Institution Theme Category Industry
  • BlackRock
  • Environmental
  • Climate
  • Oil & Gas
Company Year Market Link
Exxon Mobil Corporation 2020 N/A

As we have discussed during our most recent conversations with Exxon Mobil Corporation (Exxon), we continue to see a gap in the company’s disclosure and action with regard to several components of its climate risk management….When effective corporate governance is lacking, we believe that voting against the re-election of the responsible directors is often the most impactful action a shareholder can take.
Over the last several years, we have intensified our focus with the company on the financial risks of a transition to a lower carbon economy, and on BlackRock’s desire, as a long-term investor, for more fulsome information on the company’s approach to overseeing and managing these risks…
We have centered our engagements with Exxon around our broader request to companies and, as a carbon intensive company, to Exxon specifically, to align reporting with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB). In response to an investor vote, Exxon released its Energy and Carbon Summary in 2018 which follows the four pillars of the TCFD framework. However, despite yearly incremental adjustments, we do not believe that full adherence with the fourth pillar of the TCFD has been achieved. We continue to have several areas of significant concern:
I. GHG reduction targets
…. Despite discussions since last May regarding BIS’ expectation that Exxon expand the scope and accelerate the timeframe of its GHG reduction targets, the company does not have new targets in place and Exxon’s methane reduction goals are set to expire at the end of 2020. In our most recent engagement, the company informed us that it is in the process of developing future targets. We look forward to reviewing the new targets when published, and to understanding the company’s plan for achievement and process for future reassessment, if any.
However, we believe that a company of Exxon’s size and scope should have conveyed a plan to shareholders sufficiently in advance of the expiry of the 2020 targets to allow them a line of sight into the company’s forward vision. In our assessment, the company is not conveying a sense of urgency proportionate to the risk identified. Additionally, while we acknowledge Exxon’s actions in setting the goal for a 10% GHG emissions intensity reduction at Imperial operated oil sands by 2023, these limited intensity targets cover less than 10% of Exxon’s sales and other operating revenue.2 We see Exxon’s global peers setting more meaningful targets across their businesses designed to align with achieving the goals of the Paris Agreement.
II. Disclosure around the company’s anticipated degree of warming under its stated strategy
Exxon has conducted scenario analysis and believes that it will remain competitive under any future climate scenario. The company is investing in carbon capture technology and biofuels, areas where it believes it can be competitive, but has chosen not to take specific action in diversifying its portfolio towards renewables. We believe this decision is squarely within the company’s discretion in determining its own strategy. That being said, we believe that Exxon and its peers should, under these circumstances, disclose the degree of warming they anticipate under their stated strategy and why that path is in the best interests of long-term shareholders.
III. Failure to disclose Scope 3 emissions
A related concern is Exxon’s position not to disclose Scope 3 emissions based on the company’s stated rationale that these emissions are attributable to the consumption of Exxon’s products, and can therefore be misleading…During our engagements, we asked Exxon to consider disclosing its Scope 3 emissions. However, the company has not indicated whether it intends to change its current decision to keep this information private. As an energy major, Exxon’s decision not to disclose this information puts it at odds with its global peers who not only disclose Scope 3 emissions but have made commitments to lower them.
IV. Evidence of independent board oversight and leadership
…In the case of Exxon, we have not seen independent leadership of the board in either our direct engagement with board members, or through outcomes that signal the company is approaching these risks with the sense of urgency embraced by the market, investors, and the company’s peers.
Furthermore, we posit that Exxon may benefit from the addition of an individual with more direct industry experience to the board. We arrived at this position given the slow and incremental progress the company has made on increased transparency of climate risk management, despite our extensive history of engagements and our votes against multiple directors over the last four years.
As a result, this year we have voted against those directors whom we hold most accountable for the disconnect we have observed. We also voted in favor of the shareholder proposal seeking an Independent Chair as this failure in governance shows that the board needs to try a different approach. While, in general, we are supportive of a structure with a Lead Independent Director, in the case of Exxon, it is our view that the structure is not currently working, and that the board must find a way to demonstrate greater independence of thought in exercising its advisory role.


  • Proponent
  • Management
  • Resolution
  • Election of Director Angela F. Braly
  • Vote
  • Rationale
  • N/A
  • Details
  • According to Exxon’s disclosures, the company’s Public Issues and Contributions Committee oversees operational risks such as those relating to employee and community safety, health, environmental performance, including actions taken to address climate-related risks, security matters, and reviews and provides advice on objectives, policies and programs related to political and other contributions. Ms. Braly is the Chair of Public Issues Committee, and as such, BIS holds her accountable for lack of progress in driving greater action on climate risk in line with TCFD guidance, SASB recommendations, and BIS’ feedback over several years.