Exxon is fighting a plan hatched by major investors to push the oil giant to reveal how it influences climate policy

Facebook Email icon An envelope. It indicates the ability to send an email.

Email Twitter icon A stylized bird with an open mouth, tweeting.

Twitter LinkedIn icon

LinkedIn Link icon An image of a chain link. It symobilizes a website link url.

Copy Link lighning bolt icon An icon in the shape of a lightning bolt.

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .

• BNP Paribas Asset Management and other major investors are trying to push Exxon to disclose more details about how the company works to shape US climate policy.
• The shareholders submitted a climate-lobbying proposal for consideration at Exxon's investor meeting in the spring.
• Exxon is fighting back, asking the SEC to allow the company to omit the proposal from the ballot.
• The stakes are high: The same proposal gained majority support at Chevron last year, and now, more than ever, major investors are asking corporations to address climate risks.
• Visit Business Insider's homepage for more stories.

Sign up for our newsletter to get the latest on the culture & business of sustainability — delivered weekly to your inbox.

Exxon is fighting a plan, led by the asset management unit of one of the world's biggest banks, that would push the oil major to reveal in detail how it shapes US climate policy through lobbying, according to public documents and interviews with shareholders.

The plan centers around a proposal filed by BNP Paribas Asset Management and other big investors that asks Exxon to disclose how its lobbying efforts align with the Paris Agreement, a major international deal to limit global warming that President Joe Biden just rejoined. The same proposal came to a vote at Chevron's annual shareholder meeting last year — and won.

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in .

The investors want the proposal put to a vote at Exxon's annual shareholder meeting this spring. Exxon is pushing back. Earlier this month, the company asked the US Securities and Exchange Commission to rule "no-action" on the proposal. A no-action ruling would allow the company to omit the proposal from the ballot. The SEC declined to comment.

While it's not uncommon for companies to try to throw out shareholder proposals, the stakes for this one are particularly high. If the proposal goes to a vote this spring, it could pass or gain substantial support, pushing Exxon to lift the veil on its climate-related lobbying efforts, according to Adam Logan, senior director of oil and gas at the nonprofit Ceres.

Major investors including BlackRock, a top Exxon shareholder, are imploring companies to address climate risks. The Biden administration is also likely to bring even more scrutiny to fossil-fuel producers, Logan said.

Shareholders are pushing Exxon to act on climate change in other ways. Activist investor firm Engine No. 1 launched a campaign last year to get the company to invest more in clean energy and add new board members, which the group formally nominated on Wednesday.

Exxon is preparing to make changes in response to pressure from Engine No. 1 and other investors, the Wall Street Journal reported. It's not clear whether those changes will include more transparency around climate-related lobbying efforts.

"ExxonMobil will continue to update shareholders in the coming weeks on the company's strategy to build long-term, sustainable value for shareholders," the company said in a statement Wednesday. "It will also provide updates on company performance and actions to address climate change."

Exxon declined to comment on its climate lobbying disclosures. The company pointed Insider to a page on its energy and carbon summary that pertains to lobbying.

"ExxonMobil has supported the Paris Agreement since its adoption," the report states. "Policy solutions to address climate change should be balanced, recognizing the increasing global demand for affordable energy, which is vital to addressing global poverty, education, health and energy security."

Shareholders call for more transparency

The one-page proposal asks Exxon to report on how the company's lobbying efforts, including through trade groups, align with the goal of the Paris Agreement — that is, to limit average global warming to well below 2 degrees Celsius.

"Of particular concern are the trade associations and other politically active organizations that speak for business but, unfortunately, too often present forceful obstacles to progress in addressing the climate crisis," it states.

BMO Global Asset Management, Boston Trust Walden, Dana Investment Advisors, and Nordea Funds, are among the largest shareholders who co-filed the proposal alongside BNP Paribas Asset Management. Togehther the five investors backing the proposal own about $260 million worth of Exxon shares. (That number includes all shares owned by Nordea Bank, the umbrella company of Nordea Funds).

Investors are increasingly asking for details about how companies are spending their time and resources to shape public policy, said Logan of Ceres, which runs an investor network that supports the proposal.

"Part of the agenda on working on climate change is watching how companies try to influence public policy," said Timothy Smith, director of ESG shareowner engagement at Boston Trust Walden, an Exxon shareholder that co-filed the proposal. It has more than $11 billion in assets under management. "This is an issue that has the spotlight of investor attention."

Earlier this month, Total, a French multinational oil company, withdrew from the American Petroleum Institute — a powerful industry trade group that represents Exxon and most other major oil companies — after a review of the group's climate positions. (API has said it supports the Paris Agreement.)

Exxon increases its disclosures and asks the SEC to rule no action

After receiving the proposal, Exxon increased its lobbying disclosures related to climate change, according to Rosa van den Beemt, VP for responsible investment at BMO Global Asset Management, another co-filer.

Citing those changes, Exxon then petitioned the SEC to rule no action on the BNP proposal, according to a document dated January 5 (the same day that Exxon published its energy and carbon summary). Exxon told the SEC it had already "substantially implemented" the substance of the proposal.

Some shareholders disagree.

Smith and van den Beemt described the updated disclosure as a step forward. But they said it doesn't go nearly far enough, especially when it comes to trade groups. Exxon doesn't provide information about how much it pays trade associations, for example, or about how those dollars are used to lobby on climate issues, Smith said.

Smith said he and other investors need Exxon to be much more transparent about its relationship with trade associations and what the company is doing to change those relationships if the groups don't align with the Paris Agreement.

(BNP Paribas Asset Management declined to comment. BNP Paribas Asset Management is the investment unit of the world's 9th-largest bank and oversees over $500 billion in assets. The firm is reviewing Exxon's disclosures, according to Smith.)

The stakes are high. The proposal could pass.

The SEC has yet to say whether the proposal will reach the ballot. If it does, shareholders say it could pass and push Exxon to increase transparency around its climate lobbying efforts.

"We're pretty confident that it will get a good response from the investor community," van den Beemt said.

She points to one positive sign: BlackRock, Exxon's third-largest shareholder, voted in favor of the same proposal when it came to a vote at Chevron's annual meeting last year. When it passed, with 53% support, it spurred Chevron to produce a special report on its climate lobbying.

"We are asking companies to disclose a plan for how their business model will be compatible with a net zero economy," BlackRock chief Larry Fink wrote in his highly regarded annual letter to CEOs Tuesday. "Because better sustainability disclosures are in companies' as well as investors' own interests, I urge companies to move quickly to issue them."

BNP Paribas and some of its co-filers are still in discussion with Exxon and may yet pull the proposal, presumably on the condition that Exxon agrees to enhance its existing disclosures, according to the co-filers.

This story was updated to clarify in one instance that BNP Paribas' asset management division, and not BNP Paribas, is behind the push to increase lobbying disclosures at Exxon.