The United States Securities and Exchange Commission orders Exxon Mobil to uphold shareholder vote, Reuters reported.
The resolution, if approved, is a big blow to the oil giant as it needs to provide shareholders an outline of profitability in case legislation starts to find ways of combatting climate change.
The coalition of investors headed by Thomas P. DiNapoli, a New York State comptroller, introduced the proposal after the Paris consensus on climate change and saw the resolution as a win for the shareholders. The group, which corresponds to more than $1 billion Exxon shares, is deeply concerned on the effect of climate change on their portfolios.
"Investors need to know if Exxon Mobil is taking necessary steps to prepare for a lower-carbon future," said DiNapoli.
The order does not sit well with the largest publicly traded oil producer as it has previously rejected a proposition of having an independent director with expertise in climate change to sit in the board. The firm said the SEC proposal is unclear and they have already provided carbon disclosures [pdf].
The arguments raised by Exxon were dismissed by the SEC.
"Based on the information you have presented, it does not appear that exxon Mobil's public disclosures compare favourably with the guidelines of the proposal," wrote Justin A. Kisner, SEC attorney-adviser.
Exxon refused to comment on the issue but Alan T. Jeffers, the company's spokesperson said the company would "provide the board's position on the shareholder resolution in our proxy document."
The heightened awareness on climate change puts pressure on Exxon. The SEC resolution is just one of the trials that Exxon is facing right now. The company has another carbon-associated investigation carried out by New York Attorney General Eric Schneiderman who inquires whether the firm knowingly misled its shareholders and the public about the potential risks of climate change.
Years before climate change was a hot topic, Exxon's own research in the 1970s found a link between global warming and burning of fossil fuels.
Climate change and global warming are characterized by the rise in the surface temperatures of Earth. It is brought about by an overwhelming of fossil fuels that discharge carbon dioxide and other greenhouse gases into the atmosphere. NASA reported that atmospheric carbon diuseoxide grew by 3.05 parts per million in 2015 – the largest growth in 56 years of research.
Photo: Mike Mozart | Flickr