I flew out of the Newark Airport on Tuesday afternoon, May 24, headed to Dallas, TX to present a resolution at the ExxonMobil* annual shareholders’ meeting on behalf of Green Century Capital Management. The resolution was related to oil drilling operations in the tar sands of Alberta, Canada. Texas has been suffering from its worst drought ever, along with the worst season of associated wild fires on record, but on that Tuesday evening as our plane flew into the state, the problem wasn’t too little rain, but too much.Violent storms and at least one tornado were inundating the Dallas-Fort Worth Airport, and as we approached the area the captain came on the plane’s intercom to tell us we would be circling for a time in hopes the storms would abate. Some time later he came on again to tell us we would be landing in Houston to enable the plane to refuel.
We sat on the Houston runway in the plane for three hours. I emailed my contacts at Green Century to tell them I might not make the meeting after all. Around midnight, though, the storms having finally moved on, we took off again for Dallas and landed a little after 1:00 am. I made my way to the National rental car desk to pick up the car I had reserved and was told there were no cars available. The young woman behind the counter told me the company had lost 1,500 vehicles to damage caused by large hail from the storms. Every car was inoperable! I thought, “This is only one car company! How many more cars were lost in that one storm?”
National was able to call an all night taxi to drive me to my hotel in Dallas, and I got to bed about 2:30 am. While I was still waiting for the taxi at the airport I was thinking, "My God, climate change (severe drought & violent storms) is happening right here, right now, all around me, in this town that is the headquarters of the largest oil company in the world. And I am here to present an environmental resolution at this company’s annual shareholders’ meeting. Could I be in a better place at a better time? Maybe I am here just in time."
The Green Century resolution I presented the following morning in front of at least 500 people in a large and modern downtown theatre urges ExxonMobil to provide detailed public reporting about the economic, financial, and regulatory risks related to its oil drilling in the Alberta tar sands. The company boasts that 21% of its proved oil reserves comes from such tar sands, Alberta being the largest area. Yet this type of oil drilling and refining is arguably the most environmentally damaging project on the entire planet, and beyond this it is estimated that, because of its immense economic cost, ExxonMobil needs to receive $100 or more per barrel of this oil just to break even on the project.
In typical knee-jerk fashion, after the resolution was presented ExxonMobil CEO Rex Tillerson advised that the Board of Directors recommended against voting for the resolution. He did the same for all of the shareholder resolutions presented at the meeting, of which six were directly related to environmental concerns.
There is some good news. The shareholder resolutions presented at the meeting, and the subsequent discussion between the shareholders and Tillerson, came at the end of the meeting and lasted about one hour, just about half of the entire meeting time. The discussion itself was civil and articulate on both sides. Old timers at this annual meeting told me this was a very hopeful and quite different reception and conversation than at earlier meetings. Tillerson, in particular, displayed an educated, if guarded, knowledge of the intricacies of the environmental issues being discussed.
Nevertheless, at one point in the discussion after Tracey Rembert of CERES had challenged Tillerson to take a leadership role in the resolution of these issues, the CEO replied curtly she must not be paying attention, that he was indeed doing just that. I stood up and upon being recognized replied that although I was a first-time participant in this meeting, I was aware this same meeting process had been going on for years in basically the same adversarial way. I said I knew he and his colleagues were actively addressing the environmental issues being discussed because they were competent managers and the long-term sustainability of the company itself depended on it. I told him the shareholder groups presenting these resolutions had been studying and following these issues, and the company’s response to them, for more than a decade and were in fact paying very close attention.
I reiterated Tracey’s call that Tillerson take the lead in joining with our groups to tackle these difficult environmental challenges, that at this stage in the discussion we no longer needed or ought to be adversaries. I told the CEO I thought he was up to that leadership and management challenge. Tillerson looked at me – but didn’t say a word.
The resolution received 27% of the vote, a very good result at such a notorious company. In fact, of the six environmental resolutions presented at the meeting, three received well over 20% of the vote, and all received enough to be back on the ballot at next year’s annual meeting. Mr. Tillerson, know that we will continue to pay attention!
Walking out onto the sidewalk after the meeting, I couldn’t help but notice. It was a bright sunny day.
*Mention of specific companies should not be considered an offer to buy or sell the securities of those companies. For information on the suitability of any investment for your portfolio please contact your investment adviser.