Major Exxon Investor Warns Shareholders Not to Give Into Global Warming Hysteria

An activist-led measure at Exxon Mobil Corp.’s next annual meeting addressing global warming could financially wipe out the company’s largest shareholders, one long-time Exxon shareholder said.

BlackRock and Vanguard Group are toying with the idea of supporting an investor-created proposal that would force Exxon to measure how regulations limiting greenhouse gasses could impact the value of the company’s oil assets, sources told The Wall Street Journal Thursday.

The measure is receiving intense scrutiny from shareholders who worry Exxon could get wobbly-kneed in the face of the environmentalist push.

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Some analysts believe the measure, if passed, could indicate the full weight and force powerful investors and money managers that are concerned about climate change have on energy companies. Exxon is opposed to the measure and will find out if Vanguard and BlackRock support the measure at the company’s annual meeting on May 31.

But Steve Milloy, a lawyer-statistician and climate skeptic, believes Exxon’s shareholders are flirting with the devil.

Coal companies know what happens when shareholders entertain measures that could potentially affect their financial bottom line, said Milloy, a global warming skeptic and founder of the website JunkScience.com.

“It’s kind of ironic that you have a president who wants to roll back regulations against oil producers, yet companies like Exxon want more rules to be heaped on them,” said Milloy, an Exxon shareholder who will speak in opposition to the measure at the meeting next week.

Milloy has been advocating the oil producer end its support for a national carbon tax, rebuke the Paris Agreement on climate change, and discontinue funding climate research

“The threat would have been hypothetical no more than five years ago,” he added, “but the threat is real now. Shareholders get zeroed out because of all of this global warming hysteria.”

Climate activist shareholders hold a different view.

Timothy Smith, a director at Walden Asset Management, which backs the Exxon measure, for instance, told reporters that a few short years ago investors were not talking about the effect climate change has on business, but “now the evidence just slaps you in the face.”

BlackRock has not publicly supported the measure.

“No decision has been made regarding our vote at Exxon’s Annual Shareholder Meeting. Our deliberations continue and we look forward to continued engagement with the company,” said Zach Oleksiuk, head of Americas for BlackRock’s investment stewardship group.

Vanguard could be dissuaded from joining the climate crowd if Exxon offers concessions, such as allowing non-employee directors to meet with investors, the sources said. Similar concessions have worked in the past on other measures addressing global warming.

“Directors at any company who don’t engage with those on whose behalf they serve risk losing investor support,” Glenn Booraem, a principal at Vanguard, said in a statement about possible concessions Exxon should consider.

The measure comes as Exxon continues beating off an attorney general-led campaign to force the Texas-based oil producer into turning over decades worth of documents allegedly showing it hid knowledge about global warming from the public.

Much of the crusade against Exxon’s climate history is based on reports from liberal-leaning media outlet InsideClimate News and Columbia University, which claim Exxon has known the risks of global warming for decades but kept such knowledge under wraps.

Milloy, for his part, submitted a resolution in April through a mutual fund he called the Free Enterprise Action Fund, which requests Exxon change its bylaws blocking stockholders from filing resolutions.

His plan came after an activist-led ploy to force Exxon into naming a climatologist to the company’s board of directors. It relented and elected Susan Avery, a former director of the Woods Hole Oceanographic Institution.

Avery, a climate scientist specializing in atmospheric dynamics and climate change, helped the National Oceanic and Atmospheric Administration cobble together climate research. Milloy thinks activists with political views have been undercutting the company’s interests for years.

BlackRock received scorn and relentless criticism at Exxon’s annual meeting last year after it opposed a similar proposal. The group will make the disclosure of climate risks a key point of discussion with Exxon managers this year.

Next week’s investor-led measure hinges on many of Exxon’s largest shareholders, most of whom own about 20 percent of the company, according to Anne Simpson, investment director for sustainability at the California Public Employees’ Retirement System. CalPERS has worked on oil and gas divestment issues in the past.

Simpson added: “At the end of the day, the outcome will turn on what do the big fund managers and mutual funds do.”

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One Comment

  1. Organic food is not healthier for you, nor is it better for animals and the environment than conventionally farmed food.
    Scientists have been searching for the nutritional differences between organic and non-organic crops since 1958, but this research has consistently turned up empty-handed.
    View Source
    A 2012 Stanford University study failed to find significant differences in nutritional quality between organic and non-organic crops.
    View Source
    Research at Oregon State University showed similar outcomes for cows between conventional and organic dairies.
    View Source
    Related reading: “How to Spend $75 Billion to Make the World a Better Place” – Bjorn Lomborg
    View Source
    Organic farming doesn’t use pesticides, right? Actually, it uses “natural” pesticides, some of which pose major health risks.
    One U.K. study found that 95% of consumers buy organic foods in order to avoid pesticides. However, the truth is that organic farms make liberal use of up to 20 “natural” pesticides, like copper sulphate and pyrethrin, both of which pose health risks. Another supposedly “safe” pesticide widely used in the U.S. is rotenone, which can cause symptoms similar to Parkinson’s Disease and can be lethal to humans and other species.
    View Source
    Related reading: “The Skeptical Environmentalist: Measuring the Real State of the World” – Bjorn Lomborg
    View Source
    MYTH: Organic farming is better for the environment. The truth is, it causes as many or more issues than conventional crops.
    When calculated on a per-good-produced basis, it turns out that organic crops actually contribute as much or more to nutrient pollution as more conventional crop production methods.
    View Source
    Because organic farming requires more land to produce the same yields as conventional farming, the overall impact on the environment is actually worse in organic farming.
    View Source
    Related reading: “How to Spend $75 Billion to Make the World a Better Place” – Bjorn Lomborg
    View Source
    Organic food is a first-world luxury. People in developing countries simply cannot afford food that is more expensive and less abundant.
    Many people, particularly in developing countries, simply cannot afford higher food costs or lower food production, which are the inevitable results of organic farming.
    View Source
    Organic foods can cost between 10 percent to 174 percent more than conventionally produced foods.
    View Source
    Consumers in Australia report being willing to pay 16 to 23 percent higher prices for organic foods; however, choosing to pay higher costs is a luxury the poor cannot afford.
    View Source
    Related reading: “The Skeptical Environmentalist: Measuring the Real State of the World” – Bjorn Lomborg
    View Source
    A comprehensive 2012 Stanford study on organic foods found they are not nutritionally superior to conventional foods.
    A 2012 Stanford University study failed to find significant differences in nutritional quality between organic and non-organic crops.
    View Source
    Scientists have been searching for the nutritional differences between organic and non-organic crops since 1958, but this research has consistently turned up empty-handed.
    View Source
    Related reading: “The Skeptical Environmentalist: Measuring the Real State of the World” – Bjorn Lomborg
    View Source
    If U.S. farming were all organic, we would need to convert an area bigger than the size of California entirely to farmland.
    Bjorn Lomborg on the inefficiency of organic farming: “If U.S. agricultural production were entirely organic, it would mean we’d need to convert an area bigger than the size of California to farmland. It is the same as eradicating all parklands and wild lands in the lower 48 states.”
    View Source
    Related reading: “The Skeptical Environmentalist: Measuring the Real State of the World” – Bjorn Lomborg
    View Source
    Related reading: “How to Spend $75 Billion to Make the World a Better Place” – Bjorn Lomborg
    View Source
    People in the developing world need access to cheaper food, which means more access to effective fertilizers and pesticides, not less.
    Organic foods can cost between 10 percent to 174 percent more than conventionally produced foods.
    View Source
    Many people, particularly in developing countries, simply cannot afford higher food costs or lower food production, which are the inevitable results of organic farming.
    View Source
    Related reading: “How to Spend $75 Billion to Make the World a Better Place” – Bjorn Lomborg
    View Source
    A major European study found that to use organic methods to produce the same amount of crops we do now, we’d have to use 200% more land.
    A major European study on organic farming found that “to produce the same gallon of milk organically, you need 59% more land. To produce meat, you need 82% more land, and for crops, it is more than 200%.”
    View Source
    Related reading: “How to Spend $75 Billion to Make the World a Better Place” – Bjorn Lomborg
    View Source
    Related reading: “The Skeptical Environmentalist: Measuring the Real State of the World” – Bjorn Lomborg
    View Source
    MYTH: Organic farming doesn’t use pesticides. The truth is, it can use any pesticide that is “natural,” like rotenone and pyrethrin.
    Contrary to popular belief, organic farms make liberal use of up to 20 “natural” pesticides, like copper sulphate and pyrethrin, both of which pose health risks. Another supposedly “safe” pesticide widely used in the U.S. is rotenone, which can cause symptoms similar to Parkinson’s Disease and can be lethal to humans and other species.
    View Source
    Related reading: “How to Spend $75 Billion to Make the World a Better Place” – Bjorn Lomborg
    View Source

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