Exxon Mobil shareholders on Wednesday approved a proposal calling for the oil company to disclose the impact on its business of compliance with global climate change guidelines, an issue at the heart of a probe by two state attorneys general.
A preliminary tally showed the non-binding proposal passed with 62.3 percent of ballots cast, the world's largest publicly traded oil company said. The sizeable increase over last year's 38 percent support for a similar report signaled the non-binding proposal was backed by at least some of Exxon's top institutional shareholders.
Exxon had stepped up efforts to persuade investors to vote against climate-related proposals at Wednesday's annual meeting with a campaign of calling, writing and lobbying shareholders in person.
The world's largest publicly traded oil company opposed the proposal requiring it to report on the risks to its business from new technologies and global climate change policies, insisting it already provides the information.
The stakes have gotten higher since the last vote. The business-impact issue is central to lawsuits by two state attorneys general alleging Exxon soft-peddled the risks to consumers and shareholders. Wall Street support of similar measures also has convinced energy companies including Occidental Petroleum to address the Paris climate accord's goal of keeping global temperature increases under 2-degrees Celsius.
Had the proposal garnered less than last year's 38 percent support, it would have endorsed Exxon's view which is that its current reporting is appropriate, said Rob Schuwerk, senior counsel for environmental think tank Carbon Tracker Initiative.
But with support this year in excess of 50 percent, the oil company will likely do more to explain potential business impacts from having to meet the Paris agreement's temperature goal, Schuwerk said prior to the vote. A result in between the two, he said, would have been "the hazy middle" that would still show growing investor interest in climate issues.
Exxon took a conciliatory approach in a letter to investors on Tuesday. Vice President Jeff Woodbury wrote that on many of the shareholder proposals "the corporation agrees with the underlying objective — we just have a different view on the best means to achieve it."
Prior shareholder letters insisted the proposals were misguided or ignored the company's efforts to spell out its position that even in a world intent on limited temperature rises, it would still need more oil.
Anne Sheehan, head of corporate governance at California State Teachers' Retirement System, which backed the additional climate reporting, said Exxon's letter had suggested the voting was at least very close and would go against the company.
"You're not going to do an eleventh-hour shareholder communication if everything was going swimmingly," she said in an interview.
In addition to the vote on the climate-impact report, Exxon holders considered proposals to shift spending to dividends and buybacks from oil exploration and on a proposal to require a report on its efforts to restrict emissions of methane, a greenhouse gas.
Exxon opposed all these proposals and has actively lobbied shareholders. This campaign "is a lot more intense than normal," said one investor, who spoke on condition of anonymity. "I think they're pulling out all the stops."