Legal and General Investment Management, the U.K.’s largest asset manager, will oppose the re-election of Exxon Mobil Corp.’s chairman over what it called a lack of ambition on tackling climate change.
LGIM said Wednesday that it plans to vote against Darren Woods, who has been chairman since 2017 and who is also the company’s chief executive officer, at the energy group’s annual general meeting on May 27.
“We remain concerned by the Exxon’s lack of strategic ambition around climate change,” Meryam Omi, head of sustainability and responsible investment strategy at LGIM, said in a statement. “To remain successful in a low-carbon world, companies must act today, aligning their capital decision with the goals of the Paris Agreement, and setting stretching targets.”
LGIM, which manages around 1 trillion pounds ($1.2 trillion), said Exxon has persistently refused to disclose its full carbon footprint or set targets for reducing emissions.
“We are seeing many of Exxon’s peers step up, and reaffirm their sustainability ambitions even amid the current testing circumstances,” Omi said. “The world, and Exxon’s investors, cannot afford the company to fall behind.”
Exxon spokesman Casey Norton referred to previously published shareholder reports stating the company’s support for the Paris Agreement and the need for billions of dollars of new oil and gas investments even if the accord’s goals are met. Exxon has pledged to cut methane emissions and flaring within its own operations and invest in early-stage green technology.
In choosing to vote against Woods, LGIM is making good on a 2016 pledge to oppose chairs for failing to confront the threat of climate change. Last June, some LGIM funds sold out of Exxon for that reason.
Omi said in an interview that LGIM’s decision to reveal its intentions ahead of an AGM was unusual for the firm. “I think you could count the times we have done this on the fingers of one hand,” she said.
LGIM’s move comes less than a month after the Church Commissioners for England investment fund and New York State Common Retirement Fund urged other Exxon shareholders to use their votes at the general meeting to send a message to the company’s directors over climate change.
“We believe that Exxon Mobil can do so much better, and that a change in strategy and governance can bring about a long overdue improvement in shareholder returns,” they wrote. “While professing support for the Paris Agreement, Exxon Mobil is acting in full defiance of it.”
The Paris Agreement is a United Nations framework, negotiated in 2015, for tackling rising global temperatures.
LGIM is known for being tough with company boards when it perceives environmental, social and governance failings. It has long been a campaigner for splitting combined CEO and chairmanships to improve board oversight. Earlier this year, LGIM said it would vote against such leadership structures globally.
At Exxon, LGIM will also support proposals for an independent chair and more transparency on the group’s political lobbying.
“We believe that the separation of combined CEO and board chair roles provides a better balance of authority and responsibility,” Omi said in a statement.
Exxon urged shareholders to vote against the proposal, saying in its proxy filing that it recently beefed up the responsibilities of its lead director to address some shareholder concerns.