A campaign against the stance of the world's largest oil company on global warming received a major boost Tuesday when a veteran leader of the corporate accountability movement introduced a shareholder resolution calling for the board of ExxonMobil to rein in its controversial top executive and chairman, Lee Raymond.
Robert A.G. Monks--founder of the leading United States corporate-governance consulting firm, Institutional Shareholder Services, Inc. (ISS)--announced the move, charging that Raymond's "increasingly extreme position" on global warming and other environmental and social issues was harming the company's reputation and share values.
"When various key financial newspapers, industry publications and PR journals note that Lee Raymond's antagonistic positions are making the company a target and jeopardizing its reputation, investors should worry that something is wrong," said Monks, who chairs two major investment management companies of his own.
"I believe responsible investors are looking increasingly at action to get a positive resolution to these types of issues," said Monks, whose companies own 125,000 shares of ExxonMobil stock.
Monks' move--which calls for ExxonMobil's Board to separate the roles of board chairman and chief executive officer--was hailed as a major advance by a coalition of mainly church groups which has scorned the company's position on scientific evidence of emissions from oil, gas or coal burning altering the Earth's climate.
"ExxonMobil is failing to grasp that its continued foot-dragging on global warming is going to destroy shareholder value in the long run," said Peter Altman, national coordinator for the coalition, Campaign ExxonMobil. "The smart course is to admit it is happening and get on with realistic solutions that will prevent the worst from happening."
Of all the major Western oil companies, ExxonMobil has been the most resistant to conceding the scientific evidence linking fossil fuel outputs to the warming of the Earth's atmosphere and the strongest foe of international agreements to tackle the issue, such as the recently concluded Kyoto Protocol on curbing "greenhouse gas" emissions.
"Current scientific, economic and technical understanding of climate change remains limited," said the company's director and executive vice-president Rene Dahan at a London conference in October.
"While the American public, like my company, is concerned about climate change, they've not been convinced that Kyoto is the answer. Many feel quite strongly that Kyoto is the wrong answer," Dahan said.
After U.S. President George W. Bush announced earlier this year that the United States was withdrawing from the Protocol, ExxonMobil took out congratulatory advertisements in major U.S. newspapers.
These positions on global warming, as well as on other environmental and social issues, have attracted critical media attention in recent years, as well as an international consumer boycott, which is particularly strong in Europe.
A series of articles in the Wall Street Journal and various public-relations publications have stressed the company's isolation on the global warming issue, its backing for lobby groups which strongly oppose the Kyoto Protocol, and the persistence of negative attitudes against it, as measured by public-opinion surveys.
"[Lee Raymond's] unflinching attitude to global warming, to ExxonMobil's businesses in repressive regimes, and his disdain for gay rights sparked a boycott of Exxon's products in Britain, and even calls for a boycott in the U.S.," 'PR Week' noted late last month.
Campaign ExxonMobil--which said it will back Monks' resolution at the next shareholders meeting in May--this year persuaded shareholders representing about US$24 billion in company stock, or nearly ten percent of the company's total shares, to back a resolution calling for increased investment in new and renewable energy sources.
"A number of mainstream investors have supported us in the past, and we expect to get more now," said Altman. "[Monks'] resolution is coming from someone who is not associated with environmental campaigns, but strictly with shareholder value and corporate accountability.
ISS, which Monks headed from 1985 to 1990, currently advises shareholders with more than US$1 trillion in assets on how to vote their proxies.