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The resolution asks the ExxonMobil Board to adopt a
company policy to promote renewable energy sources consistent
with the Cabinet-level council newly-created to enhance
renewable energy sources and to develop strategic plans
to help bring bioenergy and other renewable energy sources
into ExxonMobil's energy mix. It asks that shareholders
be kept advised regularly as to the ways the Company
is moving from its self-stated "insignificant percentage
of the company's business" in fossil fuels to the promotion
and marketing of renewables.
A related resolution asks the Board Compensation Committee
to consider non-financial factors, including social
and environmental concerns, in determining compensation
for top executives.
Shareholders in every company have a choice in how
to address global warming. In its simplest terms, global
warming is a challenge of risk and uncertainty brought
about by the inadvertent consequences of fossil fuel-powered
economic growth.
Delaying solutions increases the likelihood that global
warming will be a cost that is widespread, unpredictable,
economically destructive and irreversible.
- While the potential costs of global warming are
agreed to be high, the range of potential costs is
quite wide. The UN Environment Program and Munich
Re predict global warming will cost the world $300
billion per year by 2050, while Innovest says the
costs in the US alone will range from $100 billion
to $300 billion.
- The costs will be spread amongst many economic sectors.
Tourism, construction, basic services, property values,
agriculture and timber operations are just some of
industries that may be hit, according to the Harvard
Business Review and the Chartered Insurance Institute.
- Long-term investments throughout the economy risk
devaluation due to the impacts of global warming.
However, support for urgent and significant emissions
reductions and a transition to clean energy will create
an investment that is manageable, productive and wealth
generating. In recent years insurers, financial publications,
Fortune 500 companies and oil majors have supported
stated their support for emissions reductions and development
of alternative energy sources.
But ExxonMobil continues to state that not enough is
known about global warming to warrant a public policy
response. The company appears to be unconcerned with
the financial risks presented by failing to adopt emissions
reducing policy measures. The company is delaying the
measures which are needed to cut the losses that global
warming is likely to impose.
Conclusion: Given ExxonMobil’s size and market
share, its response to the climate crisis makes it a
key player in determining how much risk shareholders
and the global economy will be exposed to. ExxonMobil
shareholders can reduce their long-term exposure to
risk and uncertainty by urging the company to take a
responsible position on global warming.
For a more detailed discussion of the resolution, click
on Issue
Analysis.
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