A rift between Washington and many corporate boardrooms on the issue of climate change has just widened dramatically, giving CEOs the best indication yet they they’ll come under more pressure to act on the issue from investors rather than lawmakers.
Just as widespread media reports were suggesting that Donald Trump was likely to pull the U.S. out of the Paris Accord, 62% of Exxon Mobil shareholders passed a separate and historic resolution calling on the world’s biggest listed oil company to better explain how it was confronting global warming.
Exxon had officially advised shareholders, including heavy hitters such as BlackRock and Vanguard, to reject this proposed resolution. CEO Darren Woods indicated it would consider their advice in what was a non-binding vote. “We take the vote seriously and will respond to that feedback,” he said.
“No matter what Trump decides, it is clear that investors are acting upon the imperative to address climate risks”
Woods also continued to back the Paris Accord, joining a band of business leaders making an 11th-hour plea to the president to reconsider his position on the 2015 agreement designed to curb carbon emissions.
Media reports, citing administration officials, said the president was likely to withdraw America’s involvement, though they stressed he still hasn’t completely made up his mind. Trump said in a Twitter post yesterday that he would likely make a decision later today.
A television commercial urging Trump to keep America in the accord, which can be seen here, featured the names of CEOs including JPMorgan’s Jamie Dimon, GE’s Jeff Immelt, Morgan Stanley’s James Gorman, Citigroup’s Michael Corbat, Johnson & Johnson’s Alex Gorsky, Disney’s Bob Iger, Proctor & Gamble’s David Taylor, Tesla’s Elon Musk and Dow Chemical’s Andrew Liveris.
Musk even threatened to become the second leader, following Uber CEO Travis Kalanick, to quit the president’s economic advisory councils, should he pull America out of the Accord.
“Don’t know which way Paris will go, but I’ve done all I can to advise directly to POTUS through others in WH & via councils, that we remain,” Musk said in a Twitter post. When asked what he’d do if Trump withdraws America, Musk said he would “have no choice but to depart councils in that case.”
The wider business community remains divided on climate change, with many CEOs likely to be quietly content if America backs out.. According to a survey of 1,379 CEOs released in January by PwC, climate change was still cited as a problem of moderate importance, with 35% saying there were “somewhat concerned” about the issue and 15% “extremely concerned”.
Regardless of their views, the shifting attitude of big investors could force them to take the issue more seriously, at least for public companies.
“No matter what Trump decides, it is clear that investors are acting upon the imperative to address climate risks, that the business case for climate action is real, and that the transition to a low-carbon economy is inevitable,” said Sue Reid, vice president climate and energy at Ceres, a nonprofit group that works with big investors on sustainability issues.