibility from shareholders at the oil majors' annual general meetings.
Both ExxonMobil and Chevron are urging voting shareholders to reject proposals that would force the companies to release climate impact reports, increase transparency of climate change lobbying efforts, adopt greenhouse gas emission (GHG) reduction targets, and in Exxon's case, appoint an independent environmental specialist to its executive board.
While ExxonMobil admits that climate change risks are "serious" and warrant "thoughtful action," proxy statements released ahead of its AGM argue against appointing "single issue candidates" to its board, and states that it already has frameworks in place that provide "a foundation for sound environmental management."
Both companies are also resisting stockholder proposals for climate impact reports, with Chevron saying GHG considerations were already integrated into business plans, warning that further disclosure posed competition risks - giving rivals insight into internal analysis, carbon pricing, and reserves base.
Earlier this month, a letter signed by 1,000 professors from over 40 global universities, including Oxford and Ivy League colleges like Harvard, was sent by Positive+Investment — a campaign group launched by Cambridge students — to Exxon and Chevron's top 20 shareholders urging they pass the resolutions.
But institutional shareholders including Norway's $872 billion sovereign wealth fund, the Church of England, and the U.S.'s largest state pension fund are already throwing their weight behind the climate cause.
Norges Bank Investment Management (NBIM) publicly disclosed that it plans to vote in favor of climate impact assessment reports for both Chevron and Exxon, telling reporters earlier this month that it would relentlessly push the companies to be more open about their climate change strategies, even if the proposals didn't pass at this year's AGM.
According to its 2015 holdings report, NBIM holds a 0.85 percent stake in Chevron worth $1.45 billion, and a 0.78 percent stake in Exxon worth $2.54 billion.
In a shareholder letter, California's state pension fund, Calpers, said it also plans to vote for the adoption of climate change impact reports at Chevron, ignoring executive recommendations to vote down the proposal.
Calpers said the move would "better enable investors to assess Exxon Mobil's long-term strategy and risk." Calpers' stake in Exxon is worth $1.06 billion, according to its 2014-2015 financial report.
Exxon said it was confident the company was addressing climate change-related risks, and assured investors that oil and gas demand wasn't going away any time soon.
"We believe all economic energy sources will be necessary to meet growing demand, and the transition of the energy system to lower carbon sources will take many decades due to its enormous scale, capital intensity and complexity," Exxon's proxy statement – released last month - explained.
"We believe that none of our proven hydrocarbon reserves are, or will become, stranded."
But Calpers highlighted that sector peers and commodity producers like BP, Royal Dutch Shell, Statoil, Rio Tinto, Anglo-American, Glencore and Suncor have already backed shareholder proposals for climate risk reporting.
Others, like French energy company Total, have been relatively vocal in the wake of December's climate change COP 21 summit in Paris, which saw world leaders agree a long-term goal of keeping the increase in global average temperature to well below 2 degrees Celsius above pre-industrial levels.
Following its own AGM Tuesday, Total's CEO Patrick Pouyanne outlined plans for 20 percent of its assets - worth $130 billion according to the Financial Times – to be invested in low carbon businesses by 2035.
"The energy world is evolving . . . There are new areas over the next 20 years beyond oil and gas that we think can be profitable," Pouyanne told the FT.
Exxon holds its AGM in Texas from 10:30 a.m. ET. Chevron's AGM starts at 11:00 a.m. ET.