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SEC Orders Exxon Mobil to Include Climate Change Vote

Mar 24, 2016 04:20 AM EDT
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Exxon Mobil Corp. has recently been ordered by the U.S. Securities and Exchange Commission (SEC) to include a resolution on climate change on its annual shareholder proxy meeting, as per a recent Reuters report.

The order obligates the U.S.-based multinational oil and gas company to disclose its total carbon emissions.

This is considered a legal setback for the largest internationally traded oil company because it has previously argued that it already had sufficient disclosures of its carbon emissions.

SEC sent a letter to Exxon on Tuesday, stating that the company is prohibited to ignore a proposal initiated by the state comptroller of New York from being subjected to a full shareholder vote.

If the shareholders approve the proposal, it would require the company to disclose the specific environmental risks it is taking to operate profitably.

The company has previously argued that the NY state's comptroller proposal was unclear. The company also further argued that it has already published sufficient carbon disclosures, which include the "Energy and Carbon - Managing the Risks" report that the company published on its website.

However, the SEC was unconvinced that the reports were adequately compliant to the requirements of the law. A lawyer-adviser with the SEC, Justin Kisner said that the disclosures of Exxon do not seem to be favorable with the guidelines of the comptroller's proposal.

A digital copy of Kisner's letter can be viewed online on the Scribd. It details the disagreement of SEC regarding Exxon Mobil's arguments.

So far, no comment from Exxon about the SEC order was released to the media. Exxon has been resisting to include climate change experts on its board.

In a blog article on FuelFix, it was pointed out that the SEC ruling was based on a 2015 international agreement ratified in Paris by almost 200 countries, including the United States. The agreement aims to reduce the total greenhouse emissions to reduce the possibly devastating impact of a global average temperature rise of 2 degrees Celsius.

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