After CSR, now climate change effects to be reported

Friday, 21 March, 2014

Exxon Mobil have made an unprecedented step in the oil industry by agreeing to report on how climate change is affecting their business model.

The move, announced yesterday, demonstrates the increased empowerment of civil society activism, but also social investors. The instigators of the decision were social investment firm Arjuna Capital, the sustainable investment management arm of New York based investors Baldwin Brothers.

As shareholders of the oil giant, Arjuna Capital submitted a proposal to ExxonMobil that they disclose the effects climate change is having on their assets. According to Arjuna Capital, 20% of shareholders in ExxonMobil, representing $1 billion in assets, voted in favour of disclosure, “demonstrating the depth of concern from large institutional investors.”

“The proposal reflects increasing investor concern about the issue of stranded assets and builds on a shareholder initiative coordinated by Ceres, in which shareholders $3 trillion in assets under management, asked 45 companies for increased disclosure about whether they are addressing carbon related risk.”

A video on Arjuna Capital’s website outlines their position and affirms the growing potency of investors in the shift towards sustainability: “Investors are the canary in the coal mine, and will move their money to avoid material risk.”

Exxon Mobil's decision mirrors increasing reporting obligations from the extractive industries to document the social effects of their operations, with the EU, US and Canada passing laws that require greater CSR reporting from large companies.