Another skirmish ends in activist defeat, as reported in Pension and Investments Exxon, Chevron given OK to dismiss shareholder climate proposal. Excerpts in italics with my bolds.

The Securities and Exchange Commission granted requests by Chevron Corp. and Exxon Mobil Corp. to again reject a shareholder proposal calling for reports on how the companies are addressing climate change goals. Similar proposals filed last year were also allowed to be excluded for Exxon after its challenge.

A document on the agency website noted briefly that SEC staff agreed March 20 with requests by company officials to exclude proposals from a group of shareholders, including the Church of England and As You Sow, asking if the companies will join other oil and gas companies in taking steps to align with the Paris Agreement goal of net-zero emissions by 2050, and calling for reduction targets, long-term business plans and other details.

“That suggests to me that the SEC doesn’t fully understand the issues on climate reporting we have requested,” As You Sow President Danielle Fugere said in an interview. The shareholder group called current reporting by Exxon and Chevron “confusing at best,” and Ms. Fugere said that the companies “are misleading investors by suggesting that they align” with the Paris goals.

Sanford Lewis, an attorney for the shareholders’ group, said that SEC staff have made it more difficult for shareholders to file climate change-related proposals at major oil companies by interpreting them as micromanaging, which allows the companies to be less specific in their reporting.

The SEC action letter is Response of the Office of Chief Counsel Division of Corporation Finance Re: Exxon Mobil Corporation Incoming letter dated January 14, 2020. Excerpts with my bolds.

The Proposal requests that the board conduct an evaluation and issue a report describing if, and how, the Company’s lobbying activities align with the goal of limiting average global warming to well below 2 degrees Celsius (the Paris Climate Agreement’s goal). The Proposal also indicated that the report should address the risks presented by any misaligned lobbying, and the Company’s plans, if any, to mitigate these risks.

There appears to be some basis for your view that the Company may exclude the Proposal under rule 14a-8(i)(11). We note that the Proposal is substantially duplicative of a proposal previously submitted by Boston Trust Walden that will be included in the Company’s 2020 proxy materials because the two proposals share a concern for seeking additional transparency from the Company about its lobbying activities and how these activities align with the Company’s expressed policy positions, of which one is the Company’s stated support of the Paris Climate Agreement. Accordingly, we will not recommend enforcement action to the Commission if the Company omits the Proposal from its proxy materials in reliance on rule 14a-8(i)(11).

Anti-fossil fuel activists want to force Exxon and Chevron to accept and conform to IPCC beliefs, as shown below by the text of the draft shareholder proposal. (included in the SEC action letter pdf above)

The Proposal

Climate Lobbying Report Shareholders request that the Board of Directors conduct an evaluation and issue a report within the next year (at reasonable cost, omitting proprietary information) describing if, and how, ExxonMobil’s lobbying activities (direct and through trade associations) align with the goal of limiting average global warming to well below 2 degrees Celsius (the Paris Climate Agreement’s goal). The report should also address the risks presented by any misaligned lobbying and the company1s plans, if any, to mitigate these risks.

Supporting Statement

According to the most recent annual “Emissions Gap Report” issued by the United Nations Environment Programme (November 26, 2019), critical gaps remain between the commitments national governments have made and the actions required to prevent the worst effects of climate change. Companies have an important and constructive role to play in enabling policy-makers to close these gaps.

[Note how many baseless statements are in this paragraph. UNEP has no legal authority for its claims. Its carbon budgeting rationale is spurious. National commitments are voluntary and would not bend the curve in the unlikely event they were achieved. Companies are not bound by UN bureaucrats. Even so, energy companies have led to US to outperform other nations in reducing emissions.]

Corporate lobbying activities that are inconsistent with meeting the goals of the Paris Agreement present regulatory, reputational and legal risks to investors. These efforts also present systemic risks to our economies, as delays in implementation of the Paris Agreement increase the physical risks of climate change, pose a systemic risk to economic stability and introduce uncertainty and volatility into our portfolios. We believe that Paris-aligned climate lobbying helps to mitigate these risks, and contributes positively to the long-term value of our investment portfolios.

[Here we have the attack on free speech and the right to voice a different opinion. Paris Accord documents are sacrosanct, and no dissent is allowed. Activists object to any effort to ensure the supply of carbon-based energy to consumers who want and are willing to pay for it.]

Of particular concern are the trade associations and other politically active organizations that speak for business but, unfortunately, too often present forceful obstacles to progress in addressing the climate crisis.

[The tactic is guilt by association and social excommunication of contrary viewpoints. Having failed to convince the public to stop using fossil fuels, they seek to discredit and deny the many social benefits derived from these energy products.]

As investors, we view fulfillment of the Paris Agreement’s agreed goal-to hold the increase in the global average temperature to “well below” 2•c above preindustrial levels, and to pursue efforts to limit the temperature increase to l.S°C- as an imperative. We are convinced that unabated climate change will have a devastating impact on our clients, plan beneficiaries, and the value of their portfolios. We see future “business as usual” scenarios of 3-4°C or greater as both unacceptable and uninvestable.

[Thus they proclaim their virtuous understanding, without themselves withdrawing from travel and other activities and practices dependent on fossil fuel products.]

Two hundred institutional investors managing $6.5 trillion recently wrote to ExxonMobil, seeking information on how the company is managing this critical governance issue. Insufficient information is presently available to help investors understand how ExxonMobil works to ensure that its lobbying activities, directly, in the company’s name, and indirectly, through trade associations, align with the Paris Agreement’s goals, and what ExxonMobil does to address any misalignments it has found. The investors received no response to their letter.

[Now the appeal to “consensus” shared by woke investment managers that they can put their beliefs above the interests of investors needing to raise income for their future needs.]

We commend the company for recent positive steps, such as public support for strong methane regulations and the decision to withdraw from membership in the American Legislative Exchange Council (ALEC) because of ALEC’s positions on climate change. However, information we do have on ExxonMobil’s ongoing lobbying efforts through trade associations still presents serious concerns.

[Someone’s deep pockets are behind all this legal activity and surveillance intending to constrict and financially damage energy companies.]

Thus, we urge the Board and management to assess the company’s climate related lobbying and report to shareholders.

[As members of modern society our health and prosperity depend heavily upon carbon-based energy that has raised so many out of poverty and deprivation. We urge the company to maintain and extend the supply of reliable and affordable energy, and to engage with private and public partners to that end.]