Oil Giant says Renewables Not Wanted by Consumers

One of the largest pension funds in the United States has called on ExxonMobil to develop a policy that promotes renewable energy.

IRVING, Texas, US, 2001-05-30 [SolarAccess.com] One of the largest pension funds in the United States has called on ExxonMobil to develop a policy that promotes renewable energy. The California Public Employee Retirement System is supporting proposals from shareholders of the oil company to develop a policy to promote renewables. It will also support a proposal that the Texas firm consider environmental and social factors in setting executive compensation levels. The annual meeting of the oil company is May 30. At last year’s annual meeting, 6.2 percent of shareholders voted for the renewable energy resolution while 7.7 percent supported the executive compensation resolution. The investors who supported the motion last year held $19 billion of stock in the company. This year’s proposal to support renewable energy was submitted by the Province of St. Joseph of the Capuchin Order in Milwaukee, Wisconsin, and 34 co-proponents. It notes the increasing evidence that global warming is caused in part by fossil fuel burning and the President’s Executive Order of 1999 that encourages development of renewable energy sources. “Committed to combat pollution from fossil fuels, two of our main international competitors, Royal Dutch/Shell Group and BP, have increased significantly development of renewables,” it reads. Shell will spend $500 million over five years to develop renewables, while BP wants to become the leading producer of solar power in the world. “We believe ExxonMobil continues to resist efforts urging management to wean itself from pollution-causing fuels and begin similar demonstrable efforts to expand ‘beyond petroleum’,” continues the motion. When it filed legal arguments to disallow the resolution last year, management wrote that “Renewable energy sources currently compose only an extremely insignificant percentage of the company’s business.” “ExxonMobil has made some efforts to develop renewable sources of energy; however, by its concentration on cheap fossil fuels, it has been left out of the loop in the renewable energy business segment,” it reads. “Its ongoing denial of climatic effects from fossil fuel burning is increasingly isolating it from the innovative policies and strategies of our main international competitors, such as Shell and BP.” The resolution asks the Board to adopt a company policy to promote renewable energy that is consistent with the Cabinet-level council and to develop strategic plans to help bring renewable energy sources into ExxonMobil’s energy mix. “Support for this resolution will indicate shareholder desire to de-emphasize the production of fossil fuels and the development of more non-polluting, environmentally-friendly approaches to renewable energy sources,” it concludes. “Proponents request the company pursue renewable energy sources without offering convincing economic, scientific, technical or environmental data on which to evaluate such action,” the management proxy form replies. “The board believes that the proponents’ recommendation that the corporation should pursue a business activity in renewables is unwarranted by consumer demand, technical and environmental concerns, and by economic factors. Such business activity at this time is not in the best interests of shareholders.” ExxonMobil has spent $500 million in the past on research and commercial activities in solar energy but, “after evaluating all relevant considerations, the business decision was made many years ago not to continue to actively pursue these energy alternatives, but to concentrate on our core energy and petrochemical businesses.” “The timing and advisability of entering into any new business, such as renewables, require the judgment of experienced management and scientists,” it continues. Renewable energy does not offer a “substantive business opportunity” and they “are not currently competitive with abundant, affordable fossil fuels, nor are they expected to become competitive in the near term.” “Renewables occupy only specialized niche markets because they are more costly and less reliable than conventional energy,” it explains. “Customers continue to demand products from petroleum” and research in fossil fuels has resulted in fewer environmental impacts. “Renewable energy sources produce environmental impacts,” it concludes. “Proponents fail to acknowledge the environmental challenges inherent in renewable energy sources, particularly if they are deployed on a scale necessary to make an appreciable contribution to global energy demands.” Solar panels must be manufactured, installed and maintained, while wind turbines face increasing pressures because of their impacts on wildlife and noise. Bioenergy creates land-use issues and uses considerable energy in cultivation and harvesting of crops. “To characterize renewable energy sources as non-polluting is inaccurate and misleading,” says the oil company. “Such considerations play an important role in deciding whether renewable energy sources provide sufficient commercial opportunity or true benefit to the environment” and there is no proof that renewable energy has a positive impact on climate change and the reduction of projected greenhouse gas emissions in the future. CalPERS is the largest public pension fund in the United States, with assets of $170 billion. It supports the renewables resolution because “the proposal is not unduly prescriptive (and) mainly asks the company to advise the shareholders regularly “as to the ways our Company is moving from its self-stated ‘insignificant percentage of the company’s business’ in renewable energy resources to the promotion and marketing of renewables.” “We are pleased to have CalPERS’ support for these resolutions, which we feel will enhance shareholder value,” says Patricia Daly of the Dominican Sisters of New Jersey. “We hope that other institutional investors will also choose to support these resolutions.” “ExxonMobil has twiddled its thumbs while its competitors have seized the initiative in clean energy increasingly in demand around the world,” adds Peter Altman of Campaign ExxonMobil. “We hope that as investors increasingly support resolutions calling for clean energy that the company will heed the message.” Campaign ExxonMobil is a national coalition of religious and environmental groups committed to convincing the company to take responsibility for its role in global warming. The proposal on renewables will also be supported by New York City pension funds, including the New York City Employee Retirement System, the New York City Teachers Retirement System, the New York City Police Pension Fund and the New York City Fire Department Pension Fund. The funds manage $80 billion and collectively own 13 million shares in ExxonMobil, or $1.1 billion of stock. “Our funds are supporting these resolutions because the trustees believe they will improve shareholder value as well as protect the environment,” explains Alan Hevesi, comptroller of New York, who is custodian and trustee of the funds. “We know that companies with that improve their environmental performance can provide even stronger returns to investors and we hope that other institutional shareholders will join us in supporting these resolutions.” “We are pleased that the New York City pension funds recognize that it is in shareholder¹s interests that ExxonMobil move forward on clean energy,” says Altman. “ExxonMobil has become increasingly isolated with regard to the need for clean energy. Their competitors are gaining early ground and experience with renewables. It only makes sense for the company to develop some kind of strategy to compete in a world that demands clean energy.” “We hope ExxonMobil listens to the New York City pension funds and the growing list of shareholders who support protecting the Arctic Refuge,” adds Athan Manuel of PIRG. “Doing so would help repair a corporate image tarnished by the Exxon Valdez oil spill and the company¹s intransigence on global warming.” Two private firms, Walden Asset Management / BBT Domestic Social Index Fund and Trillium Asset Management, will also support the resolutions.
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