Ada Recinos, Deputy Press Secretary, Federal Communications, ada.recinos@sierraclub.org
New York, NY – A group of thirteen trustees and state financial officers, including New York City Comptroller Brad Lander and California Treasurer Fiona Ma, filed an exempt solicitation urging major asset managers to vote against ExxonMobil Director Joseph Hooley and CEO Darren Woods at the upcoming annual general meeting on May 29, 2024.
ExxonMobil has drawn criticism from investors after it filed an extreme and unprecedented lawsuit against shareholders Arjuna Capital and Follow This over a climate-related shareholder proposal. The filers have since withdrawn the resolution, but Exxon has refused to drop the lawsuit, a move which investors are calling intimidation and an attack on shareholder rights.
This letter comes one day after CalPERS, the largest pension fund in the US, announced that it filed an exempt solicitation with the Securities and Exchange Commission (SEC) calling on shareholders to vote against ExxonMobil’s entire slate of Board of Director candidates.
In March, the Sierra Club and Stop the Money Pipeline delivered over 7,000 petition signatures to public pension fund managers requesting they support climate-related shareholder resolutions, and withhold support for directors at companies misaligned with global efforts to keep warming below 1.5C, including at ExxonMobil. The Sierra Club also joined California Common Good in an open letter to CalPERS and CalSTRS that called on the pension funds to vote against the Exxon Board of Directors and deny new debt investments in Exxon. At a March pension board meeting, several CalPERS Trustees echoed the concerns of pension beneficiaries and community members who asked CalPERS to exit its Exxon investments and hold the company accountable. Board President Theresa Taylor called on staff for a plan, stating, “We are in a really imperative moment where all the work we’ve done for twenty years is being pushed back on.”
“A small handful of asset managers control a disproportionate amount of all assets under management, including the pensions and retirements of millions. It’s imperative that asset managers like BlackRock, Vanguard, State Street, and Fidelity vote responsibly at companies that are significantly misaligned with global climate goals, let alone when a company threatens shareholder rights.” Jessye Waxman, Senior Strategist at Sierra Club.
“Sierra Club applauds leaders from California to New York City for holding Exxon accountable for its extreme efforts to silence climate-concerned shareholders. Pension fund fiduciaries must continue to pay attention to long-term and systemic risks like climate change at Exxon and across the economy. We urge investors to follow their lead and stand up to corporate intimidation.” Allie Lindstrom, Senior Strategist at Sierra Club.
“Exxon’s actions have shown that it is committed to a business model that is harming the environment and communities on the frontlines of climate change,” said Jakob Evans, Policy Strategist with Sierra Club California. “CalPERS is standing as a leader by holding Exxon accountable and voting against its board. It must also stop funneling pension dollars into the bonds of companies like Exxon that are expanding fossil fuel operations. Rejecting Exxon will ensure that California’s public employees and future generations of Californians will be able to access and enjoy the state’s natural beauty free from the harms of oil and gas pollution.
In 2023, the four largest US asset managers – BlackRock, Vanguard, State Street, and Fidelity – supported most directors for reelection at US companies that are misaligned with 1.5C. A 2023 analysis of asset managers’ climate action (published by Reclaim Finance, ReCommon, Sierra Club, The Sunrise Project and Urgewald), found that the majority of the biggest 30 asset managers in Europe and the US do not have policies to escalate engagement pressure on polluting companies engaged in fossil fuel expansion.
Public pension funds have a clear duty to prioritize mitigating systemic climate risk because they are diversified, long-term investors. Experts project that the reductions in global economic output by 2050 could range from 11% to 29% if action is not taken to align with the goals of the Paris Agreement. These losses will impact the ability of pension funds to uphold the promise of a dignified and secure retirement. The shareholder process is a key tool for engaging with portfolio companies about mitigating long-term risks. As major clients of the world’s most influential asset managers, pension funds represent a growing demand for greater corporate accountability to shareholder interests, including climate goals.
Other investors have also called for director “no” votes at Exxon. The New York State Common Retirement Fund, announced it will vote against all but two of Exxon Mobil Corp.'s directors. Wespath Benefits and Investments and Mercy Investment Services co-filed a proxy exempt solicitation with the SEC, urging investors to vote against two Exxon director nominees. Illinois State Treasurer Michael Frerichs wrote in the Houston Chronicle that shareholders must hold Exxon accountable and filed an exempt solicitation with the SEC. And proxy advisor Glass Lewis recommended that investors vote against Joseph Hooley, the lead independent director for Exxon.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.