by Sue Smith
Sue Smith is the Vice-Moderator of Presbyterians for Earth Care, a member of the First Presbyterian Church of Rumson (NJ), and a GreenFaith Fellow.
I have to admit, when I read the Presbyterian News Service story, Faith-based investors gain ground with ExxonMobil on climate change, my first thought was that this could be the death knell of fossil fuel divestment. It sounded like the proof that having a seat at the table was the most important thing. However, on closer look, this actually could be a new beginning for the divestment movement.
Let’s look at the proposal itself. The article states that the proposal urges “ExxonMobil to better assess the company’s climate change related risks.” That is true. It goes on to say, “The proposal calls on the oil giant to align itself with the 2015 Paris Climate Agreement asking for a global target of keeping global temperature rise to 2 degrees C or less.” This is not exactly what the proposal calls for. Here is the proposal:
RESOLVED: Shareholders request that beginning in 2018, ExxonMobil publish an annual assessment of the long-term portfolio impacts of technological advances and global climate change policies, at reasonable cost and omitting proprietary information. The assessment can be incorporated into existing reporting and should analyze the impacts on ExxonMobil’s oil and gas reserves and resources under a scenario in which reduction in demand results from carbon restrictions and related rules or commitments adopted by governments consistent with the global agreed upon 2 degrees target. This reporting should assess the resilience of the company’s full portfolio of reserves and resources through 2040 and beyond, and address the financial risks associated with such a scenario.1 (Emphasis the author’s)
This proposal calls on Exxon Mobil to report, not do, not align.
The Presbyterian Church’s Office of Faith Based Investing and Corporate Engagement, and other faith-based investors, must be commended for their work on this issue. They are the ones that kept talking with the company, kept bringing shareholder resolutions. It was this hard work that finally brought the institutional investment management firms, who normally vote with management, to the table to push management to change their ways. But make no mistake, it was the institutional investment management firms that got the vote to the 62%. And the reason the church was behind the proposal is very different from the institutional investors.
The press said that BlackRock voted against management and Vanguard had likely done the same.2 This is how BlackRock and Vanguard make proxy decisions:
BlackRock votes (or refrains from voting) proxies for each Fund for which it has voting authority based on BlackRock’s evaluation of the best long-term economic interests of shareholders.3
Vanguard: The overarching objective in voting is simple: to support proposals and director nominees that maximize the value of a fund’s investments—and those of fund shareholders—over the long term.4
Compare these to the stated purpose of the PCUSA engagement: “We believe Jesus Christ is at the heart of everything we do, and that includes how we invest our money. As ambassadors of the values and ethics of the Presbyterian Church (U.S.A.), MRTI works to ensure that the companies included in the portfolios of the Board of Pensions and Foundation understand the mission goals set by the General Assembly and hopefully work towards aligning their policies and practices to them.”5
Two very different values – maximizing value for shareholders versus maximizing the values of the Jesus we follow.
The big win is this – the large institutional investment management firms are now at the table. They will push ExxonMobil, because at the end of the day it is shareholder value that ExxonMobil will respond to. Where does this leave faith-based investors, including the PCUSA? I believe there is now no room for them at the table. The big boys are seated there now. The PCUSA provided the prophetic witness to get them at the table.
Now it is the time for a new prophetic witness. Let the big boys move ExxonMobil to do the right thing regarding renewable energies. That is the future of shareholder value. The church now needs to raise its moral voice more than ever. The church can no longer invest in the fossil fuels that ruin God’s good creation. In Genesis, “God said, ‘Let us make humankind in our image, according to our likeness; and let them have dominion over the fish of the sea, and over the birds of the air, and over the cattle, and over all the wild animals of the earth, and over every creeping thing that creeps upon the earth.’” (Gen. 1:26. NRSV). We were not given dominion over the very fundamentals of creation – air, water, earth, and firmament. It is not OK for us to ruin those very fundamentals.
As followers of Jesus we are called to go out to the ends of the earth. We are not called to sit in the upper room looking at our shareholder value. Remember the words of Paul, “Beloved, I do not consider that I have made it my own; but this one thing I do: forgetting what lies behind and straining forward to what lies ahead, I press on toward the goal for the prize of the heavenly call of God in Christ Jesus.” (Phil. 1:13-14, NRSV). The future is renewables. It is time to divest from fossil fuels and strain forward to the future of renewables.
1 ExxonMobil 2017 Proxy Statement, http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-reportsproxy, accessed June 4, 2017.
2.https://www.washingtonpost.com/news/energy-environment/wp/2017/05/31/exxonmobil-is-trying-to-fend-off-a-shareholder-rebellion-over-climate-change/?utm_term=.23eae5c62e6a, accessed June 4, 2017
3 https://www.blackrock.com/corporate/en-br/about-us/investment-stewardship/voting-guidelines-reports-position-papers, accessed June 4, 2017.
4 https://about.vanguard.com/vanguard-proxy-voting/voting-guidelines/, accessed June 4, 2017.
5 https://www.presbyterianmission.org/story/0617-invest/, accessed June 4, 2017.