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BlackRock, the world’s largest fund manager, will lodge multiple votes against ExxonMobil at its annual shareholder meeting on Wednesday as it flags concern over the oil company’s failure to make progress on its climate change targets.
BlackRock will vote against the re-election of two directors and in favour of a shareholder motion that proposes splitting the role of chief executive and chairman.
The US investment firm is ExxonMobil’s second largest shareholder, with a stake of almost 5% in the company.
It will not back the re-election of Angela Braly, the chair of Exxon’s public issues and contributions committee, nor that of Kenneth Frazier, the board’s lead independent director.
The shareholder motion it will back proposes creating separate chief executive and chairman roles once the incumbent, Darren Woods, steps down.
Two US shareholder advisory firms have recommended to investors that they back the proposal, arguing that having a CEO who also leads the board can create a potential conflict of interest and lack of independence among a company’s directors.
BlackRock declined to comment.
In April the Church of England’s investment arm, the Church Commissioners, and the New York State Common Retirement Fund wrote a joint letter to fellow ExxonMobil investors asking them to vote against the re-election of the company’s entire board.
“As the world, ExxonMobil’s peers and investors confront the climate emergency, ExxonMobil is carrying on as if nothing has changed,” the letter said. “It is crystal clear to us that ExxonMobil’s inadequate response to climate change constitutes a broad failure of corporate governance and a specific failure of independent directors to oversee management.”
BlackRock manages assets worth $6.9tn (£5.3tn), including large holdings in oil producers such as BP, Shell and ExxonMobil.
It announced at the start of the year that it would divest from holdings related to thermal coal and would focus on sustainability when making investment decisions. The firm has joined Climate Action 100+, an influential pressure group calling for the biggest polluters to reduce their emissions.
BlackRock’s chief executive, Larry Fink, wrote in his annual letter to chief executives in January that financial markets had been slower to reflect the threat to economic growth posed by the climate crisis, and added that the firm would vote against companies that were not making progress.
“Where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing these issues, we will hold board members accountable,” Fink wrote.
Environmental campaigners have previously accused BlackRock of hypocrisy for routinely voting against shareholder motions directing boards to take action on the climate crisis.
Fink wrote in his letter that the firm preferred to vote against individual directors at annual shareholder meetings, a strategy it is pursuing at ExxonMobil’s AGM. “Last year BlackRock voted against or withheld votes from 4,800 directors at 2,700 different companies,” Fink wrote.
A blogpost written by ExxonMobil’s vice-president of investor relations, Stephen Littleton, and published on the company’s website this month called the statements from the Church of England and the New York State Common Retirement Fund “misleading”.
The oil firm said it had been expanding its shareholder engagement, and it directed investors to a report on “how we are working to reduce emissions in our operations through efficiency gains and new technologies”.
ExxonMobil, like other oil firms, has had a tumultuous few months, seeing a slump in its share price and recording a $610m (£495m) loss in the first quarter of the year after demand for oil slid to the lowest level in 25 years.
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