ExxonMobil shareholders vote 'yes' on climate-change analysis, including Vanguard
Vanguard owns 299 million shares, or 7 percent, of the company's shares. But Sister Nora Nash, whose Sisters of St. Francis of Philadelphia own about 5,900, put the resolution before the shareholders.
When ExxonMobil Corp. shareholders voted for a historic climate-change resolution Wednesday, mutual-fund giant Vanguard and small investors such as Sister Nora Nash were among them.
ExxonMobil's board recommended voting against the resolution, proposed by Sister Nora and like-minded faith-based investors. Yet it passed, with 62 percent of shareholders voting "yes" on the call for a "2-degree scenario" analysis, which, as 195 countries have agreed to under the 2016 Paris Agreement, seeks to prevent the Earth from heating up by more than 2 degrees Celsius since the start of the industrial age. (So far, it's up about 1.1 degrees Celsius.)
Asset managers Vanguard, BlackRock, and State Street represent ExxonMobil's three largest shareholders, with roughly 7, 6, and 5 percent of shares outstanding, respectively.
Almost every investor has heard of Vanguard, the Malvern-based, $4 trillion indexing powerhouse founded by John Bogle, an advocate for low-fee investing. According to Bloomberg data, Vanguard owns 299 million shares of ExxonMobil.
Fewer have likely heard of Sister Nora. She's no ordinary nun — she is director of corporate responsibility for the Sisters of St. Francis of Philadelphia.
The religious order, based in Aston, Delaware County, owns about 5,900 ExxonMobil shares in its retirement fund. The sisters also own Chevron, Anadarko, Chesapeake Energy, Southern Co., and Marathon Oil shares.
"We know the oil and gas industry isn't going away, but we're putting a lot of pressure on them," Sister Nora said in an interview. "They have been extremely slow to recognize the 2-degree scenario coming from the Paris climate accord. If we don't stay below 2 degrees, our world will be more troubled because of greenhouse-gas emissions."
Vanguard reportedly had been considering voting for the climate-change resolution, but on Wednesday declined to comment on how it voted. At past shareholders meetings, Vanguard generally votes with ExxonMobil management, but has sometimes voted against.
Faith-based shareholders said Blackrock and Vanguard likely voted for the proposal.
"The vote was 38.1 percent last year for the same proposal, and 62.3 percent this year," said Christina Cobourn Herman of the Interfaith Center on Corporate Responsibility (ICCR), an activist group of asset managers and religious leaders who advocate responsible investing and corporate governance.
Together, Vanguard, Blackrock and State Street own 18 percent of ExxonMobil. "I don't know how we could have gotten that vote level without all three of these large funds, unless there are other very large shareholders out there that we aren't aware of," she said.
It was Sister Nora and those faith-based investors who put forth the climate-change resolution. Her religious order is a member of the ICCR.
Wednesday's shareholders meeting in Dallas was the first for ExxonMobil's new CEO, Darren Woods, as head of the company. Woods took over at the start of the year after longtime chief executive Rex Tillerson retired to serve as President Trump's secretary of state.
In remarks to the shareholders, Woods said, "We must also be mindful of the environment. We expect global CO2 emissions to peak and gradually decline by 2035."
Prior to the meeting, Woods wrote a letter to the president, urging him to keep the United States in the Paris climate agreement. Reports out of Washington on Wednesday suggested that Trump is leaning toward pulling the United States out of the accord.
"I want to thank you for writing that letter, and it's for this reason I'm very grateful," Sister Pat Daly, of the Dominican Sisters of Caldwell, N.J., told Woods. She is executive director of the Tri-State Coalition for Responsible Investments, which comprises 40 Catholic institutions, mostly congregations of sisters and priests, who assist investors in engaging with companies, educating their members, and connecting investment activity with Catholic social teaching.
In response, Woods said: "The Paris framework involves countries all around the world, and it's very important."
This isn't the first time Sister Nora has tangled with a Standard & Poor's 500 corporate giant. She and the Sisters of St. Francis are invested in Wells Fargo, and as part of Interfaith Center on Corporate Responsibility, they condemned the bank and demanded a deeper investigation into the bank's cross-selling activities in October. As the Wells Fargo scandal involving the opening of two million accounts by retail banking employees without customers' knowledge unfolded, the ICCR passed resolutions expressing disappointment in the bank.
"At our meeting with Wells representatives last December, we pressed for disclosure and we were denied the truth," Sister Nora said in a news release from ICCR last year. "We are confronted with painful accounts of fraud including some 80,000 customers in Pennsylvania alone. As shareholders and customers ourselves, we feel betrayed and have no choice but to call for a full review of business standards through this resolution, which we hope other shareholders will support."
Though environmentalists declared the ExxonMobil vote a victory, "it is nonbinding," noted Dan Wiener, a longtime Vanguard investor and Brooklyn-based publisher of the Independent Adviser for Vanguard Investors newsletter. "This is a safe vote for all the institutional investors like BlackRock and Vanguard, since it doesn't do very much."