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Climate votes at Exxon, Chevron signal growing demand to change business as usual

For years, shareholders have been putting forward resolutions to try to encourage oil giants such as ExxonMobil Corp. and Chevron to consider the impacts of global warming in their business plans. Each year, these resolutions have been swatted away from these profitable conglomerates like pesky flies.

That is, until Wednesday, when climate-related resolutions received by far their highest level of support on record in the history of Exxon and Chevron. 

At Exxon's meeting in Dallas, a resolution that would have required the company to prepare an annual report examining the implications to the company's business if world leaders follow through on their pledges to keep global warming to less than 2 degrees Celsius, or 3.6 degrees Fahrenheit, above preindustrial levels, garnered 38% of the vote. 

Meanwhile, in California, a nearly identically worded resolution got 41% of the vote from Chevron's shareholders. 

Prior to Wednesday, no climate-related resolution had ever eclipsed 31% of shareholder support at either company. 

World leaders reaffirmed the 2-degree target in the Paris Agreement negotiated in December, but Exxon is betting that countries won't enact policies consistent with the pact for at least the next few decades and will instead choose to prioritize economic development.

Wednesday was the first time that such a large group of Exxon's largest shareholders, including the Norwegian Sovereign Wealth Fund and the Church of England, said this is too risky of a business strategy.

“Chairman, the board is losing the confidence of shareholders in its management of the climate issue,” said Edward Mason, the head of responsible investment at the Church Commissioners for England, which helps manage the church's investment funds. 

A separate resolution, calling for Exxon to align its business to the 2-degree scenario, rather than its current plans of more or less continuing to burn as much of its oil and gas as it can for as long as it can, was voted down more resoundingly on a vote of 18.5% to 85.5%. 

Exxon forecasts that oil and gas will make up 60% of the world's energy supply in 2040 — about the same share it holds today. Its forecasts paint a rosier picture for the future of oil than many of Exxon's peers do, including the French oil company Total, which on Tuesday decided to align its business strategy with the 2-degree target.

Exxon CEO Rex Tillerson, pictured above, said until there are "technological breakthroughs," the world will still rely mainly on coal, oil and natural gas for energy. 

"We've got to have some technological breakthroughs," he said, "but until we achieve those, to just say turn the taps off is not acceptable to humanity," he said.

Exxon is important in this context for three main reasons. First, there is the company's sheer size: It is the biggest American oil company. Second, it has long resisted the need for policies to address human-caused global warming, and instead has funded an elaborate public relations campaign to convince the American public that climate science is unsettled. 

The company is currently the subject of multi-pronged investigations by state attorneys general and the U.S. Virgin Islands for embarking on this public pressure campaign after discovering from its own scientists what the dangers of burning fossil fuels such as oil and natural gas actually were. 

These inquiries are collectively known as the "ExxonKnew" investigations based on the Twitter hashtag. Protesters placed an ice sculpture with that hashtag outside of the Dallas building where the meeting was held on Wednesday. 

Ivan Frishberg, first vice president of sustainability banking at Amalgamated Bank, told Mashable that Exxon has entered new, riskier territory.

"I think the combination of the Paris climate agreement, the pressure building up around the company from the kind of activist community and the ExxonKnew investigations, this has sort of reached a different level of seriousness for the company."

Andrew Logan, who directs oil and gas programs at the nonprofit sustainability advocacy organization Ceres, said the 2-degree stress test resolution, which earned the highest support, constituted a "real rebuke to company management" that had fought the resolution.

"Investors have sent a clear message that meaningful 2-degree stress testing is the new normal, and companies like Exxon and Chevron can no longer act as if nothing has changed," Logan said in a statement.

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